Defining Appropriate Program Indicators

Defining Appropriate Program Indicators 1

JOINT LEGISLATIVE ECONOMIC DEVELOPMENT AND GLOBAL ENGAGEMENT OVERSIGHT COMMITTEE T H U R S D A Y , M A R C H 8 TH, 2 0 1 8 Rodney Bizzell, FRD, NCGA

County Tier System 2

1987

2018

 Policy Goal  Award tax credits for employers who create jobs in any of the 20 most severely distressed counties

 Policy Goals  Tax credit program eliminated in 2014  More than 15 programs use the tier system to distribute funding or resources  Indicators  Rate of unemployment  Median household income  Population  Property value per capita  Application of adjustment

 Indicators  Rate of unemployment  Per capita income

factors

January 11, 2018 Meeting 3

 Evaluated the Tier System  Includes a mix of indicators that do not represent a single cohesive definition of economic distress  There are many ways to define economic distress  Economic distress of residents  Economic distress of governments  The definition of economic distress should be

consistent with a program’s goals  

Define what is intended to be measured Then determine the indicators that best measure it

4

Econ Dev Programs OneNC Fund CDBG IDF Account JDIG JMAC NC Green Business Fund Main Street Solutions Building Reuse & Economic Infrastructure Fund

 What is the stated purpose or goal

of the program?

 How is the tier system used in the

program?

 Is the tier system the appropriate

measure for the program?

 If the tier system is not used

appropriately, are there better indicators?

One North Carolina Fund 5 DISCRETIONARY CASH-GRANT PROGRAM AWARDED TO LOCAL GOVERNMENTS AS PART OF A NEGOTIATED CHALLENGE GRANT ALLOWS GOVERNOR TO RESPOND QUICKLY TO JOB-CREATION PROJECTS

OneNC: Program Goals 6

 Awards based on:  Number of jobs created and level of investment  Economic impact of project  Importance of project to State and region  Funds awarded to a company must be used for:  Installation or purchase of equipment  Infrastructure needs of existing building  Infrastructure needs of new or proposed building to be used for manufacturing and industrial operations.  https://edpnc.com/incentives/one-north-carolina-

fund/

OneNC: Use of Tier System 7

 Local Match  Tier 1 = $1 for every $3  Tier 2 = $1 for every $2  Tier 3 = $1 for every $1  Funding grant criteria NOT based upon tier location

of project 

 

Lower tier counties receive more funding grants through OneNC than through JDIG 2017: $24.2M; 34 awards; 2959 jobs 2013-2017: $73.9M; 208 awards; 25,213 jobs

OneNC: Appropriate Use of Tier System? 8

 Analysis:  Is the tier system used appropriately in this program?  If not, are there better indicators available?  County well-being or Resident well-being?  Local match requirement seems to indicate program goal to measure government well-being.  Tier System does not effectively measure government economic distress.  Government economic distress may be more accurately measured by local tax capacity.

Local Tax Capacity Indicator 9

ADJUSTED PROPERTY VALUE PER CAPITA (70%) SALES TAX BASE PER CAPITA (30%)

January 11, 2018 Meeting 10

 Tax capacity typically measured by 2 or 3 largest

revenue sources  

Adjusted property value per capita (70%) Sales tax base per capita (30%)

 Tax capacity among local governments varies  Good measure for ability to pay  NOT a direct measure of the economic well-being of county residents  Useful for determining resource allocation and

required local contributions where ability to pay is a factor

Tax Capacity Rankings 11

Positive Change from 2018 Rankings 12

Negative Change from 2018 Rankings 13

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OneNC Stated purpose of program?

 Create jobs via a grant that may be

used for equipment, structural repairs, and construction of infrastructure

 Tier system used to determine local

match requirement (ability to pay?)

How is tier system used?

Is tier system the appropriate measure?

 Tier system a mix of indicators that

are not representative of a single cohesive definition of economic distress

 Tax capacity is a good measure for Is there a better indicator?

ability to pay

Policy Questions 15

 Is the Tier System the

appropriate indicator for the local match requirement in the OneNC program?

 Would tax capacity be a

better indicator for the local match requirement?

16

Utility Account CDBG, Ec Dev Stated purpose of program?

How is tier system used?

 Provide infrastructure grants to local

governments, with an emphasis on economically distressed counties

 Tier system used in two different ways:  Determine economically distressed counties  No local match required for 25 most distressed counties  Tier system a mix of indicators that are

Is tier system the appropriate measure for local match requirement?

Is there a better indicator?

not representative of a single cohesive definition of economic distress

 Tax capacity is a good measure for

ability to pay (re: local match)