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This appendix includes a detailed description and data source information for this asset class.

Class Definitions
Metrics
Data Sources Links to Data

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Legal and Regulatory Environment Asset Description

The legal and regulatory environment plays an important role in the success of innovation based economic development. The relative importance of taxes and regulations among other regional factors, such as availability of skilled workforce, is frequently overstated. Nevertheless, regional tax and regulatory burdens—real or perceived—can affect the location and resource allocation decisions of companies and should be accounted for in regional economic analysis.

Legal and Regulatory Environment Metrics

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Tax Burdens

Tax codes vary significantly across municipalities in a region. As a result, local sources are usually best suited for explaining a region’s efforts toward making its tax code supportive to business. Several sources are available for comparing tax rate data at the national level. Economy.com offers several fee-based sources for information on business costs that include state and local tax data, such as its annual North American Business Cost Review. Reports can be found on the Economy.com web site (www.economy.com). The Tax Foundation (www.taxfoundation.org) is another source for information on state tax and regulation systems. Its annual State Business Tax Climate Index provides data on individual income tax, fiscal balance, tax base conformity, sales and gross receipts tax, and corporate income tax. Data should be presented in a way that illustrates comparisons among peer regions, according to location, population, or some other criterion.

Cost of Doing Business

Cost-of-doing-business data can be found in publicly available and private sources. Several magazines, such as Forbes, publish annual rankings that compare metropolitan areas based on various cost-of-doing-business indicators (www.forbes.com/lists). Several private economic consulting firms such as Economy.com (www.economy.com) also offer cost-of-doing-business data. Economy.com’s Precis Metro Reports, for example, include a yearly measure of the cost of doing business at the MSA and state levels. The index weights factors such as tax burdens, labor costs, and energy costs.

Survey questions include:

  • Cost of doing business in the surveyed firm’s region (specifically, the cost of real estate, wages and salaries, and utilities) 

  • Region’s cost of living for the surveyed firm’s employees 

  • State and local governmental regulations and permitting procedures affecting businesses 

  • Level of taxation affecting business (relative to other regions)

 

Links to Data: View suggested Legal and Regulatory Environment public sources in the table below.

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Evaluation Areas Data Source Website
Tax Burdens Moody’s Economy.com http://www.economy.com
Tax Burdens The Tax Foundation http://www.taxfoundation.org
Business Costs Moody’s Economy.com Précis Metro Reports http://www.economy.com
Business Costs Forbes rankings http://www.forbes.com/lists
Government Programs Web sites of relevant government entities

The following data sources and evaluation criteria are all related to connective organizations.

Taxes

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Data Evaluation Criteria
Federal, state, local, and regional tax rates potentially impacting regional businesses Effective tax rates for region (vs. competitor regions)
Available tax credits/tax incentive programs Amount provided in tax incentive programs

Overall business satisfaction with business environment (via survey)

Scores on 'Ease of Doing Business' indices

Wage Structure

Data Evaluation Criteria
Breakdown of region’s skilled worker categories Wage rates for relevant skilled labor categories in region (vs. competitor regions)

Utilities

Data Evaluation Criteria
Names, contact information and service areas for major suppliers of water, gas, electricity Average gas, electric and water rates in region (vs. competitor regions)

Local Government

Data Evaluation Criteria
Names and contact information for local officeholders Amount of funding for relevant activities, satisfaction with government services and programs
Nature of relationship to/jurisdiction over regional assets Amount of funding for relevant activities, satisfaction with government services and programs
Key development-related programs Amount of funding for relevant activities, satisfaction with government services and programs

State Government

Data Evaluation Criteria
Names and contact information for state officeholders Amount of funding for relevant activities, satisfaction with government services and programs
Nature of relationship to/jurisdiction over regional assets Amount of funding for relevant activities, satisfaction with government services and programs
Key development-related programs Amount of funding for relevant activities, satisfaction with government services and programs

Federal Government

Data Evaluation Criteria
Names and contact information for elected officials representing region Amount of funding for relevant activities, satisfaction with government services and programs
Names and contact information for relevant federal officials in regional offices Amount of funding for relevant activities, satisfaction with government services and programs
Nature of relationship to/jurisdiction over regional assets Amount of funding for relevant activities, satisfaction with government services and programs
Key development-related programs Amount of funding for relevant activities, satisfaction with government services and programs

Legislation/Laws

Data Evaluation Criteria
Pending legislation impacting on assets of/plans for the region Financial impacts
Existing statutes/regulations, on state/local/regional levels, that provide or prevent competitive advantage over other regions and/or support other regional assets Similar legislation/laws in other competitor regions
Department of Labor CareerOneStop is sponsored by the U. S. Department of Labor,
Employment and Training Administration
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