The Sacramento Plan for Attracting High-Wage Jobs to the Region

The Sacramento Plan for Attracting High-Wage Jobs to the Region

May 21, 2018 | By The Railyards


When big corporations look for new headquarters and places to expand, Sacramento wants to be at the top of their lists. And the City has a concrete plan in place to make that happen.

Sacramento’s Job Growth and Employment Incentive Strategy sets forth a framework for enticing companies with high-wage jobs that will also provide significant quality of life benefits and revenues for the City. The incentive was passed by the city council in October of 2017.

“Sacramento is committed to putting real incentives forward to attract more high wage jobs and industries to our city,” said Mayor Darrell Steinberg. “This push is another signal to the clean, great high-wage industries of our state and country that Sacramento is the place to be.”

A City of Sacramento press release stated: “The Job Growth strategy sets Sacramento up for success as bids are made in today’s highly competitive job creation market. To help Sacramento rise to the top of the list, strategic incentives could be offered to companies that would make a significant economic impact in the region and bring in a minimum of 500 high-quality jobs.

For example, if 500 new jobs are added to Sacramento in the professional and business services sector, the ripple effect is an additional 600 indirect and induced jobs and nearly $76.5 million in labor income generated in the region.”

What brings a large corporation to a city?

When a large corporation seeks a new site for expansion or relocation, site consultants and corporations often seek innovative incentives as part of their decision-making process. In order for Sacramento to attract new business to the region, an innovative incentive program is needed to remain competitive.

How does this strategy support job growth in Sacramento?

The Job Growth and Employment Incentive Strategy provides a framework that will guide the City’s approach in pursuing these employment opportunities and the corporations that can help build and grow an innovative, robust, and well-connected ecosystem in the region.

The strategy underscores the City’s commitment to corporate recruitment efforts that bring large numbers of high-wage jobs to the City, diversify the City’s economic base, provide employment opportunities to underserved populations, and provide broad public benefits that enhance the quality of life and environment within the City.

Which businesses will qualify for incentives?

Under the strategy, the City could consider offering an incentive to attract businesses that have a significant economic impact and meet specific employment and tax revenue generation criteria:

  1. Employment: Create a minimum of 500 new high-wage full-time jobs, with defined salary ranges based on Sacramento area and industry income standards. Agreements may include special considerations for employers hiring employees who meet specific socioeconomic criteria. Jobs relocated from within the Sacramento six-county region (El Dorado, Placer, Sacramento, Sutter, Yolo, and Yuba) are not eligible.
  2. Tax Revenue Generation: Provide significant property and/or sales tax revenues to the City. This amount will take into consideration the relative size of the business and its contribution to the City and community

Any investment considered by the City must also address an array of issues to improve Sacramento’s quality of life, such as housing affordability, workforce development, employment for disadvantaged populations, clean energy, and youth and education.

How does the incentive strategy work?

Often, opportunities present themselves through formal or informal Request for Proposal (RFP) processes. The deadline for these RFPs can be short and don’t always allow time for the City Council’s approval. The Job Growth and Employment Incentive Strategy provides the City Manager with authority to respond to RPFs within the guidelines and subject to City Council approval at a later date to avoid missed opportunities.

Where will the funds come from?

Incentives will be structured and negotiated on a case-by-case basis. When structuring an incentive, the City will consider all appropriate mechanisms for funding, such as consideration of net-new City tax revenue that would result from the business; cooperation from other public agency partners, including but not limited to the State of California and County of Sacramento, when appropriate. The City Council must approve any incentive of $100,000 or more.

The incentive guidelines ensure use of funds results in:

  1. Creation of High-Wage Jobs: Businesses must directly create quantifiable permanent, high-wage private-sector jobs and employment opportunities for disadvantaged populations.
  2. Sustainable and Desirable Job Growth and Economic Development: Incentive funds must help to further develop and/or grow targeted industry clusters and geographic areas.
  3. Increased Revenue and other Public Benefit to the City: Incentive funds must directly or indirectly increase City revenue and/or generate other significant public benefits that provide a return on investment to the City.

Demonstrating a Commitment to Growth

Sacramento’s economy is already flourishing and drawing the attention of large companies. In order to be considered as a viable business location and attract new high-wage private sector jobs to the community, however, Sacramento must be willing to consider a deliberate shift towards new approaches that demonstrate its commitment and emphasize its competitiveness.

The Job Growth and Employment Incentive Strategy is just one more action that shows that the City is serious about bringing in more high-wage jobs and industries to the region.

“The City of Sacramento is demonstrating what a successful city should put forward in order to attract high wage employers,” said Greater Sacramento Economic Council CEO Barry Broome. “This investment helps the community understand the value proposition and the economic benefit these types of jobs can bring to a city. This is a best practice policy that will help the future of Sacramento; other communities in our region should follow their lead.”

Image courtesy of Coruscating Images.

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