ECONOMICALLY DEPRESSED AREAS

The key to helping economically depressed areas isn't government, but the cooperation of government and industry.

Economically Depressed Areas The answer to “fixing” economically depressed areas is, of course, to generate prosperity. That means giving the residents a way to increase the standard of living that they have been subjected to. THAT means attracting employers that can elevate the local population. But how to do that? First we have to look at the problems that keep potentially interested businesses away from these areas. Largely, these problems are the same as what plagues the local residents. Resources and infrastructure top the list. The dilemma is that the lack of resources and infrastructure are also what keeps these areas from being able to overcome their obstacles.. because it makes it difficult, if not impossible, to attract outside revenue. Breaking this cycle is the answer we’re looking for. Problems- Lack of resources Lack of infrastructure So, how do we do that? As with any exchange in a free market, the way you acquire goods, services and resources is to offer something of equal (in the eyes of the other party) value. The sticking point in the past has been that these areas are short on the resources and so, they believe, have no value to bring to the table. However, if we look at what we already do with businesses with tax breaks we can also find that resources can be promissory as opposed to tangible. Now, if we ONLY look at it as a situation where we allow them to not pay taxes we still offer little of value due to the fact that that promise can be made most anywhere without having to deal with the issues associated with impoverished areas. We have to look a little bit further, but the same premise can be used to build up areas that otherwise would have no promise of hope. If we offer tax breaks based on a business’s expenditures in regard to building up infrastructure and area improvement we can accomplish our goal as well as other positive outcomes. First, obviously we can enjoy upgrades such as road improvement. We can give tax breaks for monies given to utility companies for upgrading systems. This could affect resources like water quality, electrical dependability and broadband access just to name a few. This also gives us an added value in that private companies are far more likely to get value in the services that they hire for as opposed to the notorious waste that government is known for. Another benefit that can be reasonably expected is that the companies paying for the upgrades have a stake in those upgrades. Municipalities are often operating in a manner consistent with providing a base level of quality. Rarely will you see them going out of their way to make a bigger, better anything without some political benefit to be had. However, the companies would be RELIANT on the upgrades that they were paying for and would likely opt for the higher quality/value options which would benefit them, and the community, most. Now, the breaks couldn’t just be equal to what they were spending as it would only mean that they break even and that’s not very incentivizing. If the tax break would be 1.5 to 2 times the amount spent then it would be advantageous to the company and lead to the revitalization of areas that previously had no hope. They also would be able to set their own tax breaks in that they could save as much as they were willing to spend.. and the more they spend the more the area benefits. By using this simple, effective method of community, business and government symbiosis we can bring prosperity to those who had little hope before. Tax breaks awarded as companies make infrastructure improvements This attracts businesses to areas that have no other options Improves on efficiency related to infrastructure improvement projects Higher quality of infrastructure and resources This improves the standard of living for the residents and the resources for the businesses that invest The more businesses invest, the more they save