As states battle to retain and attract jobs, businesses, and investment in an increasingly competitive environment, deal closing funds — pools of discretionary cash grants and tax credits often controlled by a governor — have become popular incentive tools to attract highly-sought-after corporate relocation and expansion projects.
The nation's prolonged economic recession and slow recovery have altered the competitive landscape for state governments and businesses. Tight credit markets and anemic economic growth have reduced the number of businesses embarking on expansion projects. At the same time that many businesses have struggled with economic uncertainty that has curtailed hiring and investment, the vast majority of states have experienced mounting budget deficits and dwindling revenues that have resulted in steep reductions in government spending.
With fewer job creation projects and stubbornly high unemployment rates, an increasing number of states have overhauled their economic development incentive programs to improve their competitiveness. While deal closing funds have long been popular economic development tools in larger states with well funded business development programs, such as Florida and Texas, an increasing number of states (see map below) have recently adopted or explored the feasibility of offering... Read More in attached PDF
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