To hear Lavern Squier tell it, Lawrence’s formula for valuing tax breaks for businesses is so 1990.

In the 15 years since Lawrence and Douglas County governments adopted a cost-benefit ratio for assessing the effects of proposed tax abatements, he said, some of the formula’s core assumptions have changed.

And that means some potentially good projects — ones that could generate high-paying jobs, in desired industries and with millions of dollars of new investment — might get shorted because the number-crunching outline is out of date.

“It does need revisiting,” said Squier, president of the Lawrence Chamber of Commerce. “It’s a predisposed bias.”

Squier and other members of the Lawrence-Douglas County Economic Development Board heard several suggestions Monday for boosting the community’s efforts to encourage expansions of current businesses and attract development of new ones.

Adjusting the tax-abatement formula topped the list.

Board members know what effect such number-crunching can have. A relatively low score on the ratio can make or break a deal, whether it’s early on in a business’ site-selection process or advanced all the way to divisive public debate before the Lawrence City Commission.

Charles Jones, chairman of the Douglas County Commission, figures that the review is a good idea.

“We’re a very demanding community in terms of deciding what we want,” said Jones, a member of the board. “To get what we want we’ll have to work harder, so I think it’s fair game.”

The idea of “tweaking” the cost-benefit ratio struck a chord with many on the panel, especially after hearing that a hypothetical business prospect — proposing an investment of $25 million to create 60 new jobs, each paying an average of $60,000 — would create only $2 of benefit for every $1 of cost.

Such a project would score lower than Prosoco Inc.’s expansion at the East Hills Business Park, where an investment of less than $3 million spawned 14 jobs.

Prosoco’s a fine company, said Lynn Parman, the chamber’s vice president for economic development, but the community needs to adjust the formula to better reflect the community’s desires and the market’s realities.

The hypothetical example, she said, would be penalized by the current formula because of one of the program’s core assumptions: that highly skilled, highly paid employees likely would need to be brought into the Lawrence area from elsewhere.

Such relocations cost local governments because of added pressures on schools, roads, law enforcement and other basic services.

“I don’t know that we can make the same assumptions today,” she said, noting that many of the jobs at the new Serologicals Corp. in East Hills were being filled with local hires.

The Policy Research Institute at Kansas University calculates such cost-benefit ratios, using the formula approved by city and county governments. Chamber officials already have discussed the possible review, a process that could take two or three months.

Also Monday, board members discussed other potential methods for boosting economic-development efforts:

• Create a forgivable loan program, making money available to companies looking to expand or relocate into the area. Such loans — $500 to $2,000 per job created — could be forgiven, provided the company lived up to its end of the bargain within five years. Board members agreed to have Parman and RoxAnne Miller, chairwoman of the city-county Eco2 task force, work with representatives of city and county governments to develop a specific proposal for future consideration.
• Identify potential sites for future business parks, and encourage expansion of the existing Douglas County Development Inc., which owns the East Hills Business Park.