Economic Development Notes

Economy

Definition: Distributing goods to meet people's needs and wants.

Economies change over time.

A flourishing economy is characterized by:

High employment (low unemployment rate).

Expanding gross domestic product (GDP).

Low inflation.

Questions to consider:

What happens to employment and inflation when GDP grows quickly?

What are the relationships between these variables?

How is the economy performing currently?

How does public policy affect the economy?

What other factors influence the economy besides public policy?

Economic Plan

Steps:2. Analyze local attributes:

Identify whether local firms are export or non-export oriented.

Assess factors like sales force, access to materials and markets, quality of life, schools, and transportation.

5. Set goals and priorities.

6. Implement the plan, overcoming obstacles.

7. Review the success of the implementation.

San Marcos Planning and Zoning Commission

Members are chosen by the city council for three-year terms.

Responsibilities include deciding on zoning issues and subdivision approvals.

Demographic characteristics of members can be observed from photos.

Janesville, WI - General Motors Closure (2008)

The city council had limited options to address the closure of the General Motors production facility.

The plant opened in 1919 and expanded to 5 million square feet, employing 8,000 people.

The plant's closure in 2008 resulted in the loss of 8,000 jobs in a town of 65,616 people.

Janesville has used a city manager-council form of government since 1923.

The city council consists of seven members elected at large for two-year terms.

Poverty and Economic Development

Economic development planning should begin with understanding where poverty exists and why.

Suburban areas can be richer than other areas.

Property Taxes (Example from Texas)

Breakdown of property taxes for a home worth 100,000.

School District: 1.50 per 100 of value - 1,500

Municipal: 0.43 per 100 of value - 430

County: 0.38 per 100 of value - 380

Road District: 0.08 per 100 of value - 80

Water District: 0.02 per 100 of value - 20

Total Property Tax: 2,410

Travis County Chief Appraiser sent out 438,009 appraisals.

Median house values:

Travis County: 275,112

Hays County: 201,964

San Marcos: 187,199

Dripping Springs ISD: 395,725

A proposal exists in Texas to reduce property taxes by raising the state sales tax by 1%.

Requires a 2/3 majority in both the State Senate and House.

Would then go to voters as a constitutional amendment.

In the House, this would require 19 Democrats to join Republicans.

House composition: 83 Republicans, 67 Democrats.

State Revenue Sources

Federal:

Personal income tax (varies depending on income level).

Payroll tax (Federal Insurance Contributions Act - FICA): 15.5\%
of paycheck.

State:

Texas depends on sales tax. The state sales tax rate is 6.25%

Local Governments:

Property tax.

Grants from higher-level governments.

Senators' Tax Plans:

Senator Cruz: Calls for one income tax rate for everyone.

Senator Rubio: Calls for ending taxes on capital gains (profit from selling assets). A capital gain is a profit that results from a disposition of a capital asset, such as stock.

Poverty and Income Changes (2014-2015)

Poverty is down, and income is up.

Texas performed better than the U.S. overall in poverty reduction and household income growth.

A family of four with an income of 25,000 is considered poor in the U.S.

Poverty rates vary across communities and states.

Texas has both rich (e.g., Fort Bend) and poor (e.g., Zapata) counties.

Education and Workforce

Mississippi's reliance on low-wage industries is linked to its large unskilled workforce.

Only 23.2 \% of Mississippi's adults had a bachelor's degree or higher in 2018 (lower than any state but West Virginia).

National average: 32.6 \%.

Alabama: 25.5 \%.

Texas: Slightly below average at 32 \%.

Real GDP Change by State (2013)

Rocky Mountain: 2.0

Southwest, Midwest,