Civic Caucus interview with Michael Hicks, Director of the Center for Business and Economic Research, and Professor of Economics at Ball State University.

Excerpts from interview that I found most interesting regarding A.) business relocation efforts and B.) how people select where to live:

A.)  “Tax incentives have little effect on business relocation. . . . Research says there is little effect of these tax incentives.  Instead, the research suggests four things:

(1)  Many state incentives are really just part of the tax system and everybody gets them. These non-discretionary credits seem to work better than those offered through a political process to firms.

(2)  Firms who receive discretionary credits appear to offer a more optimistic assessment of job creation than those who lose out on the bidding for these credits. This means the credits are likely going to the wrong businesses.

(3)  There is little evidence that these credits play a large role in economic growth. Most studies find some effect, but the cost per job is often astonishing…..

(4)  Discretionary tax credits are really a symptom of a poor tax climate and credits simply shift the cost of government to existing, and presumably successful, businesses.

“As long as voters are going to reward the talk of commercial development by our leaders, they’re going to think that incentives matter,” Hicks continued.”

B.)   “[Household] migration has been slowing steadily for the last generation. . . . The communities that have done best have responded to what households are looking for. People tend to value schools enormously, recreational amenities and safety. . . .The amenity aspect is really driving location decisions.”