3 steps towns should take to control their economic fates
Christopher Robbins
Massachusetts communities can no longer rely on state or federal aid to fill budget gaps. Therefore, each municipality must be responsible for its own economic fate.
Cities and towns are failing to take advantage of economic development opportunities and tax revenues. They don't understand how to create the optimum number of local jobs. Nor do they understand municipal metrics that determine their economic well-being. They lack knowledge about industry clusters, especially which are thriving or struggling. And they don't know the decision makers at those enterprises who pay business taxes and create jobs.
Gov. Deval Patrick's economic development policy and strategic plan, “Choosing to Compete in the 21st Century,” recommends that each municipality have a “CEO” and team to create and implement a plan for job growth. Many municipalities are forming economic development corporations or committees to encourage new business, develop supportive customer-service policies and provide predictable regulatory processes that respect developers and residents.
To enjoy the benefits of a robust economy, each municipality must become a high-performing, self-reliant economic engine operating on four cylinders: residential; business; public sector; and nonprofit. Each represents an indispensable component of the local and regional economy, employing thousands and fueling millions of dollars of activity through wages, purchases of goods and services, and payment of taxes. To understand how they influence our municipal and regional economies, cities and towns can design and implement a three-step process.
1. Develop an economic profile. Include an appropriate set of metrics, then track historical performance. With this information, a municipality can better understand how its local economy works — listing its strengths, weaknesses and hidden potential. Examples of these metrics include payroll data from local employers; school budgets and per-pupil expenditures; housing starts and trends; job statistics; population trends; and demographics.
2. Develop an economic portrait of primary industries and small-business clusters. Include nonprofits, plus some of these: manufacturing, software, medical devices, financial, education, healthcare, information technology, leisure/hospitality, public sector, construction, legal, retail, professional, and business services. This portrait will provide a wealth of information and assist municipal leaders to answer three questions:
a. How do we support locally owned businesses?
b. What industries should we strive to retain or attract?
c. Are we too dependent on any particular industry? If so, how might that be a problem or strength for encouraging job growth?
Only a diverse business base can help municipalities survive economic storms and capitalize on opportunities during prosperous times.
Within industry clusters, metrics can be highlighted, including: number of local employees, top employers, income data, and local products and services.
3. Create and communicate your action plan to interested parties. Collect and interpret your municipal financial data and trends. Integrate your economic profile, portrait information, and economic development action plan into the annual municipal budget process. A review of this information can be useful to determine the best opportunities and plan next steps for job creation and growth.
Then explore opportunities to create public-private partnerships to reduce the cost of government, lower residential taxes, and improve the delivery of core services.
For such a strategy to succeed, each municipal and state leader must be held accountable for job growth and our economic well-being. This way, we can ensure our fiscal stability and quality of life.
Christopher Robbins sits on Southborough's economic development committee and on the board of directors for the Corridor Nine Area Chamber of Commerce.
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