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An Examination of the Effect of Taxation As An Incentive in Revitalizing Urban Local Economic Development in Elizabeth, New Jersey

PFM, Vol. 3 No. 3, (2003)

This paper examines the relationship between business climate (tax
incentives) and economic development in Elizabeth, New Jersey. Its purpose
is to understand how the city uses taxation as an incentive in its local
economic development policy to revitalize the city and to explore the policy
implications for urban revitalization. The research consists of two parts: (1)
analyses of qualitative data on business climate and (2) a face to face
interview with the mayor. The findings have important policy implications
because they provide evidence to support the bureaucratic decisions to
pursue tax policies in economic development planning. The findings,
consistent with prior research, suggest that (1) people, not jobs, are the
driving force in economic development, and (2) economic revitalization may
be less a function of the level of taxes in place and more a function of the
proper mix of taxes and their relationship to economic development.

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