Sacramento County Economic Incentive Policy

REASON FOR INVESTIGATION

The Grand Jury was concerned about the impact of economic development on local government and the taxpayer.

BACKGROUND

The County of Sacramento has adopted an Economic Incentive Policy. Within that, the Business Incentive Program provides incentives for new or existing businesses in the unincorporated areas of the county. They have offered the incentives to targeted companies that provide: information services, electronic components, printing and publishing services, food processing, scientific equipment and instruments, and medical equipment and health services.

The policy allows for incentives if there is construction of new facilities or other capital investment that results in a "long-term" commitment to the area. It provides incentive packages on a case-by- case basis that could include any of the following: rebate of unsecured property taxes for a fixed number of years; tax-exempt financing; accelerated and individualized permit processing; employment and training services; construction of off-site improvements and fee rebates or fee deferrals.

The County has created the Office of Economic Development that has taken many steps to provide information to businesses including the March 1996 publication "Getting Down to Business - Your Guide to Doing Business in the County of Sacramento" and "Fast Tracks," a "one-stop checklist" that was published as a supplement to the Business Journal on April 3, 1995.

PROCEDURES FOLLOWED

The Grand Jury conducted interviews with county officials and staff, local business interests and reviewed official documents, press reports and information available on the Internet.

FINDINGS

Many cities and counties in the United States offer "economic incentives."
The County of Sacramento policy acknowledges that the county must be "pro active" in bringing jobs to Sacramento even if there is a cost for such action.

The County of Sacramento policy is "revenue neutral" and selective. "Revenue neutral" means that, at most, the costof the incentive equals the amount the benefiting company directly contributes to the county in personal property and utility taxes. "Selective" means that it has to be a "targeted" type of firm, that meets specific requirements established by the Board of Supervisors, in order to receive certain limited benefits for a fixed period of time.

CONCLUSIONS

Since the policy is "revenue neutral" there is no adverse impact on the delivery of county services in general.

The policy recognizes that government can work with business in ways that are beneficial to both.

The policy adopted by the County is selective and does not shift costs to taxpayers.

RECOMMENDATIONS

The Grand Jury recommends that:

1. The County keep its economic incentive program revenue neutral.
2. The County keep economic development as a high priority.

RESPONSE REQUIRED

The Penal Code requires response to the recommendations contained in this report be submitted to the Presiding Judge of the Sacramento Superior and Municipal Courts by September 30, 1997, from:

Sacramento County