Several years ago Ada residents agreed to a half-cent sales tax increase, one quarter cent of which goes toward improving city infrastructure, called Proposition 1. The other one quarter cent, called Proposition 2, goes toward economic development. From our perspective, these propositions have been wonderful successes.

Roads and other infrastructure improvements are making this a better place to live, work and play. Because roads get better, or water pressure intensifies, or drains flow more easily, nearly everyone understands what it means to improve a city’s infrastructure, and therefore what Prop 1 funds have been used for.

This is not always true with Prop 2, or economic development funds because there is sometimes confusion as to what constitutes economic development.

Some have wondered if money generated from Prop 2 goes toward enticing retail stores or restaurants to build here. Upon learning Prop 2 funds are never used for this purpose, some wonder why not.

It’s a fair question. Here’s the answer: Retail stores and restaurants are great businesses, the more the merrier. But jobs created by their opening, by necessity, depend on companies that manufacture a product to keep them in business.

Imagine a scenario in which a small town has one large manufacturing plant that employs half of the town’s workers, and one large retail store that employs the other half. If the retail store pulled out, the manufacturer and the town could still exist. But if the manufacturer shut down it would signal the death of the manufacturer, the retail store and the town. Without the payroll generated by the manufacturer, there is no reason to have the retail store.

The good news is, when Prop 2 money is expended to bring in a non-retail businesses, retail stores (and restaurants) inevitably follow. Employing your tax money to woo retail stores would be getting the cart before the horse.

Non-retail entities provide the power – to be eventually followed by the figurative cart filled with retail entities.

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