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1 d The Jerry Collins Local Governance Research Laboratory Askew School of Public Administration & Policy Florida State University Tallahassee FL

2 Local Gov. Lab

3 3 Economic Development Incentive Programs in Florida Cities: An Empirical Assessment Prepared for: The Florida League of Cities Symposium 2014 Prepared by: Richard Feiock Kate Wassel and Sunjoo Park Florida State University August 13, 2014, Hollywood, Florida

4 4 Overview Development Policy Targeted to Green Development Green Jobs Part Florida City Development Incentives FLC surveys Future Research Implications for Local Governments

5 5 Research Questions What strategies have Florida cities adopted to attract/retain clean energy-based green jobs in their community? How effective have these local green development efforts been in the post-economic recession era? Do local green development efforts influence clean energy based development at the city level after accounting for federal stimulus efforts, public investment in the economic environment and pre-existing clean energy industry?

6 6 Local Government Clean Energy-Based Economic Development Strategies City overall commitment to sustainability Financial incentives for energy conservation and renewable energy technologies. Regulatory relief for energy conservation and renewable energy technologies.

7 7 U.S. Bureau of Labor Statistics, Green Jobs (2010) Product approach industries which produce green goods and services Process approach industries that use environmentallyfriendly production processes Renewable energy and energy efficiency subcategories isolate the relative effects of local governments efforts. Categories # Industries (6-Digit NAICS) 1. Energy from renewable sources Energy Efficiency Pollution reduction and removal, greenhouse gas reduction, and recycling and reuse Natural resource conservation Environmental compliance, education and training, and public awareness 45 All Green Goods and Services Industries 333

8 8 Employment Trends in Florida, All Businesses vs. Clean Energy-Based Green Businesses Source: 2012 NETS; BLS (2010) Note: Clean Energy Green Jobs is measured by employment in renewable energy and energy efficiency related green businesses, defined by BLS. Self-employed establishment with only one employee is excluded from the data.

9 9 ICLEI-Local Governments for Sustainability and Green Jobs Growth International network of local governments engaged in climate protection, sustainability, and clean energy initiatives. Formally known as International Council for Local Environmental Initiatives Members are required a self-defined commitment to sustainability and climate protection. ICLEI USA provides trainings, technical assistance, guidebooks, and software tools. Guide to Green Job Development (2009): 7-steps, green job definitions, local strategies, and federal and state resources, etc. Source: ICLEI USA Annual Report 2010

10 10 Florida ICLEI Members, 2010 Alachua County, FL Boynton Beach, FL Broward County, FL Coconut Creek, FL Collier County, FL Cutler Bay, FL Davie, FL Delray Beach, FL Fort Lauderdale, FL Gainesville, FL Key West, FL Lake Worth, FL Lee County, FL Leon County, FL Maitland, FL Marathon, FL Miami Gardens, FL Miami, FL Miami-Dade County, FL Monroe County, FL Naples, FL North Miami, FL North Port, FL Orange County, FL Orlando, FL Ormond Beach, FL Palm Bay, FL Palm Beach County, FL Pinecrest, FL Pinellas County, FL Plantation, FL Sarasota County, FL Sarasota, FL Seminole County, FL South Daytona, FL South Miami, FL Tallahassee, FL Tamarac, FL Tampa, FL Venice, FL Volusia County, FL West Palm Beach, FL Source: ICLEI USA Annual Report 2010

11 11 Sustainable Development Strategies in Florida Cities A survey of Florida local governments in early 2010, Energy Sustainable Florida Communities Energy and Climate Policy Energy Cost Reduction by Government Economic Development Land Use and Open Space Transportation Organization and Intergovernmental Relations, etc.

12 12 Clean Energy-Based Economic Development Strategies in Florida Cities Section4. Economic Development: Importance of green business attraction Existence of economic development strategies to attract green businesses: 1) Financial incentives for energy efficient (EE) technologies in new development; 2) Financial incentives for renewable energy (RE) development; 3) Regulatory relief of streamlined processes for energy efficient technologies; and 4) Regulatory relief of streamlined processes for renewable energy development.

13 13 Cities with Clean Energy-Based Economic Development Strategies Of 151, 49 cities have answered to have at least one strategy to support the clean energy development. Strategy Yes Percent Financial Incentives for RE Financial Incentives for EE Regulatory Relief for RE Regulatory Relief for EE

14 14 Research Design: Statistical Model ln y t = β x t-1(2) + θ ln y t-2 + ε Where y is the number of clean energy green jobs in a city, β is a vector of parameters representing the reaction of y (t) in time period t-1, x is a vector of variables thought to influence growth in the state s green jobs, including local government s strategies, ICLEI membership, Recovery Act funds, local expenditure in economic environment, etc., t is the present year and t-1 and t-2 are the prior year and the year before last.

15 15 Research Design 126 Florida cities, with 1,500 population or more OLS regression analysis Dependent: Clean energy green jobs in 2011 Number of employees in energy efficiency and renewable energy industries as of January 2012 (Ln) Subcategory 1 & 2 of BLS definition of Green Jobs: 6-digit NAICS 2012 National Establishment Time-Series (NETS) database 2-Year Lagged Dependent Variable Clean energy green jobs in 2009 (Ln)

16 16 Research Design - continued Independent Variables Local government strategies/tools: Existence of financial incentives and/or regulatory relief For energy efficiency or renewable energy in 2009 Energy Sustainable Florida Communities survey Four dichotomous variables Government commitment to sustainability ICLEI-Local Government for Sustainability membership 1 if either city or county participate in ICLEI membership in Data Source: * Note: Actual amount awarded to secondary recipients in corresponding city

17 17 Research Design - continued Control Variables: Federal assistance for green job creation Recovery Act funds award from DoE Florida as performance state Grants and contracts for Energy Efficient and Renewable Energy Development, including EECBG Award date: $ amount by recipient* location city (Ln) Public investment in economic environment Local government s expenditure (Ln $) in Economic Environment (GE6) Florida Local Comprehensive Annual Financial Report, 2010 Local government s fiscal health in 2010 Measured by (Total Revenue Total Expenditure)/Total Population Data Source: * Note: Actual amount awarded to secondary recipients in corresponding city

18 18 Change in Green Jobs Variables Mean S. D. Clean Energy Green Jobs in ,456 9,616 Clean Energy Green Jobs in ,466 10,897

19 19 Green Development Policy Adoption Local and Federal Strategies Yes No Financial Incentives for EE Financial Incentives for RE Regulatory Relief for EE Regulatory Relief for RE ICLEI Membership (city/county) Receipt of Recovery Act funds from DoE N=126

20 20 Regression Analysis Result Dependent Variable: Clean Energy Green Jobs in 2011 (Ln) Variables Coefficients S. E. p Clean Energy Green Jobs in 2009 (Ln) Financial Incentive for Energy Efficiency Financial Incentive for Renewable Energy Regulatory Relief for Energy Efficiency Regulatory Relief for Renewable Energy ICLEI Membership Federal Assistance for Energy Development ($, Ln) Local Investment in Economic Environment ($, Ln) Local Fiscal Health ($, Ln) (Constant) Observations 126 Adjusted R Square.819 Note: Inclusion/exclusion of ICLEI does not substantially change other local strategy variables significance/direction.

21 21 Results and Conclusion Government s commitment to sustainability is important in green economic development at local level. Green signals to green businesses Strategic and technical support from ICLEI Intergovernmental network/collaboration Strong effects of energy financial incentives Renewable energy and energy efficiency incentives attract new businesses; Regulatory relief has no impact Evidence of job creation effect of federal assistance, ARRA funds, in the short-run Marginal effects of local government s fiscal health and investment in economic environment

22 FLC Surveys of Development Incentives 2011 FLC Survey data Percent of respondents indicating their jurisdiction has the following incentive programs: Incentive Type % With Program None 47.3% Job Incentives 13.8% Expediting Permitting 39.2% Tax Breaks/Incentives 0.0% Utility Related Incentives 9.9% Favorable Land Dev. Regulations 24.7% Other 11.7% 22

23 23 Forms of Government Number of incentive programs by type and form of government, as indicated by respondents. Incentive Form of Government Council/Manager Weak Mayor Strong Mayor Commission Other None Job Incentives Expedited Permitting Tax Breaks/Incentives Utility Related Incentives Favorable Land Dev. Regulations Other

24 24 Incentives by Population Reported incentive programs by population ranges. Incentive Population Ranges 0-5,000 5,001-15,000 15,001-30,000 30, , , , ,001+ None Job Incentives Expedited Permitting Tax Breaks/Incentives Utility Related Incentives Favorable Land Dev. Regulations Other

25 25 Incentives by FLC Region Reported incentive programs by FLC Region. Incentives FLC Region East Central North Central North East North West South Central South East South West Tampa Bay None Job Incentives Expedited Permitting Tax Breaks/Incentives Utility Related Incentives Favorable Land Dev. Regulations Other

26 26 Short Term Agenda for FLC Survey Patterns of Incentive Adoption GIS Analysis Relationships among various incentives Statistical Models to Predict Incentive Adoption City level innovation of policy diffusion Test whether economic need spurs development incentives

27 27 Long Term Agenda for FLC Survey Assessment of Development Impacts In a couple years NETS data will be available to examine the influence city development incentives on new establishments and jobs Research Questions How effective have these development efforts in attacting new development? What industry sectors are most influenced by city development incentives

28 d The Jerry Collins Local Governance Research Laboratory Askew School of Public Administration & Policy Florida State University Tallahassee FL