K.I.S.S. – Keep It Simple, Stupid.
This a principle we’ve come to appreciate over the years. Reporting on the impact of an economic development project can get technical but in developing Impact DashBoard, our economic development impact model, we have included a comprehensive infographic to help communicate everything stakeholders need to know about a prospective ED project.
Get Your Bearings!
What may look like a lot of information is not as overwhelming once you take a breath and remember this report is hitting the three connect elements of an economic development project.
Jobs, salaries, capital investment, and residential development are the primary economic impacts summarized in this report. Job creation includes breakouts for direct jobs, indirect and induced jobs or “spin-off” jobs, and total jobs. Average salaries for direct, spin-off, and the aggregate total of all new jobs are also shown. The direct impacts are entered by the user based on information about the prospective project and the indirect and induced impacts are estimated using economic impact multipliers. Typically, our multipliers use RIMS II multipliers from the Bureau of Economic Analysis but the user has the ability to use other multiplier values if desired. Capital investment represents the total amount invested in buildings and furniture, fixtures, and equipment (“FF&E”) over the term of the analysis. Residential development highlights the number of worker households anticipated to relocate to the community (“Relocations”) and the number of new residential properties to be constructed (“Homes”).
The economic impacts that emanate from the new economic development project generate new tax revenues and will likely result in new costs. Impact DashBoard is configured to model your community’s tax structure and parse out which government receives various local or state tax revenue. Furthermore, Impact DataSource researches the cost of government services to be estimated based on an increase of business activity or residential population. Impact DashBoard estimates these fiscal costs and benefits over a multiple-year horizon to capture the dynamic effects of the project’s phase-in or changes expected over time. The summary report shows the revenues and costs for a single entity, in this example, the city.
If incentives are under consideration, a comprehensive analysis must incorporate how potential incentives affect the fiscal net benefit to be generated by a project. Impact DashBoard allows users to model sales tax and property tax abatements, rebates, or exemptions as well as other non-tax incentives such as paid-for infrastructure improvements, discounted land, or other cash or near-cash grants. Impact DashBoard estimates property tax incentives to determine how these incentives reduce the overall net benefit generated by the project. Impact DashBoard also calculates the ROI for economic development incentives. A non-tax incentive is compared to the stream of net benefits to be generated over time. In this way, the non-tax incentive is treated as an investment and the net benefits are the return on investment. Impact DashBoard calculates the rate of return and payback period on these incentives.
Check out the video below to see a walk-through of the Economic Development Impact Summary Report!