WALLER COUNTY, Texas — Quality economic development is essential to fund services needed by a growing population, including road maintenance and infrastructure improvements, while providing jobs that allow residents to work close to home rather than commute to Houston, according to Waller County Economic Development Partnership Executive Director Vince Yokom.
The Waller County Economic Development Partnership serves communities throughout the county including Hempstead, Prairie View, Waller, Pattison and other growing Texas communities in the Greater Houston including portions of the City of Katy which are in Waller County.
Yokom has published two public service articles explaining the need for quality economic development and job creation in the region.
Economic development serves as the foundation for sustainable communities, requiring both strong capital investment and quality employment opportunities, Yokom said.
In the announcements, Yokom outlined the two essential components of building local economies: capital investment in physical improvements and investments that add taxable value to communities.
Two key components drive economic growth
"We can all agree that a good quality of life starts with a good job," Yokom said. "More jobs in the community means more opportunity for citizens to work locally."
Yokom said working locally reduces commute times and fuel costs while enhancing quality of life. He emphasized that a strong tax base and quality jobs are the building blocks of sustainable communities throughout Texas.
Investment sustains communities, prevents decline
The executive director pointed to ghost towns as examples of what happens when economic development and business growth fail, noting that jobs leave, people follow and communities decline.
"Sustainable communities, by contrast, invest in their future by using economic development," Yokom said. "Adding new value and jobs sustains a community. If investment leaves, then the community declines."
Strong tax base reduces residential burden
Yokom said a robust industrial tax base not only provides tax revenue and employment opportunities but also helps reduce the burden on residential property taxpayers in Waller County.
Economic development program gives local control
He said having an economic development program gives local government influence when prospective companies and businesses evaluate communities for investment, allowing officials to either guide growth or lose opportunities to neighboring areas in the Houston region.
Two main types of economic development organizations in Texas
Yokom explained there are two main ways Texas communities can structure their economic development organizations: sales tax-funded or public-private partnerships.
How sales tax funds economic development
Under Texas law, cities, counties and special districts can collect a portion of sales tax specifically for economic development and business recruitment. Cities typically collect between a quarter cent and two cents per dollar of sales tax for this purpose, Yokom said.
When you buy lunch in Waller or shop in Hempstead, for example, a small portion of that sales tax goes back to the city for economic development, he said.
Type A and Type B corporations explained
These sales tax-funded organizations are called economic development corporations and come in two varieties: Type A and Type B, Yokom said.
"Generally, 4B's have broader powers to do things like infrastructure and beautification," Yokom said. "They are required to have a board of directors, like any other corporation, and usually fall under the city administration to some extent. Like a governmental group, their meetings are open to the public."
Public-private partnerships offer flexibility
Communities that don't collect sales tax for economic development, or choose not to, can instead use a public-private partnership model, Yokom said.
Fort Bend, Brazoria and Waller counties use this approach for business development, he said. These organizations take various forms but typically have some type of corporate structure.
Waller County uses public-private model
The Waller County Economic Development Partnership operates through a contract with the county rather than through sales tax funding, Yokom said. Private funding from member organizations helps support business recruitment and economic growth operations without using tax revenue.
"The great thing about a public-private partnership EDO, is that you can use private dollars for a public good," Yokom said.
A board of directors and a contract with local government define what each public-private organization can do, Yokom said. This model allows for broader community involvement and gives the organization more flexibility in its activities than a government-run entity would have.
Yokom concluded his remarks with a quote from Irish politician and philosopher Edmund Burke: "We must all obey the great law of change. It is the strongest law in nature."
For questions or feedback about economic development in Waller County, contact Yokom at vvyokom@wallercounty.org.
The full text of his two public service announcements are below.
WCEDP
Part 1: The Basics
By: Vince Yokom, EDFP, CEcDExecutive DirectorWaller County Economic Development Partnership
To build a framework, let’s look at some associations. First, you have residential development. Those involved in this build homes and subdivisions. Secondly, you have commercial development. Those in this industry build commercial structures and perhaps industrial parks. So, likewise, economic development is building economies. In a nutshell, that’s it. Simple enough, right? But there is a little more to the story.
In general, there are two parts to developing economies. First is the capital investment that builds the tax base. Companies invest in the community by adding taxable value. Most often it’s in the form of real property improvements, like buildings, and, for businesses, it also includes equipment and may include inventories. This value translates into tax revenue, which, in turn, help pay for services and infrastructure throughout the community. No investment. No taxable value. No revenue to help provide services or infrastructure. Taxable value and services are interconnected.
Secondly, you have jobs. We can debate about what makes a good quality of life. However, I think we can all agree that a good quality of life starts with a good job. More jobs in the community means more opportunity for citizens to work locally if they so choose. Working locally also enhances the quality of life because you don’t have to spend hours in a car going to and from work. I think we can also agree our lives would be better without traffic too! Given a competitive salary to work locally, you automatically save money on fuel and it enhances the quality of your life.
These two key components, a strong tax base and quality jobs, are the building blocks of a sustainable community. We have all seen ghost towns. The jobs have left, the people have left and the community is in a state of decline. Sustainable communities, by contrast, invest in their future by using economic development. Adding new value and jobs sustains a community. If investment leaves, then the community declines. Economic development is a way to keep communities strong.
In addition, a strong industrial tax base not only provides tax revenue and jobs, but can also help reduce the tax burden on citizens. This may not always be true in growing communities, but just imagine what your tax bill would be if there were no larger industrial tax payers offsetting the residential contribution to the overall budget.
Finally, having an economic development program gives local government a seat at the table when prospective companies are looking at your community. We can either plan to guide the growth to the greatest extent possible, or we can let it happen to us. In the words of Edmund Burke:
“We must all obey the great law of change. It is the strongest law in nature.” Edmond Burke
Change will eventually happen. The only question is whether or not we, as a community, will have a hand in it.
Stay tuned for the next part in this series on economic development. If you have any questions or feedback, please feel free to email me at vyokom@wallercounty.org.
About the Waller County Economic Development Partnership (WCEDP): The WCEDP is a Texas non-profit corporation with an IRS 501 (C) 6 tax designation. We are non-political and are contracted to perform economic development services to Waller County. To learn more, visit www.wallercounty.org.
Part 2: EDO Structures
By: Vince Yokom, EDFP, CEcDExecutive DirectorWaller County Economic Development Partnership
If you read the first article, you learned that economic development is used to create sustainable communities. Economic development builds economies. In this article we are going to look at the two main structures of an economic development organization (EDO). Although there are variations on this, the two main types of EDOs are sales tax based and public private partnerships.
In the State of Texas, cities, special districts, and counties are allowed to collect a portion of sales tax to help fund economic development activities. A part of that funding goes to run an EDO. For sales tax based EDOs, the process is administered by the State Comptroller’s office. The amount of sales tax varies but a city will usually collect anywhere from a quarter cent to two cents of the sales tax generated within their city. This is why retail is so important to local municipalities and those special districts using sales tax for economic development.
A portion of that lunch you ate yesterday in Waller, for example, goes back to the city. Sales tax based EDOs are referred to as either a 4A or 4B economic development corporation. The scope is slightly different between the two. Generally, 4B’s have broader powers to do thinks like infrastructure and beautification. They are required to have a board of directors, like any other corporation, and usually fall under the city administration to some extent. Like a governmental group, their meetings are open to the public.
The public-private version is a product of how a community chooses to practice economic development if they can’t, or don’t want to collect sales tax to fund an EDO. For example, this type of EDO is used in Ft. Bend, Brazoria, and Waller County. They can take many forms, but most always have some type of corporate structure.
Here in Waller County, the WCEDP has a contractual relationship with the county and is not funded through sales tax. The WCEDP is a community-based organization that also has partner members to help finance operations. It is not a volunteer organization. With this structure, private funding helps to benefit the local community without using sales tax revenue.
“The great thing about a public-private partnership EDO, is that you can use private dollars for a public good.”
Generally, a board of directors, and the contractual relationship with the local government, defines the scope of each public-private organization. Having a public-private EDO offers wider latitude for EDO activities. In the case of the WCEDP, it allows for a broad base of local involvement and public representation.
Stay tuned for the next part in this series on economic development. If you have any questions or feedback, please feel free to email me at vyokom@wallercounty.org.
About the Waller County Economic Development Partnership (WCEDP): The WCEDP is a Texas non-profit corporation with an IRS 501 (C) 6 tax designation. We are non-political and are contracted to perform economic development services to Waller County. To learn more, visit www.wallercounty.org.