Proper evaluation of any program relies on two essential components: clear, relevant, ascertainable data, and internal procedures to assess outcomes and make decisions. The transparency of data and information on economic development incentives varies across metropolitan Chicago. Public agencies collect and publish a significant amount of non-proprietary information regarding incentives, but these data systems are often inadequate to determine an investment’s effectiveness. In particular, disclosure standards can differ by the unit of government and the type of incentive, leaving information too fragmented or inconsistent to determine the total incentives going to a project. Regularly evaluating and publishing incentive data allows communities to make prioritized investments in their economic growth and long-term sustainability. Rather than extending incentives into perpetuity, the State of Illinois and local governments should pursue performance-based approaches to make decisions that extend, improve, or terminate incentives based on rigorous analysis. Such analysis should account for the incentive’s full costs and benefits, progress in achieving its public purpose, and trade-offs relative to other government activities. This strategy also appears in the Governance chapter, under the recommendation to Base investment decisions on data and performance.

Action 1

Require a regular audit of all tax abatements, diversions, and credits for economic development.

Implementers

State of Illinois and local governments

Action 2

Implement and maintain sunset provisions on all tax abatements, diversions, and credits for economic development, allowing periodic reevaluation.

Implementers

State of Illinois and local governments

Action 3

Make comprehensive data on incentives for economic development available and ensure that relevant, accurate, non-proprietary data can be reliably located, integrated, and analyzed.

Implementers

State of Illinois and local governments