2010OFA-0001

January 6, 2010

TO:

 
   

FROM:

Emily Shepard

   

SUBJECT:

Economic Development Expenditure Definitions

   

You asked for economic development expenditures as a percentage of Connecticut's state budget, as compared to other states.

The term “economic development” does not appear to have a consistent and formalized definition. Below are definitions and concepts of economic development, used at the federal and state levels, which may be helpful in formulating the approach for this request.

Example of Federal Approach

The US Census Bureau conducts a survey of state and local government finances, producing expenditure data by function (i. e. education, highways) and by accounting category (i. e. operations, capital). The survey also includes revenue and debt data. Appendix A provides an example of this survey information (the expenditure data is highlighted). The first tab contains state data for 2008, while the second tab contains state and local data for 2007. The third tab contains definitions, which provide detail on what was included in the expenditure data as itemized by function.

Examples of State Approaches

Idaho identifies economic development as a major category of the state budget. The funding in the category is identified as “used to pay for the employees, buildings, technology and vehicles, needed for economic development” in the state. It includes funding from various agencies that promote economic development including the departments of Agriculture, Commerce, Transportation, as well as the Historical Society and the Idaho Commission for Libraries. It also includes agencies that support business regulation, such as the Department of Insurance, and agencies that support employment and rehabilitation services, such as the Department of Labor.

Legislation adopted by Texas in 2001 requires the Comptroller of Public Accounts to report on state expenditures supporting economic development. This information is provided by agencies that are required to link appropriation requests to one of the 14 indicators that benchmark the statewide goal of economic development. Appendix B provides a list of these indicators and additional information on the Texas strategy.

Based on existing definitions and research it appears that although the concept of economic development varies across entities, common themes exist. Economic development relates to an array of functions including, but not limited to, commerce, agriculture, education, labor, and transportation. It may be helpful to review the existing data as reported by the Census as a starting point for further exploration.