Think About a Unified Development Budget

Most state and local governments grossly under-estimate how much they spend on economic development. Many just count the direct budget dollars that go to their economic development department. There is more to it, and a unified development budget is a strategy for identifying these expenditures in a comprehensive sense.

The Unified Development Budget (UDB) is an annual statement to a legislature or city council with all forms of spending itemized in one place. All tax credits (such as those for investment, job creation, enterprise zones or research and development), all tax exemptions (such as sales and utility tax breaks) and all appropriated spending (such as training, manufacturing extension services, loans and loan guarantees). A unified development budget can also include the development-related portions of infrastructure, recreation and education budgets. With this system, policymakers can see the state's true spending priorities and trends.

This is a worthwhile strategy for adoption if your area really wants to make its ED programs more performance-based and accountable. While a relatively new concept, I think more local and state governments will find the idea appealing, especially in these tight economic and budget times.

Any area using this approach? Texas is for one. Go here to read about the budget enacted in 2001.

Other sources:

1. Texas state statutes for its unified development budget.

2. 2000-2002 Texas ED expenditures budget report.