By Andy Hayes, NLEA President
Economic development at its simplest level is all about maintaining and growing a stable tax base and creating full-time year round family supporting jobs for residents. Local units of governments have known this for years and this is why elected officials support economic development.
Here’s how it works:
When a company locates in a community they pay taxes, which directly support local units of government (city, village, township, county, schools, law enforcement, ambulance, cemetery, etc.). When they chose to expand, this increases their taxes and support of all the entities on their tax bill. This helps all the taxing units’ budgets and residents they serve.
When a company closes or chooses to leave, then the taxes end and all the taxing units lose revenue. This hurts all the taxing units’ budgets and ultimately the residents they serve.
Companies also create jobs. The NLEA targets and assists companies that create year-round, family supporting jobs with benefits.
When a company creates these jobs, the families also pay taxes and invest in houses, cars, groceries, services, etc. They also send their kids to area schools. In other words, they spend their paychecks around the area in a variety of ways. This helps the economy create all sorts of spin-off jobs from insurance sales people to teachers. This helps area residents and creates more taxes for local units of government.
When a company retains and creates jobs, this is good for the area and all the others that live here. When a company loses jobs, shuts down and/or leaves the area this is bad for the area and all the residents that live here.
Although all jobs are important and add to our economy, not all jobs are equal. The NLEA targets larger manufacturers that create “base jobs.” These are consistent year-round jobs/tax base that do not fluctuate with the season. Base job providers are those companies that make and sell products outside the region, across the USA and/ or internationally. Their efforts increase the economic pie by adding new revenue to the area from outside the region.
These companies have many options for where they could relocate. Our area is a long way from their market and they are recruited constantly by others to come locate in their town. The competition is fierce. It is for this reason we all must work together and do whatever is feasible to keep these companies here.
Our distance from the market place is also why supporting entrepreneurs and startups are part of our strategy. We help those that have already decided to live here, figure out a way to launch, and grow a business (creating jobs, taxes, etc.). These businesses typically start small, but grow over time.
The NLEA model/funding approach saves taxpayers’ dollars.
The “how” of funding for the NLEA is one of the nuances of our region’s more advanced method of funding economic development and is designed to save taxpayers’ dollars and increases the level of service everyone receives. Formed in 1984, the NLEA approach has been proven by a 35-year track record of success while maximizing limited taxpayer’s dollars.
From the beginning (in 1984) it was established that the partner counties would each make a major investment (based on relative size of each county) but the total of the county’s investment would equal no more than 50% of the NLEA budget.
This was done for two reasons. To stretch limited taxpayers’ dollars and to ensure that others also agreed with this collaborative approach. This requirement ensures that other units of government (cities, villages, townships) as well as private companies and other organizations would also pay into the organization. This gave positive proof that others agreed with the model.
This decision has proven to be a “best practice” throughout the state of Michigan as it encourages units of government of all sizes to collaborate, and it adds the important private sector investment to the mix. It is this public/private partnership that make projects work and saves tax dollars for taxpayers and valuable time/resources for companies; a win-win.
Because the counties cover 50% of the costs, the local units of government invest much less.
As a result, communities and companies throughout our region have access to a team of economic and community development professionals that none would afford if “going it alone.” This team provides the local boots on the ground necessary to establish relationships and address early on various challenges and opportunities that would go unnoticed.
For more information about the NLEA, partners, programs, services and resources please visit www.northernlakes.net , visit us on Facebook or contact our office at 231-582-6482
