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Table of Contents
Executive Summary...........................................................................................................iiiI. Introduction.....................................................................................................................1II. Description of Local Development Incentives............................................................... 3 A. Tax Increment Financing....................................................................................3B. Special Taxing Districts .....................................................................................7C. Property Tax Abatements....................................................................................9D. State Incentives.................................................................................................11III. The Cost of Economic Development Incentives.........................................................13A. Overview...........................................................................................................13B. Tax Increment Financing..................................................................................15C. Transportation Development Districts (Missouri)............................................18D. Special Service Areas (Illinois).........................................................................19E. Business Development Districts (Illinois).........................................................20F. Transparency Issues...........................................................................................20IV. Regional Economic Effects of Development Incentives.............................................23A. Overview...........................................................................................................23B. Development Incentives and Job Creation........................................................24C. Regional Trends in Taxable Sales.....................................................................25D. Distribution of Retail Sales...............................................................................28E. Summary of Economic Impacts........................................................................30V. Policy Considerations for Reform ................................................................................31A. Policy Objectives..............................................................................................31B. Finding Meaning in the “but for” Test..............................................................32C. Defining “Blight”..............................................................................................32D. Balancing Local and Regional Interests............................................................33E. Maximizing Economic Productivity of Incentives............................................33VI. Conclusions and Recommendations............................................................................35A. Conclusions .....................................................................................................35B. Recommendations.............................................................................................36Appendix A: Description of Data Sources.........................................................................39Appendix B: Description of Economic Development Incentives and Definitions............41Section 1: Economic Development Incentive Program Summaries......................41Section 2: Definition of Terms..............................................................................45Appendix C: Municipal Finance Data Collection..............................................................47Appendix D: Disclosure Policies.......................................................................................51
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