A press release from McHenry County:
McHenry County Hosts Economic Development Summit
On Friday, February 19, 2016 McHenry County hosted an Economic Development Summit to present incentive programs, new developments, and discuss strategies for building collaboration.
More than 50 local government leaders, managers, and economic development staff attended to learn about how the County can assist their efforts to compete for employers who offer primary jobs to County residents.
The McHenry County Economic Summit.
Encouraging a county-wide and “one voice” approach to economic development will position McHenry County and local governments to be more attractive to business and industry.
Jonathan Burch from the Chicago Metropolitan Agency for Planning reviewed the Comprehensive Economic Development Strategy (CEDS), which is a joint plan for economic development with McHenry, Winnebago and Boone Counties. The CEDS identifies industrial clusters and opportunities for growth within the Counties, including advanced manufacturing, transportation distribution, agriculture and food processing, and healthcare and medical sciences. The CEDS will serve as a guide to create sustainable and primary jobs in McHenry County.
Collaboration between the County and local municipalities to support development can be mutually beneficial.
McHenry County Deputy Administrator Scott Hartman discussed the County’s revolving loan fund and its availability to existing and relocating businesses. An economic development incentive tool is being developed to provide tax abatements to businesses based on their value and investment in the County.
Charles Eldredge also provided an overview of the primary incentives for locating businesses within the Harvard/Woodstock Enterprise Zone, and guidelines to propose amendments to the zone boundaries.
Aside from incentives, the CEDS identifies improved infrastructure and transportation access as critical to economic development.
McHenry County Board Chairman Joe Gottemoller discussed the intersections of Randall and Algonquin Roads, which is the busiest intersection in McHenry County.
According to SB Friedman’s “Randall and Algonquin Road Transportation Study” over 81,000 vehicles per day currently travel through the intersection.
Retail and businesses within the corridor contribute more than $10 million to annual sales tax collections for the Villages of Lake in the Hills and Algonquin, along with McHenry County.
The Randall Road project will grow the corridor by an estimated 32%, saving travel time, increasing visibility and market reach for its businesses.
The Economic Development Summit was a vital step in advancing a unified approach to maintain and expand our job base in McHenry County. The County will build upon the dialogue at the Summit and
pursue common goals of increasing primary jobs in McHenry County.
Economic Development is nothing more than a government sanctioned Ponzi scheme.
Can anyone show me one country / state where economic development has lowered the cost of living?
I can show you Detroit.
Only one reason for concentrating on economic development – GREED!
Do you know why we don’t have the federal government run the economy?
Because we know they’d make a mess of it.
Yet we are to believe that a bunch of local bureaucrats, some elected and some appointed, are able to figure out which businesses will bring us excess taxes if we give them subsidies, and which ones won’t.
Nobody is that smart.
For McHenry county, as well as Illinois, it’s too little too late.
Nobody in their right mind wants to bring their business or live in
this tax & spend Hellhole.
More TIF’s will not restore solvency to Illinois.
The Great Exodus shall continue ….
Wait a minute! I never had anything to do with Smrt’s newsletter. Its appearance surprised me as much as anyone else. Smrt and I never communicated in any way, shape or form.
Steve Stanek
More mental masturbation, publicity for some and some get out of the office time for others.
Nobody’s asking to build here
This County has One Voice, and it is Screamng for lower property tax rates.
Higher spending–in the form of special property tax deals for some but not all recipients–amounts to a strip mining operation by government insiders to extract our scant remaining OPM ( other people’s money) resources.
WHY will this strategy of tax money giveaways to favored insiders fail?
1. In a Black Hole economic community, the sucking compression force exerted by property tax rates between 3% and 4.6% overwhelm other economic forces.
Home values must go lower, as property tax rates far in excess of national average are capitalized into property values.
( Commercial property tax revenue shrinks because either they are abated, or abandoned due to unnatural competition by those competitors who have been abated).
The population of tax – paying property shrinks, raising the tax RATE ever higher.
2. At such time as the abated commercial property is due to begin paying taxes, extensions and extra abatements need. See Bull Valley Ford, Sears in Hoffman Estates for examples.
Expected return models should include a large probability of extended abatements beyond agreed termination date.
3. There is an extremely high probability that a recession will occur within the next 5 years. Since the industrial revolution there has been no decade in American history in which a recession has not occurred.
In the case of ‘bad timing’ ( 100% predictable by government officials making the deals and passing out the cash), the developers getting the taxpayer largesse will likely be treated to bailouts in the form of extensions and further abatement. Taxpayers will suffer through the recession on our own, paying twice for the developers’ “heads I win tails you lose” position.
4. Creating Jobs is not helpful to the community of tax paying homeowners.
Community homeowners are subsidizing each job created, so it is a fair question: what is each job worth to the community?
In Woodstock, the property tax rate is 4.6% of total home value. In order that this tax rate not go any higher the taxable EAV must not falland the Levy must not rise.
The EAV will not be bolstered by jobs, because the home will be worth the same as before the job.
The levy is morellikely to rise, as government officials have promised infrastructure building projects to developers in return for ‘jobs’.
When a Job is created, where does the money go?
8% payroll tax, 5% State tax, 15% federal tax.
28% off the top does zero good to local economy.
12% ( or more) of household income goes to pay local property taxes.
So, 40% of the job income is spent with zero impact on local economy.
How much of the rest is apt to be spent locally?
Depends on wage rate; those earning higher wage rates are smart enough not to buy a pricey home in a Black Hole economic community. More likely they will take their money home to Lakewood to spend.
If new jobs are at medium to low wage rates, why did those businesses deserve any incentives in the first place? Plenty of business which cater to poverty conditions will open on their own without demanding taxpayer subsidization.
5. Of course no new property development will occur in a 4.6% property tax rate community….unless subsidized. One easily obtained subsidy is for ‘affordable housing’. Every housing unit built creates a new cost burden. If the housing unit is priced below ‘break-even price when calculating property tax contribution, community property values are sucked lower as the property tax rate rises higher.
Example: one housing unit, 2.8 individuals per unit, 22% of individuals between ages 5 and 18. (.6 new students per unit). .60 of annual property tax cost per pupil ($9000 in Woodstock) is $5400. So each new unit would have to be priced such that the property tax rate multiplied by the fair market value of the unit exceeds $5400 annually, just to pay the new education cost burden created by that unit.
Considering school tax is about 2/3 of tax bill, each new unit must pay $8100 annually in property taxes just to stay even with existing taxpayers.
The breakeven price for such a new housing unit would be $8100/.046=$176100.
In order to get Woodstock property tax rate down to 3% (from 4.6%), the breakeven price would have to be $8100/.03= $270,000.
The one and only solution that would help a Black Hole economic community ( now all of McHenry County) is to decrease all levies, and cease to remove commercial properties from taxable EAV rolls., and cease to abate replacement taxes to businesses.
That would begin to lower property tax rates.
That would turn a negative feedback loop into a positive feedback loop.
Exactly how do you think you lower your tax burden without attracting primary jobs?
The idea that you can cut yourself into a position of prosperity is flawed.
Reaganomics is based on job creation.
Rauner’s turnaround agenda is based on job creation.
Before you criticize economic development- You think Indiana and Wisconsin don’t use incentives to compete?????
Jobs have no hope of helping Woodstock. Please read the specifics of the post above.
You cannot compare a black hole community to others, because the impact of a 4.6% property tax rate overwhelms all else.
The generality “the idea that you can cut yourself into a position of prosperity is flawed” , without supporting basis of that presumption in this specific county ( with higher than 3% property tax rates) is flawed.
In Woodstock prosperity is not an option, it is a fight for survival. 4.6% property tax rate stifles all ‘ contributory’ development.
Please answer the specifics of the post above. Your general statements are simply opinions which do not apply in the case of areas which have crossed a point of no return.