Many economic developers live in a world where you’re only as good as your last deal, forcing them to walk a narrow path of staying out of the newspaper for the wrong reasons while continually having to answer the question “what have you done for me lately?” It can be a tough row to hoe for sure, but for several of our EDO clients we help put numbers to some of their efforts.
To do this, we offer an annual (or even every-so-often) economic development performance report. Recently, a Chamber of Commerce client had us prepare an analysis for its most recent fiscal year in order to demonstrate the value generated for the city. In this case, the city provides a significant portion of the Chamber’s funding, and it wanted to know the return on its investment.
The Chamber engages in many activities throughout the year; but, for this client, marketing the community and economic development retention and attraction are its main focus. The annual ED performance report quantified the total number of jobs, salaries, and economic output supported by new businesses locating in the community. The study also estimated the tax revenues that would be generated by these new businesses on an annual basis and made projections into the future. The report included all of the nerdy detail you’d expect from one of our reports, but here are some of the punchlines for the city:
For every $1 dollar in public investment, Chamber-supported projects generated
$1,500 in economic output,
$375 in workers’ earnings,
$18 in additional local taxable sales,
$0.36 in additional local sales tax revenue, and
$6.00 in additional property tax revenue.
A direct job was created with every $250 in funding. Considering both the direct and the indirect and induced employment, a job was created with every $150 in funding.
Finally, the projected additional annual city tax revenue exceeded the amount of city funding – therefore, the city’s return on investment was over 100%.
This post is part of a series on the many uses of an economic impact study. These stories represent just a few of our clients and illustrate how they have used our analyses to communicate the value of businesses and/or other organizations in their community. Here’s the full list:
- State-level Economic Development Incentive Program – California Competes Tax Credit
- Local ED Incentive Negotiations
- Economic Development Organization (EDO) Performance Report
- A Manufacturer Faced with Possible New Water Restrictions
- Public Four-Year College Impact Analysis
- Publicly Funded Business Incubator