Expanding the economic activity within a community is one of the primary goals of every elected body, community Chamber of Commerce, Economic Development Corp., and business professional.
The stronger and more diverse the economy, the stronger the community becomes. Over time, a strong economy becomes a self-sustaining engine of growth that can help bolster property values and add “curb appeal” to an entire region.
Diversification Leads to More Investment
Communities that rely on only one or two industries are vulnerable to economic downturns. If one of these industries goes down, it can devastate an entire community.
Consequently, these cities are less appealing for new businesses seeking to open their doors. Industrial diversification provides protection against complete collapse. This also helps protect the tax base, which means that the community’s civic services such as police, schools, fire departments, etc. don’t have to curtail service or offerings. This provides stability that helps communities attract both residents and entrepreneurs eager to see the community grow stronger.
Effective diversification requires having a balanced mix of small, medium, and large sized businesses. It also means strategically attracting businesses that not only meet the needs of today’s economy, but are anticipating the needs of the economy in the future. Thus, it’s important to continually adjust strategy so that the economy grows in a healthy and solid direction not only today, but 5, 10, 20 years down the road.
“Expanding the Tax Base” Doesn’t Mean “Higher Taxes”
A diversified economy is critical for sustainability. When business diversification is successful, it not only creates a hedge from downturns in specific markets, but it also allows a community to continue to be economically successful and expand the local tax base.
It’s a common misconception that expanding the tax base is a code phrase for raising taxes. Quite the opposite is true. When a tax base expands, it means that businesses and members within the community share in the costs associated with running the community.
The larger the tax base grows as a result of increased sales, the smaller the individual’s share of the tax burden becomes. This leaves more money in the pockets of community residents and business owners. As a result families, individuals and businesses are able to purchase more goods and services that sustain the community and give it a solid, and steady rate of growth.
Marketing is Essential
Businesses don’t always know where to set up their operations. However, they do have key criteria that communities must meet before they will be willing to open their doors. These elements include:
- An educated population that can provide a stable supply of labor
- A low tax rate that won’t hinder growth
- An attractive community where employees will feel welcome and comfortable
- Reliable infrastructure including transportation and communication networks
- A positive, vibrant, and supportive business community
Of course, it’s necessary to let businesses know these elements exist within the community.
The best way to do this is to compile the information and tailor it so that it speaks directly to the businesses a community wishes to attract. As the information spreads and is shared, inquiries begin to roll in. As this happens, it’s up to the members of the Chamber of Commerce and Amarillo Economic Development Corporation to bring business into the community by providing the information and incentives that businesses require.
We invite you to contact AEDC to learn more about the ways we are working to expand the tax base within our region.