(Ed.’s note: This is the second in a two-part series on the employment picture in counties and counties’ efforts to jump start economic development in tough times.)
Economic prosperity and job growth in some of the nation’s counties during these troubled economic times can often be explained simply by smart development, a strong tourism industry and a great location. But other success stories are truly the results of aggressive programs by county governments that use tools such as grants, tax incentives and citizen input.
While lacking heavy-duty manufacturing industries, Suffolk County, on the eastern edge of Long Island, has made due with an attractive tourism industry as well as niche industries such as software development and bar coding.
“Our environment is too sensitive for smokestack manufacturing industries,” said Judith McEvoy, commissioner, Suffolk County Department of Economic Development. McEvoy said the downturn in the stock market has caused some belts to tighten, but mostly in other parts of the state and country. She attributes the county’s good financial health, in part, to its economic development board, which helps the county manage business-district improvements, arts and culture programs, building designs and workforce incentives.
“If I were to describe what we do, I would call it a clearinghouse of all the economic development programs. People call our department and we direct companies. The county has a dynamic of education [State University of New York-Stony Brook], industry, quality of life and a trained workforce. And our unemployment rate is not suffering,” McEvoy said. As of Dec. 31, 2002, the county’s unemployment rate was at 3.7 percent.
Another dynamic tool for Suffolk County’s economic development has been the tax breaks it offers within its “empire development zones,” located in three towns.
Along with full tax exemptions for the first seven years, Suffolk County offers participants low-cost financing to help offset the cost of the land, a 10 percent state investment tax credit, a 40 percent reduction in electric bills for non-retail businesses, and a reduction in sales taxes, among other benefits.
Pennsylvania may provide one of the best examples of successful use of enterprise zones. As a direct result of the Pennsylvania Keystone Opportunity Zones (KOZs), more than 10,000 jobs have been created since the program was introduced in 1999. It’s a state and county program that offers tax incentives, often eliminating state and local taxes, for relocation of businesses to “poor” areas. Several of the state’s counties have KOZs, and more are expected to join the trend soon.
“It’s pretty gutsy – wiping out a huge chunk of the tax base for a while. It is a little bit of a balancing act – spending money to make money,” said Douglas Hill, executive director, County Commissioners Association of Pennsylvania.
“The types of successful businesses that have benefited from these tax advantages vary widely, from manufacturing and transportation centers to high-tech industries and a private airport,” Hill added.
Most of the KOZs are located in old industrial zones. In Juniata County, jobs were generated on a previously empty industrial property that is now a vinyl fencing factory. In Clearfield County, a former brickyard that sat dormant for 20 years is now a powdered metal company that officials expect to have as many as 50 employees in the near future.
“These are areas that we weren’t getting any money out of to begin with,” said Clearfield County Commissioner Gene Lunsford. “[The KOZs] are going to bear fruit for us. Eventually, it will pay us back.”
In another example, Lunsford said a private developer is preparing to build a Pennsylvania Department of Transportation facility in a KOZ. When the KOZ tax benefits expire in 2013, the facility will be added to Clearfield County’s tax rolls. Therefore, Lunsford said, the county will receive property taxes for a development that it never would have received taxes for without the KOZ, since government buildings don’t typically pay property taxes.
And in Jefferson County, Commissioner Ira Sunderland said there have never been companies that shut their doors and abandon the community once empire zone tax breaks expire.
“The businesses we’ve had so far are the businesses that are here to stay. We think [the KOZs] are working real well. And we think they’ll work even better in the future,” Sunderland said.
Seneca County, N.Y., a sparsely populated region near the scenic Finger Lakes area, had suffered for years from plant closings and the downsizing of an Army depot. So in 1993, county staff assembled a team of county workers, state officials, Cornell University professors and private consultants to apply for a Defense Conversion Adjustment (DCA) grant.
Once the grant was secured, along with several other federal, state and local funding sources, the Employment and Training Department designated two full-time employees for a new county community-planning project. The emergence of low unemployment and a viable economy are the results of linking economic planning and employment training issues to create jobs, county officials said.
Waterloo Premium Outlets, a 112-store shopping center, opened in 1995 and a large dental laboratory and an aluminum recycling plant soon followed. The Seneca County Industrial Development Agency (SCIDA) provided a $150,000 low-interest loan and property tax abatement; the Town of Seneca Falls provided a $385,000 loan under its Community Development Block Grant Program; and Seneca County, using Canal Corridor Initiative funds, provided a loan of $400,000. As a result of the SCIDA’s involvement, Scepter Industries saved nearly a quarter-million dollars in sales tax exemptions and another $60,000 in mortgage recording fees.
“It’s a balancing act,” said Mark Sawyer, director SCIDA. “Can you give everything away and pile that burden on other citizens and residents in the community? No. I think our county board has looked at that balance. With sales, property and income taxes, the county has a broad base of taxes to draw from. We haven’t seen that burden increasing.”
In fact, Sawyer said Seneca County had the third-lowest property-tax increase in the state last year. Furthermore, he said the county board managed to place $1 million into reserve during that time. Meanwhile, most counties in New York have suffered terrible property-tax burdens in the past year because of the state government’s passing programs to the local level, Sawyer added.
In addition to the various financial incentives arranged by SCIDA, firms that relocate to the county have a ready and willing workforce, Sawyer said. Although many county residents still commute to jobs in Rochester and Syracuse, many would just as soon stay closer to home.
Ahead of the curve
Pinellas County, in South Florida, has not had substantial economic and unemployment problems, but officials there are staying ahead of the game by involving the community in its development planning.
Pinellas is the most densely populated county in Florida and has little room left to expand, so the Board of County Commissioners recently sought input from the community on how best to develop industry at a two-day Redevelopment Opportunities Summit, attended by about 400 citizens.
“It made people think about what would be good for [certain areas]. It also made them appreciate the challenges,” said Karen Williams Seel, Pinellas board chairman. “It was a community-design principle. How can we bring in architecture and high-quality designs to make people want to live here and stay here?”
Williams Seel said there will be another summit later in the year in a different part of the county. A local electrical company helped fund the summit.
She added, “Right now our economy continues to be fairly healthy. People want to come South, so you can usually keep your economy chugging along.”
And, of course, there are the counties that are just plain lucky, with location being used as a tool for economic development. Clay County, Minn. and Brazos County, Texas are two mid-sized counties that are apparently doing “nothing special,” but simply reaping job-growth benefits and economic stability due to location.
“We formed an economic development board about 15 years ago to recruit businesses to the community. And we have Texas A&M. That creates a lot of opportunity,” said Brazos County Judge Randy Sims. “As far as anything unusual, it’s really nothing. We are probably going against the national grain a little bit.”
Sims said A&M students are very loyal and often return to the county to retire. But he said the low unemployment rate in Brazos – and in the city of College Station, where it’s the lowest in the nation at 1.7 percent – is “sometimes a disadvantage” because relocating companies worry they won’t find employees.
Moorhead, a town in Clay County, is right behind College Station in unemployment, with a low rate of 1.8 percent. Clay County Commissioner Jon Evert said Moorhead’s 31,000 residents make up more than half of the county population, adding that the town’s economy is representative of the county’s.
“Last year, we had an investigative committee to get aggressive with economic development. We’re the only county on the western edge of Minnesota that had any growth at all in the ’90s,” Evert said.
Clay County is basically the “twin city” of Fargo, N.D., he said, adding that “Fargo is really booming in many ways.
“A year from now, I hope I can tell you some things we’re doing differently. We have not had to do any layoffs, but we certainly don’t know what will happen this coming year,” Evert said.
Waupaca County, Wis. has not only been layoff free, it’s actually increased its number of jobs and seemingly has no worries about the potential of eliminated funding from the state legislature.
“We’ve only got three cities, and an influx of small industries that each have five, six, 10 people working at them,” said Duane Brown, county board chairman. “It seems that there are some jobs around here. They’re not the highest paying, but you can find them. And it sounds like the new governor is not going to cut off revenue funding.”
Waupaca County lies about 40 miles west of Green Bay, and Brown said much of what keeps the local economy vital is the heavy corridor of traffic that runs through the county for commuters between Green Bay to the east and Fox Valley to the west.
