Parker Poe Creates New Fiscal Impact Model
Oct 02, 2018 09:28AM
By Kathleen Maris
Parker Poe Consulting has created a model to estimate the fiscal impact of economic development projects in South Carolina. The model makes it possible to perform a data-driven analysis of the costs and benefits of any given project, including the use of taxpayer incentives.
“The model solves an age-old problem for economic developers: Are we offering too much?” says Jeff Ruble, director of the Richland County Economic Development Office. “Being able to back up your answer with data is the key, and that’s what this model does. It puts us in a stronger position to say, ‘This is a good deal, and this is why.’”
The Fiscal Impact Model generally takes an hour or less to work through for any given project. County officials and economic developers input a broad variety of data specific to the project, whether it’s a new corporate headquarters, the expansion of a manufacturing facility, or virtually any other economic development. The model takes into account benefits that include dollars invested, jobs gained, and taxes paid. It also factors in costs that include incentives, fees waived, and increases in local education budgets.
After inputting the data, the model charts the public costs and fiscal benefits that would result each year. It calculates the break-even point – the year in which the county recoups its investment in the project – as well as the fiscal benefit-to-cost ratio and the broader economic benefit-to-cost ratio. At the end of the process, officials would be able to say what the county would earn or lose for every $1 invested in the project.
“Parker Poe Consulting’s fiscal impact model has helped us better understand the costs and revenues associated with projects expanding in York County,” says David Swenson, director of York County Economic Development. “The model is easily understandable, flexible, practical, defensible, and has become an essential part of how we determine if a project’s benefits will outweigh its costs.”
Five counties in South Carolina are already using the model. Any county or regional economic development organization across the state can license it from Parker Poe Consulting. For more information, contact Azad Khan at email@example.com.