Legislation for a More Effective and Accountable Economic Development System
Kentucky needs a strong economic development system that crafts a vision and plan for the future and assures coordination, transparency and accountability in the use of economic development resources. MACED and KFTC have developed three legislative proposals to make Kentucky’s system work better.
1. Economic Development Annual Transparency Report
What is it?
An annual report that:
• Compiles total state spending on economic development incentive programs and business tax exemptions.
• Gives detailed information on how much incentive spending goes to each company and project.
• Includes information on how well the company or project is meeting its obligations.
• Makes incentive and exemption information easily accessible on a searchable public web-site.
Why?
Transparency in economic development spending is essential to democratic participation. Citizens and legislators need easy access to complete information in order to make sound decisions.
2. Evaluation and Sunsetting of Incentive Programs
What is it?
• Attaches sunsetting or expiration dates to all economic development incentive programs so that they expire, requiring reauthorization, every eight years.
• In the year before each program expires, the Legislative Research Commission conducts a systematic review to help assess effectiveness.
• Requires all new tax expenditures to have a sunsetting date of no more than eight years from the date the expenditure is created.
Why?
Requiring reauthorization of development incentives allows the state to regularly review and evaluate the effectiveness of economic development spending and to end programs that are not working.
3. New Vision and Plan with Broader Participation
What is it?
• Requires creation of a new 20-year vision for economic development.
• Requires a new process to create a comprehensive statewide economic development plan.
• Requires annual reporting to measure progress against the vision, including attention to quality of life indicators.
• Broadens membership of the Partnership Board overseeing the Cabinet to include representatives of education, agriculture, local government, civic and community development organizations.
Why?
Broad-based participation in creating a vision and plan for sustainable economic growth and a high quality of life will promote widespread commitment to and success in achieving shared goals.
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