Our cities, counties and state use economic development incentives to encourage private investment, job creation, and economic growth in our region. These policies and programs often take the form of tax breaks, government subsidized infrastructure, grants, loans, and other financial incentives. The incentives are designed to help implement the vision for our region’s future, reduce cost burdens on homeownership, and draw private investment into areas where public infrastructure already exists. It is important that the return on investment of those incentives is balanced with the costs associated with offering them. Below are several significant benefits that taxpayers should expect to receive in return for their investment.
Local economic development incentives have been used to promote a vibrant housing market and have dramatically increased the taxable value of Fargo’s vibrant and expanding downtown. This overall increase in tax revenue not only offsets the costs of the programs, but the increase in tax revenue reduces the tax burden on other residents of the city. The growth promoted by the incentives also creates new jobs, attracts new businesses, and stimulates new and desirable economic activity that otherwise would not have been possible.
Economic development incentives create new opportunities for residents, such as increased housing choice by providing a variety of housing types and levels of affordability, new jobs, higher wages, and improved access to goods and services. They can improve the built environment and accomplish the goals of how and where to grow as established by city plans. These benefits lead to an increase in investment in neighborhoods and safer communities.
Economic development incentives can help stimulate economic growth in the region, creating a ripple effect throughout the local economy. When businesses invest in an area, they create jobs and income, which can increase consumer spending and generate more economic activity.
The Fargo-Moorhead metro area competes every day with other areas like Lincoln, NE, Des Moines, IA, and Milwaukee, WI. By attracting new residents, businesses and investment, our region becomes more innovative, efficient, and productive, leading to greater competitiveness and economic success.
Economic development incentives also support community development by helping to revitalize blighted areas, improve infrastructure, and provide resources for community projects. This creates a more vibrant and attractive community, which can improve the quality of life for residents and attract new investment.
Development incentive programs and policies like the Renaissance Zone, Tax Increment Financing Districts, and the 2-year tax abatement on new homes represent a trade-off. When used correctly, incentives have the potential to provide significant benefits to taxpayers through increased tax revenues, improved quality of life, economic growth, improved competitiveness, and community development. By carefully designing and implementing these incentives, our government creates a positive return on investment for taxpayers.