by Kelley Rendziperis, on Aug 26, 2015 9:15:00 AM
Clients often ask Site Selection Group which economic incentives are most prevalent — statutory or discretionary incentives. Economic incentives are generally classified as either statutory, quasi-statutory or discretionary.
Statutory incentives include economic benefits that are earned by right if a company meets certain thresholds or performs certain activities. Quasi-statutory incentives are similar, but usually require some type of pre-application and/or pre-approval prior to being able to claim them. Discretionary economic incentives are completely at the government’s discretion and require advance negotiation and procurement.
Most economic incentive packages include some combination of these various types. To help businesses understand the various uses of these key types of economic incentives, as well as the timing of the benefits received, Site Selection Group evaluated several recent site selection projects across various industries.
Discretionary economic incentives remain most prevalent incentive type offered
The site selection projects listed below were offered the following combination of economic incentive types. Furthermore, we have broken down the various incentive types by general program categories.
As revealed by the projects above, many states are moving toward the use of discretionary incentives over statutory incentives. In general, the economic incentive packages represented above reflect mostly discretionary programs that comprise the majority of the overall value. However, this does not imply that discretionary incentives are always more valuable than other incentive types. It simply highlights the need for companies to review state and local economic incentive programs well in advance of any triggering events, which might lead to incentive benefits, such as capital expenditures, job creation, expansions or consolidations.
For additional information, please contact Site Selection Group.
