Economic Development Now

“Economic Development” is a phrase heard a lot these days. But what does it mean and why is it important?

Let’s start with the latter.

Amherst is mired in a structural budget deficit. That means that we aren’t bringing in enough money to cover the recurring costs of the programs and services that our community values. That is due almost entirely to factors beyond our control. On the expense side, the primary factors are the skyrocketing costs of providing health insurance to our employees, increases in energy prices and inflation. On the revenue side, we are dealing with reductions in the amount of aid we receive from the State, and the constraint of property tax increases being limited to 2½ percent each year.

So the cost of running our Town, schools and libraries is rising, and the money we have to pay for it all just isn’t keeping pace.

We can continue to reduce spending – which means reducing or eliminating programs and services – as we have been doing for the past several years and we will be forced to continue doing for the foreseeable future – and face an Amherst whose quality of life is so changed from what we know and love that we might scarcely recognize it.

Or we can try to raise more money, and minimize those painful cuts.

One way to raise money is to increase property taxes. But that has its own repercussions.

Another way is to pursue economic development. This means identifying and pursuing the kind of new business activity that would be appropriate for Amherst, so that such businesses would be paying taxes to the Town. Those taxes mean we have more money to spend (because “new growth” – such as a new building to house a new business – increases the overall amount of taxes collected) and it means that we need less of the money to come from our property taxes.

Why is reducing our reliance on property taxes important? The obvious reason is that no one wants to pay higher property tax bills. The less obvious reason is that the more expensive our property taxes become, the fewer people of low and moderate incomes can afford to live here.

At its core, Amherst is about its residents. No one wants us to lose the social and cultural diversity that comes from having residents of every economic level. Amherst would not be Amherst if we lost our young families, our new Americans, our seniors on fixed incomes, our regular hard-working folks doing their best to make ends meet. Amherst as a “wealthy enclave” would be an Amherst most of us would not appreciate, and a place we would not want to live, even if we could afford it.

But an Amherst without all the vital and special elements that also define our shared quality of life here – from the most basic services we depend on, like safe streets and secure neighborhoods; to our fine schools and beloved libraries; to our exemplary Senior Center and multi-beneficial Leisure Services department – would also be a less-recognizable, less-desirable Amherst.

Economic development is a step toward avoiding both of the bad options above. Finding appropriate businesses to broaden our tax base, reduce our property tax burden and help us to maintain what we most value just makes sense.

It is not a short-term fix. The benefits of economic development do not occur overnight, but rather, they accrue over time. Had we started accruing those benefits a few years ago, we wouldn’t be in such a tough situation today – our cuts would be less, and our taxes would be lower. We simply cannot afford to miss the opportunity of future benefit again.

How do we do this? We make economic development a top priority. What does that entail?

We must create and fund an Economic Development Director staff position. A full-time person dedicated to this effort is an investment in our future. We must have an individual actively pursuing appropriate businesses and shepherding them through the process of establishing – and growing – in Amherst. Without such focus, we rely only on luck, and that is an expensive gamble.

We must think creatively about the kinds of businesses that would enhance Amherst. We need to encourage clean, low-impact firms that will bring jobs and tax dollars, without compromising our quality of life.

We must collaborate with the university and colleges to provide the support they need for spin-off businesses. The knowledge and expertise of their faculty and students will launch dozens of firms over the next decade, and we must make Amherst an attractive place to locate those firms.

We must encourage businesses to locate in sensible, appropriate areas. Preserving open space while concentrating development in designated areas (such as our Professional Research Parks, our village centers, and downtown) makes good sense. At last fall’s Town Meeting, we began making incremental zoning changes to facilitate this type of development. We must carefully monitor the performance of these efforts, and continue to move in this direction.

We must nurture our existing business community. Economic development isn’t just about new business – it is also about helping our current businesses to grow and thrive. We must be attentive to their needs and provide an environment that fosters their goals, because that serves our mutual benefit.

Economic development is a process; not a single task, and not a magic bullet. It requires gradual steps on multiple fronts. Some will bear fruit, while others never will, and that is why our efforts must be focused and on-going. It will not solve our financial problems by itself, but it is one of the tools we must use to protect Amherst’s future.

If you share these priorities, I hope you will vote for me on April 1st.