What is government’s role in economic development?
By Katelin Cook
Special to the Herald Times
RBC | Economic development exists to create market productivity that enhances the economics and quality of life for a community, with the primary focus on retaining and creating jobs, growing incomes and increasing the tax base. Traditionally, economic development has three components.
1. Government activities to create a “business friendly” environment, create jobs, policy development, tax incentives and providing critical infrastructure necessary to do business.
2. Infrastructure development such as utilities, broadband connectivity, hospitals, transportation and roadways, schools, law enforcement initiatives and public facilities such as parks and community centers.
3. Job creation and retention through workforce development programs and business development programs. The need for economic development can be measured through average household incomes, unemployment rate, population data, sales tax revenue and other readily available metrics. What is the role of Rio Blanco County and the towns of Meeker and Rangely in this process? Their role is to facilitate the opportunity for economic expansion. This includes:
- Funding intensive research to develop a feasible plan of action. As mentioned in a previous article, Rio Blanco County and the Towns of Meeker and Rangely have leveraged dollars by obtaining grant funds from the Colorado Department of Local Affairs (DOLA). This paid for research that is specific to Rio Blanco County, the culture, geography, and assets. This research also details unemployment issues, existing industries, housing markets, education levels and other relevant information needed to provide a strategic set of goals for community members to achieve, striving to increase wealth and jobs throughout Rio Blanco County. This was an appropriate role for our governments, and currently they are the only entities with the resources to implement this level of research.
- Rio Blanco County has funded a position, Economic Development Coordinator, to focus on developing and managing the process of Economic Development. Currently, that means managing and participating in over 40 different projects that will stimulate our economy in some shape or form.
- Policy makers play an important role during negotiations when an existing business wants to expand, or a new business wants to move into town. Local negotiating tools could include waiving permitting fees, impact fees, and expediting the permitting process. Local leadership wants to facilitate business growth, while at the same time ensuring the business operator is committed to Rio Blanco County and backing up their commitment with a substantial investment.
- Creation of an Urban Renewal Authority (URA), which is a quasi-government agency created on a local level for the specific purpose of restoration and redevelopment of a specified area within a community. Traditionally projects within a URA will provide public benefit, provide quality sustainable places, create jobs, promote public art, and offer affordable housing. Businesses (both existing and new) within these designated boundaries can benefit from programs such as Tax Increment Financing (TIF), or grant or loan programs. TIF is a community and economic development financing tool that allows communities to proactively invest in projects and infrastructure to improve quality of life. Redevelopment is expensive, and the private sector is naturally inclined to undertake projects in the least expensive area as possible, which leads to community sprawl and downtown decay. Incentives are often needed in order to change the economic parameters to attract investment into economically distressed areas, and specifically into downtowns. TIF is one such tool that allows a portion of the value created from a project to fund the investment. In other cases government may participate in public-private partnerships to encourage development. Local government agencies could own capital assets, such as buildings and create a lease to own situation with a business operator. A scenario such as this helps minimize upfront capital a business may need while providing a modest but attractive return of investment. Safeguards should be in place to assure government’s investment is returned over time. Rio Blanco County and the towns of Meeker and Rangely are looking into several of these investment concepts in order to stimulate economic investment in our communities.
This is the fifth article in a series of articles giving an overview of the economic development research, strategies and plans for Rio Blanco County, Meeker and Rangely. For the entire series please visit www.rbc.us/248/economicdevelopment. Any questions can be directed to Katelin Cook, economic development coordinator for Rio Blanco County, by phone at 970-878-9474.