Evaluating the STAR Bonds Financing Program [October 2024]

The STAR bonds program allows local governments to use future sales tax revenue for development or redevelopment projects. Commerce officials expect STAR bond districts to improve local quality of life, but they haven’t defined or measured this. We gathered the data to evaluate districts' affects on local quality of life and found that the 6 districts we reviewed grew in quality-of-life industries survey respondents said they value. However, the numbers and types of industries varied by district. To evaluate the program’s effects, we first determined how 6 districts changed over time in 109 quality-of-life industries. We then compared the 6 districts’ industry changes in these 109 quality-of-life industries to what college graduates told us affected their quality of life. Survey respondents said social and economic factors other than amenities have more influence on where they want to live. However, about half of respondents or more said amenities in all 10 quality-of-life industry groups we asked them about were important to their quality of life. All 6 districts we reviewed added jobs in quality-of-life industries from the time the district was approved to 2023. The 6 districts grew most often in industries that most survey respondents (81%-85%) said were important to their quality of life. They grew similarly in industries that only about half of respondents said were important. However, the 6 districts grew in few of the industries that the largest percentages of survey respondents (86%+) said were important. Finally, they grew very little in a few industries that most respondents (68%-80%) said were important. The 6 districts varied widely in the numbers and types of industries with job density growth. We don’t know for sure how the STAR bonds program affected these districts, but the infrastructure it financed likely contributed to the patterns we observed.