Posted on 2015-03 in Economic Development
Local, state and federal governments have taken different approaches with regard to implementing programs to address the range of issues related to blighted neighborhoods in America’s metropolitan areas. Neighborhood blight, which can negatively affect the health and safety of citizens and lower revenue inflows as a result of declining property values, remain a significant challenge in several American cities. Due to the local nature of these conditions, local or community level organizations typically target blight removal, using federal and state funds channeled through state agencies. Along with assistance either offered or funneled through various government agencies, a number of nonprofit organizations also are actively involved in creating innovative solutions to eradicating blighted neighborhoods.
Initiatives to address this issue emerge from three main groups: federal, state and nonprofit.
Several federal agency programs offer grant funding for use by states to remove blight, including the U.S. Department of Housing and Urban Development (HUD) Neighborhood Stabilization Program, U.S. Environmental Protection Agency Brownfields and Land Revitalization Act, National Park Service Historic Preservation Fund Grants-in-Aid for State, Tribal, and Local Government Programs, U.S. Department of Commerce Economic Development Administration Planning and Local Technical Assistance Program, and the U.S. Department of Commerce Economic Development Administration Public Works and Economic Adjustment Assistance Program. The federal HUD agency also compiles data on vacancy rates and highlights strategies for identifying, targeting, and eliminating urban blight, as well as innovative ways to rejuvenate affected areas and the surrounding communities.
HUD also suggests community gardens, green space, special events, festivals and concert series as ways of creating community value with newly vacant open lots. The temporary nature makes the projects low-cost and low-risk approaches to returning land to productive use and engaging the community in the public space. These ideas all support engagement of the community through the process of identifying areas of need, implementing clean up and restoration, deciding future use, and ultimately giving back to the community in a way that promotes a communal sense of ownership.
Following the Great Recession, the most severe economic crisis to sweep over the nation since the Great Depression, triggered at least in part by a collapse in the housing sector, the federal government temporarily made additional grant funding available so that states could initiate a range of reforms to mitigate the adverse consequences this collapse. The collapse of the housing sector during the Great Recession did exacerbate the conditions in a number of the blighted neighborhoods in America’s metropolitan areas. As a result, both public and private sector entities, recognized the importance for urgent action to revitalize these affected areas and transform them into safer, thriving and revenue-generating communities.
The lead role taken by states in these initiatives is exemplified by the actions in Ohio and Michigan during and after the Great Recession. Ohio emphasized blight removal – focusing on deconstructing and demolishing blighted units – to make way for safer, more productive property development. In 2010, the Ohio Legislature passed a law to allow any county to form a nonprofit land bank. Two years later, Ohio issued $68 million dollars in grant funding available to all 88 counties in the state for the purpose of removing blighted buildings and properties. The state’s grant period opened April 2012 and the original deadline for the use of the grant was July 2014. During that period, the attorney general’s office reports grant recipients removed 12,000 blighted building units and extended the deadline through September 2014. The Greater Ohio Policy Center created best practices for strategic demolition for the Ohio Finance Agency as a part of the agency’s Neighborhood Initiative Program.
The emphasis on blight removal departs from traditional neighborhood blight removal efforts and is usually paired with neighborhood revitalization initiatives. In Michigan, the Michigan Economic Development Corporation (MEDC), a state-funded marketing , tourism, and economic development corporation, offers grants and loans for community development, as well as guidance and best practices. For instance, some of MEDC’s programs and initiatives include the Michigan Community Revitalization program, Commercial Rehabilitation Act, and the Obsolete Property Rehabilitation Act. The Michigan Community Revitalization Program, established through Public Act 252 of 2011, distributes loans and grants to individuals and small groups for physical site improvements. The Commercial Rehabilitation Act, Public Act 210 of 2005, abates property taxes for local governments to offer to developers rehabilitating a blighted commercial property. The Obsolete Property Rehabilitation Act similarly allows a local government to apply for tax incentives so an owner or developer may build productive commercial or mixed-use developments. Further examples of strategic community development in Michigan are available on the MEDC website.
These states exemplify two distinct approaches toward blight removal that might prove instructive in other states. Outside the allocation of grants and the establishment of blight removal task forces and neighborhood corporations, direct state actions include defining blight and use of appropriate eminent domain provisions. The role played by states in acting as an intermediary among the different groups in the entire process also remains critical.
Nonprofit Sector Efforts:
The American Planning Association (APA) notes that creative tools can inform and enhance community development more than traditional public surveys, meetings, public hearings and town halls, by engaging a broader audience and aiming for a deeper understanding of the community.
Tools such as social media can elicit participation from community residents who may not go to a public hearing. These tools can inform several stages of the blight removal and redevelopment process. Detroit launched an app so people could report blight and provide ideas for neighborhood revitalization. Apps such as Neighborland similarly provide a forum for residents to discuss and vote on what they want to see in their city, including areas that might be affected by blight. In Lansing, Michigan, a Michigan State professor had a similar, lower-tech idea, and the city’s Office of Planning and Neighborhood Development painted the side of a blighted commercial building with chalkboard paint, stenciling “I wish this were a...,” so people walking by could make suggestions.
Universities have a major stake in the vibrancy of the neighborhoods in which they are located; universities also possess high levels of human and social capital and an abundant supply of volunteers to engage in different innovative and creative ways to address blight. To this end, the Democracy Collaborative has developed recommendations to maximize community outcomes through university partnerships. In addition, HUD offers grants to historically black colleges and universities for addressing community development needs.
In other areas, Cities of Service, a nonprofit organization, emphasizes local community volunteers in its “Love Your Block” program. The group offers grants and a plan for mayors to tailor to their city’s needs. Volunteers help clean up litter, remove graffiti, and install new use, such as community gardens. Other nonprofit urban revitalization programs with a focus on civic engagement include the Knight Foundation’s Cities Challenge and Habitat for Humanity’s Neighborhood Revitalization. The Aspen Institute offers a guidebook on cultivating such resident engagement and volunteerism. The Urban Institute’s What Works Collaborative outlines policies and strategies for neighborhood revitalization.
Posted on 2015-03 in Economic Development
(Information Compiled on February 4, 2015)
The New Markets Tax Credit Program (NMTC Program) was established by Congress in 2000 to spur new or increased investments into operating businesses and real estate projects located in low-income communities. The NMTC Program attracts investment capital to low-income communities by permitting individual and corporate investors to receive a tax credit against their federal income tax return in exchange for making equity investments in specialized financial institutions called Community Development Entities (CDEs). The credit totals 39 percent of the original investment amount and is claimed over a period of seven years (5 percent for each of the first three years, and 6 percent for each of the remaining four years). The investment in CDEs cannot be redeemed before the end of the seven-year period.
In 1994, the Community Development Financial Institutions Fund, or CDFI Fund, was created under aegis of the U.S. Department of the Treasury to promote economic revitalization and community development through investment in and assistance to community development financial institutions (CDFIs). The CDFI Fund achieves its purpose by promoting access to capital and local economic growth through initiatives such as the NMTC Program. Since its inception, the CDFI Fund has made 836 awards allocating a total of $40 billion in tax credit authority to CDEs through a competitive application process. This $40 billion includes $3 billion in Recovery Act Awards and $1 billion of special allocation authority to be used for the recovery and redevelopment of the Gulf Opportunity Zone.
Importantly, when President Barack Obama enacted the Tax Increase Prevention Act of 2014 (the “Act’) in mid-December 2014, many programs that expired at the end of 2013, including the New Markets Tax Credit Program, were reauthorized. Specifically, the Act authorizes $3.5 billion in allocations for the New Markets Tax Credit Program and these allocations must be used by December 31, 2019. Many states have programs similar to the federal New Markets Tax Credit Program.
Along with the overview of the Program presented below, the following links remain of interest:
Posted on 2014-11 in Economic Development
The 2014 Site Selection magazine's top state business climate rankings were released recently and most impressively, 9 of the top 10 states belong to the Southern office of The Council of State Governments (CSG), the Southern Legislative Conference (SLC). Site Selection, a source of information for economic planning decision-makers both nationally and internationally, ranked Georgia the state with the top business climate in the country (a ranking the state secured in 2013 also) for a host of reasons, including the state's Quick Start workforce training program, logistics infrastructure and economic development leadership. Louisiana was another SLC state that performed admirably in 2014, vaulting from sixth place in 2013 to second this year in the magazine's overall rankings. In probing the most important factors that drive company location decisions, Site Selection highlighted several attributes that many SLC states have focused on expanding in recent years, including transportation infrastructure, ease of permitting and regulatory procedures and existing workforce skills.
For more details on the 2014 Site Selection rankings and review process, please visit http://www.siteselection.com/issues/2014/nov/cover.cfm.
At the 64th annual meeting of the SLC in Charleston, South Carolina, Mr. Adam Bruns, Managing Editor, Site Selection Magazine was a featured speaker at the SLC's Economic Development, Transportation and Cultural Affairs Committee. For a copy of his presentation, please visit Adam Bruns, Managing Editor - Site Selection Magazine, Georgia.
For information related to economic development trends in the SLC states, please contact Sujit M. CanagaRetna, Fiscal Policy Manager and Staff Liaison to the SLC's Economic Development, Transportation and Cultural Affairs Committee at firstname.lastname@example.org.
Posted on 2014-10 in Economic Development
Public and private sector officials alike realize that comprehensively training America’s workers for available positions in a number of emerging fields remains a critical ingredient in advancing our economy at the state, regional and national levels. In an effort to recruit and train workers to staff the sophisticated 21st century manufacturing jobs in many parts of the country, states are actively providing workforce training programs to their residents. The economic development agencies in a number of states belonging to the Southern Legislative Conference (SLC), the Southern office of The Council of State Governments, place a great deal of emphasis on these training support programs and work closely with their community college system and their corporate partners to ensure that students receive the most up-to-date and wide-ranging training to staff these demanding positions. The SLC has been closely tracking the issue of state efforts to advance workforce development for several years in multiple ways: publications, Webinars and presentations.1
In a significant boost to these state efforts, in late September 2014, the federal government announced the awarding of $450 million in job-driven training grants that would be disbursed to nearly 270 community colleges across the country, a process that will be co-administered by the U.S. Department of Labor and the U.S. Department of Education.2 The grants are designed to provide community colleges and other eligible institutions of higher education with funds to partner with employers to expand and improve their ability to deliver education and career training programs that will help job seekers get the skills they need for in-demand jobs in industries like information technology, healthcare, energy, and advanced manufacturing.
An important component of these federal grants is the ability of the community and technical colleges to partner with private sector entities in crafting training programs that directly relate to the needs of the private sector. As indicated in a number of previous SLC publications, the SLC states have been extremely proactive on this front and have collaborated effectively with different private companies to facilitate this process. For instance, North Carolina’s collaboration between the private sector and community college system in fostering worker training has a long history of national recognition. Specifically, Central Piedmont Community College (CPCC) and Siemens Energy, both located in Charlotte, have a highly effective partnership building and developing a talent pipeline to address Siemens’ workforce needs with suitably trained workers.3 In a development that affirms this partnership, a review of the September 2014 federal grant distributions indicates that CPCC was the recipient of a $2.5 million award. Table 1 provides details on the federal workforce development grants provided to the community colleges and technical colleges in the SLC states.
|AL||Birmingham||Lawson State Community College||$10,000,000.00|
|AR||West Memphis||Mid-South Community College||$9,814,818.00|
|FL||Miami||Miami Dade College Kendall Campus||$9,977,296.00|
|GA||Thomasville||Southwest Georgia Technical College||$2,322,718.00|
|KY||Hazard||Hazard Community and Technical College||$10,000,000.00|
|LA||Bossier City||Bossier Parish Community College||$2,499,325.00|
|LA||New Orleans||Delgado Community College||$2,498,457.00|
|MO||Kansas City||Metropolitan Community College||$19,724,404.00|
|MS||Decatur||East Central Community College||$2,499,950.00|
|NC||Charlotte||Central Piedmont Community College||$2,499,378.00|
|OK||Oklahoma City||Oklahoma City Community College||$2,497,340.00|
|SC||Graniteville||Aiken Technical College||$2,455,839.00|
|TN||Memphis||Southwest Tennessee Community College||$2,387,247.00|
|TX||Waco||Texas State Technical College - Waco||$2,378,924.00|
|VA||Danville||Danville Community College||$2,500,000.00|
|VA||Middletown||Lord Fairfax Community College||$3,250,000.00|
|VA||Cedar Bluff||Southwest Virginia Community College||$2,500,000.00|
|VA||Hampton||Thomas Nelson Community College||$2,476,840.00|
|VA||Petersburg||Virginia State University||$3,249,817.00|
|WV||Huntington||Mountwest Community & Technical College||$9,461,288.00|
Source: http://www.whitehouse.gov/the-press-office/2014/09/29/fact-sheet-vice-president-biden-announces-recipients-450-million-job-dri (accessed October 1, 2014)
There were 23 institutions located in the SLC states that received grants from the federal government to promote workforce development. Several of these institutions received some of the largest disbursements, including Mid-South Community College in West Memphis, Arkansas ($9.8 million); Miami-Dade College (Kendall Campus) in Miami, Florida ($10 million); Lawson State Community College in Birmingham, Alabama ($10 million); Hazard Community and Technical College in Hazard, Kentucky ($10 million); and Metropolitan Community College in Kansas City, Missouri, the second highest grant awarded ($19.7 million).
In highlighting the expertise of the different institutions, the federal grant distribution news release noted the following with regard to institutions in the SLC states:
Experts rank an adequate supply of skilled workers positioned to tackle the challenges of the complex 21st century manufacturing arena a critical ingredient in promoting a successful state economic development strategy, particularly in setting up manufacturing facilities. A number of studies in recent years have documented the serious skills shortage in the contemporary American manufacturing sector, a development that could impede the resurgent manufacturing sector in the United States. These reports maintain that, unless policymakers rapidly enact aggressive policies to train and retrain a new generation of manufacturing workers, America’s economic prowess in the 21st century will be seriously jeopardized. In response, a number of states across the country, particularly in the SLC region, have been extremely proactive in meeting the needs of the diverse manufacturing companies locating and expanding in their states by providing a range of workforce development opportunities after effectively partnering with community and technical colleges.
Manufacturing companies locating in the SLC states, particularly the automotive and aeronautics companies, often cite the ability of SLC states to provide an appropriately trained labor pool as an important consideration in their location decisions. Toward further reinforcing this goal, the decision of the federal government to award $450 million in grants to community and technical colleges across the country remains an important step in the direction of ensuring that the United States produces a cadre of competent, highly-trained manufacturing workers. The collaborative role, involving state policymakers and private companies in designing the training programs at the technical and community colleges, is another hallmark of a strategy that is increasingly gaining traction in the states.
1 For additional and details on SLC publications on the topic, please see http://www.slcatlanta.org/Publications/EconDev/workdev_web.pdf, http://www.slcatlanta.org/Publications/EconDev/TireManufacturingSouth.pdf and http://www.slcatlanta.org/Publications/EconDev/SouthernAerospace.pdf.
3 For additional details on this CPCC/Siemens partnership, see http://www.slcatlanta.org/Publications/EconDev/workdev_web.pdf, page 16.
4 Stackable certificates allow a student to quickly achieve an industry certification at a community college that leads directly to employment. Typically, these programs are geared toward adult learners, with schedules more open to individuals with jobs and families.
5 Founded in 1995 as a neighborhood-based effort to increase access to personal computers, Per Scholas was an early pioneer in bridging the digital divide for families and children in the South Bronx, in New York City. Per Scholas now operates the largest and oldest professional IT workforce development program in New York City, a series of free, multi-week professional IT job training courses and career development and placement services. The organization also has embarked on a national expansion with new locations in Columbus and Cincinnati, Ohio, and Washington, D.C.
6 Founded in 1983, Jobs for the Future began as a regional nonprofit working with a few states to assess their workforce needs, helping employers find skilled workers, and assisting workers move into higher-wage jobs. Today, Jobs for the Future works to expand the college, career, and life prospects of low-income youth and adults in 25 states.
Posted on 2011-10 in Economic Development
In June 2007, the SLC issued a report entitled Lights! Camera! Action! Southern State Efforts to Attract Filmmakers' Business. The major objective of the report was to hone in on a trend that was sweeping across the country: states, led by 2002 landmark legislation in Louisiana, working proactively to lure the motion picture and television industries to work within their borders. In addition, the report highlighted why the film industry landscape in the United States had become very competitive, vis-à-vis international locations in Canada and Eastern Europe, in the early to mid-years of the decade and provided details on some of the aggressive new and revised financial and other incentives offered by states to filmmakers.
Since the release of this SLC report, two important developments have surfaced that require attention:
A number of studies contend that state film incentives are not a sound investment of scarce state tax dollars and that states should strongly reevaluate continuing the practice. For instance, in a study released in March 2009, Professor Susan Christopherson, Cornell University, maintained that "most of the three dozen states chasing film production with tax breaks will not catch up with New York and California, where the movie and television industries have been dug in for decades. The subsidies they're giving the productions don't have a long-term economic impact for the state." Another study, prepared by Robert Tannenwald at the Center for Budget and Policy Priorities also maintained "[I]n the harsh light of reality, film subsidies offer little bang for the buck."
Similarly, other state studies maintain that states did accrue financial gains from these incentives and that policymakers should continue to extend offering these incentives after careful and ongoing reviews of the programs. Specifically, an April 2011 study from Louisiana, entitled Fiscal & Economic Impact Analysis of Louisiana's Entertainment Incentives documents the tremendous economic gains flowing to the state from these incentives. Similarly in North Carolina, in March 2011, a workshop entitled In Focus: Film Industry in the Carolinas, documented that "Southeastern North Carolina's film industry had generated eight television series and more than 2,300 features, mini-series and TV movies since the 1980s. The industry brings millions of dollars into the local economy and creates high-paying, skilled jobs." A study done on the economic and fiscal impacts of New Mexico's film production tax credit program in 2009 also substantiated that the state reaped significant economic benefits from the incentives.
An early 2009 study of New York's tax breaks for movie and television production suggested that a 30 percent credit offered by the state, along with an additional 5 percent offered by New York City, secured or created about 19,500 jobs while yielding $404 million in tax revenue, at a cost of $215 million in credits. (The study was conducted by the accounting firm Ernst & Young for both the Motion Picture Association of America and New York's state film office.) A similar study out of Rhode Island demonstrated that rather than returning a few cents on the dollar, the tax credits brought back an average of $8 for every dollar spent.
Given the controversy surrounding the efficacy of states continuing to provide incentives to the film industry ‐ at a time when state budgets are under so much strain ‐ there is growing awareness that incentive programs have to be reviewed on a state-by-state basis. While they might be very effective in one state, they might not be as effective in another. Experts on the incentive programs to states also insist that if states can foster the creation of a gamut of post-production activities, the benefits to the individual state economies would be more permanent in contrast to the more fleeting benefits flowing from the actual filming operations.
Video Game Industry
In recent years, a number of states, at least 20, have introduced legislation to promote the video game industry as a catalyst for economic growth. These measures, typically in the form of tax incentives, take the form of credits, grants and exemptions. The effort undertaken by a number of universities (University of Southern California, University of Central Florida, Louisiana State University and Georgia Tech) to both expand and introduce undergraduate and graduate level degrees in video game technology is another important allied development. Most often the incentives related to the video game industry are administered by a state's film office.
An important decision made by Louisiana State University (LSU) to promote the creative economy by melding both creative and technological forces led to LSU (and the Louisiana Department of Economic Development) inviting Electronic Arts Inc., more commonly known to gaming buffs throughout the world as EA Sports, to establish a new global quality assurance center ‐ the first of its kind in the United States ‐ located on LSU's South Campus.
Along with these state incentives, the video game industry also secures incentives from the federal government. These federal tax incentives – a collection of deductions, write-offs and credits mostly devised for other industries in other eras – now make video game production one of the most highly subsidized businesses, according to certain experts.
This recent research piece, the result of a legislative information request, provides the latest trends on state incentives to the film industry (including specific statutes) in over a dozen states and details incentives provided by states to the video game industry.
Further information is available for the following states:
The reports below may also be of interest
General Overview of Tax Incentives
Tax Incentives for Video Games
for Interactive Entertainment Production
Posted on 2010-08 in Economic Development
(Click header to sort each column)
|State||Total Awarded||Total Outlays||Percent of SLC Total Awards||Percent of SLC Total Outlays||Percentage of U.S. Total Awards||Percentage of U.S. Total Outlays|
U.S. Department of Energy, http://www.energy.gov/recovery/data.htm. Current as of July 16, 2010.
Posted on 2003-06 in Economic Development
In late May 2003, both chambers of the U.S. Congress and the president agreed on a $350 billion package designed to promote economic growth across the country. A major provision for the passage of this legislation in the U.S. Senate was a $20 billion state aid component that included $10 billion for Medicaid/FMAP and $10 billion in the form of flexible grants for states. The table below presents a breakdown of the amounts the 16 SLC states are slated to receive under the legislation.
Final Agreement on State Fiscal Assistance
Federal Fiscal Years 2003 and 2004; Dollars in Thousands
|SLC State||Flexible Grants |
(FFY 2003 and 2004)
Source: Federal Funds Information for States