THE SHORT ANSWER:
Economic development is the work a community does to strengthen its local economy by creating jobs, supporting businesses, attracting investment, and growing its tax base.
WHY SHOULD I CARE?
Because the strength of Pflugerville’s local economy affects the opportunities, services, and financial burden shared by everyone who lives here.
Here’s why that matters to you:
Communities compete with one another for businesses, especially companies that bring good-paying jobs and significant investment.
When more businesses invest and operate in Pflugerville, they also generate additional taxable activity. That can bring more revenue into the community to help support a growing city.
Communities compete with one another for businesses, especially companies that bring good-paying jobs and significant investment.
MAKE IT MAKE SENSE.
In Pflugerville, economic development has its own dedicated funding source.
In 2001, voters approved a half-cent sales tax to fund economic development. Today, that money goes to the Pflugerville Community Development Corporation, or PCDC, a Type B economic development corporation.
So when you spend $100 on something taxable in Pflugerville, 50 cents goes to PCDC.
What is that money supposed to do?
PCDC works to attract new businesses, help existing businesses stay or expand, create local job opportunities, and support things such as workforce development and infrastructure needed for economic growth. Texas law also allows Type B corporations to fund certain other eligible projects, including some parks and recreation projects.
Economic development isn’t free money. It’s public money being invested with an expected public benefit.That’s why competition will often involve financial incentives. The idea is to make that community more attractive when a company is deciding where to locate or expand.
But an incentive isn’t supposed to be simply free money for a business. When an economic development corporation directly funds a company, Texas requires a written performance agreement that spells out what the company is expected to deliver, including jobs or payroll and capital investment, as well as repayment terms if it fails to meet those requirements.
So perhaps the most important question isn’t simply whether Pflugerville should support an economic development program led by a team of highly skilled professionals.
It’s whether the taxpayers will get enough public benefit from the use of PCDC funds in return for what our leaders are choosing to spend it on.
THE RECEIPTS:
1. HOW PFLUGERVILLE FUNDS ECONOMIC DEVELOPMENT
PCDC is Pflugerville’s Type B economic development corporation. It receives a one-half-cent sales tax on taxable purchases in Pflugerville to fund economic development activities.
2. WHAT TEXAS LAW ALLOWS THE MONEY TO FUND
Texas allows Type B economic development corporations to fund eligible business-development projects and certain quality-of-life projects, including parks, sports facilities, infrastructure and affordable housing.
3. WHAT BUSINESSES MUST PROMISE WHEN THEY RECEIVE DIRECT EDC FUNDING
An economic development corporation cannot simply hand sales-tax money to a business. Texas requires a written performance agreement when an EDC directly funds a business or makes expenditures benefiting an eligible project. At minimum, the agreement must address promised jobs or payroll, capital investment, and repayment if the business fails to meet the agreed requirements.
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