They include items such as capital facilities improvements, public safety, schools, and additional administrative costs among others. There are difficulties in attempting to identify these costs. Items such as these will vary with the size of the project and current community position. The key is determining the costs that are related to the particular development under consideration and not costs that would be incurred as a result of other factors. This is not an easy task, but a necessary one if the total impact is to be considered.
Incentives are an important tool in economic development programs.
The key to their success is to assure that more is not given away than is received. This requires that complete impact studies be done which include all costs associated with the project. While this task is arduous, it is a critical part of insuring that the community gains all that it should from businesses locating in the area. George H. Rafael is a student in the Master of Science in Planning program at the University of Tennessee, Knoxville. His interests include economic development, industrial development and location analysis.