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Economic Incentive War

State Activity on Economic Incentive Wars
September 30, 1997

The following is an update of events and some additions to my web-site
concerning "The Economic Incentive Wars Between the States." A state by
state tracking system of this information is on our web-site at the
following address:

The long-awaited study by the General Accounting Office (GAO) on what
role, if any, federal economic development programs play in subsidizing
interstate job flight is complete, reviewed, and was released to the
public - Monday September 29, 1997. The study spans eight programs in
seven federal agencies. It is publication RCED-97-193, first copy is
free, order by voice line at 202-512-6000 or by faxed note to

PENNSYLVANIA - September 25, 1997
The Pennsylvania House of Representatives Finance Committee under the
leadership of Chairman Rep. Carl Boyes has formed a task force to deal
with the state incentive wars and related issues. He has appointed Rep.
Brown as Task Force Chairman to review the issues.  The witness schedule
for the Sept. 17th and Sept. 25th meetings will be added to my web-site
I the near future. Also, abstracts of the various testimony will be in
subsequent bulletins with the full text of Senator Horn's testimony
outlining a strategy of economic regions based on cooperative
exploitation of technological resources. Initial discussions are taking
place between Pennsylvania, Ohio and Indiana along these lines.

Mr. Carl Rist talks about a "Unified Development Budget" for North
"Being serious about jobs and business climate means investing scarce
public funds wisely. Yet, policymakers in most states, including North
Carolina, do not have a comprehensive understanding of how much they are
spending on economic development. The reason for this is that
investments in economic development include both line-item expenditures
and off-budget tax incentives, as well as a range of interest subsidies,
public agency commitments, financings by quasi-public corporations and
other activities."

"One strategy for addressing this knowledge gap is the creation of a
unified (or integrated) development budget. Such a budget allows
policymakers, state opinion leaders, policy advocates, and the citizenry
to better see what is presently spent on development. North Carolina's
Economic Development Board has made a start on this assignment,
developing a summary of all on-budget development spending and a few
tax-based measures. Building on this work, we have created a more
complete accounting of North Carolina's on- and off-budget expenditures
for economic development."  To see what their analysis found go to

General Motors officials seeking a tax abatement on a proposed $355
million truck plant in Moraine, Ohio apologized to the Kettering /
Moraine school board for misleading them into believing that Moraine had
competition from other sites. GM was granted a 100 percent abatement,
worth $4 million over 10 years from the Moraine City Commissioners and
was subsequently approved by the Kettering / Moraine school board.
Later, the board said GM officials mislead them into believing Moraine
had competition from sites in Louisiana and New Jersey.  GM officials
later confirmed that the Moraine plant is the only site being
considered. A high-ranking GM official apologized to the board as they
met again to decide whether or not to rescind the abatement it had
granted. The board voted 3-2 in favor still granting the abatement.

The text of a recent Columbus Dispatch article entitled "High employment
could derail state incentive
programs"		www.geocities.com/CapitolHill/2817/dispatch3.htm

Mr. Timothy Bartik discusses 8 Policy issues for Economic Development

Jan Brueckner writes "The Bad Side of Intergovernmental Competition: Tax
Competition and the "Race to the
Bottom"	www.geocities.com/CapitolHill/2817/brueckn.htm

Unofficial Committee Minutes from Ohio Economic Development Study
Committee's 7th Committee Meeting

U.S. House Resolution 896 -Regional Economics

Bryan Riley, Executive Director - Kansas Public Policy Institute
Testimony Before the Joint Committee on Economic Development - August
29, 1996
AND MORE......