Archive for the ‘1’ Category

OMB Moves to Fix ARRA Snafus

December 22, 2009

Responding to criticisms such as those issued by the Coalition for an Accountable Recovery (CAR) and States for a Transparent and Accountable Recovery (STAR), the Office of Management and Budget (OMB) has revised its guidance that governs how Recovery Act grant and contract recipients report on jobs.

The revisions, consistent with recommendations from CAR and STAR as well as the Government Accountability Office (GAO), are intended to make job-counting less subjective and therefore less prone to errors. In the new guidance, OMB also signals that recipients that continually fail to report will be subject to penalties.

Because many recipients failed to accurately account for created or retained jobs in their October reports, OMB simplified its instructions. The new guidance says: count all work hours funded by Recovery Act dollars, divide those hours by a full-time work schedule for the quarter, and report that number. And don’t try to figure out cumulative jobs.

Although the guidance is likely to correct the most egregious reporting problems on the number of Recovery Act jobs, it fails to address CAR and STAR concerns about job quality and equity issues. Specifically, the coalitions remain on record seeking revisions in the guidance to include:

  • The wages of the jobs and whether they include access to benefits like healthcare.
  • The race, gender and nine-digit residential ZIP code of all workers performing those hours of Recovery Act-funded jobs. This will help determine if those most in need of economic stimulus are receiving their fair share.

The revised guidance also states that Federal agencies can terminate awards and/or revoke a recipient’s ability to receive future funds if a recipient or sub-recipient:

The guidance also warns that failing to submit a report or persistently filing late or negligently shall be treated as a non-compliant recipient subject to Federal action. There were more than 4,000 such cases in the first round alone. Moreover, it states, if a recipient or sub-recipient intentionally reports false information, Federal prosecutors may bring civil and/or criminal proceedings as enabled by ARRA or existing Federal procurement rules.

With clarified reporting rules, the blame for any new egregious errors will clearly rest with recipients, including state governments, not the feds. Effective February 2, corrections can be made continuously, not quarterly, at FederalReporting.gov.

While OMB should be congratulated for clarifying job reporting guidelines, the failure to include metrics on job quality and equity issues remains troubling.

NYC Approves Recovery Zone Bonds for Project that Won’t Aid Recovery

December 16, 2009

The New York City Capital Resource Corporation (CRC) is blurring job numbers on stimulus bond projects again. On December 15, 2009 the CRC’s board voted to issue $19.8 million in tax-free Recovery Zone bonds on behalf of Arthur Management Corp. to finance the construction of a parking facility in the Bronx. The facility will serve St. Barnabas Hospital, which created Arthur Management in order to be eligible for the financing.

CRC staff insisted the new facility will create six permanent jobs. What they didn’t mention was that 28 jobs will be displaced when the old facility is torn down because the new one will rely heavily on automation, allegedly saving the hospital $500,000 a year. Good Jobs New York staff and organizers from the Committee of Interns and Residents (CIR) who testified against the deal questioned the logic of using stimulus bonds intended to “contribute economically to the neighborhoods in which projects are located,” as the city’s own criteria state, for a project that could result in a net loss of 22 jobs.

Even the argument that saving a hospital some money aids recovery doesn’t hold up in light of the millions in bonuses St. Barnabas, despite being in financial straits, recently gave to its top executives. The hospital has also spent hundreds of thousands of dollars–and plans to spend more–attempting to overturn a 1999 National Labor Relations Board decision that cleared the way for resident physicians to legally unionize. In the meantime, the NLRB was obligated to impound secret ballots generated when staff voted earlier this year on whether to unionize, an indication that St. Barnabas’s relationships with unions and its employees is less than the standard New Yorkers should expect from companies seeking public subsidies.

Fur Flies Before Data Release

October 30, 2009

The White House, The Associated Press, the Economic Policy Institute, and the Republican National Committee are going toe-to-toe about the Recovery Act’s impact ahead of the big ARRA jobs numbers which are set to be released this afternoon on www.recovery.gov. The White House has already indicated that it expects the numbers to show that the stimulus created or saved 650,000 jobs. Moreover, the 3.5 percent GDP figure released yesterday suggests that federal initiatives have had a profound effect, but perhaps did not go far enough.

We here at Good Jobs First, ducking the food fight, remind everyone of our observation last week that the jobs numbers are being under-reported. Despite critics’ claims, let’s remember: the numbers released today are from actual recipients of stimulus grants and contracts, not the White House. As of yesterday, the data are “locked” and cannot be changed until the next reporting period. Initial impressions indicate that recipients may have done a poor job reporting job creation and retention, in part at least because recipients lacked clear guidance from the Office of Management and Budget.

When the data do come out, we will offer our own independent analysis.

Standing Strong at the Kingsbridge Armory

September 8, 2009

esnuestroIn a move rarely seen in The Bronx lately, an elected official is standing up for the creation of good jobs and accountable development. Newly elected Bronx Borough President Ruben Diaz Jr. has voted no on a land use proposal to build a subsidized mall inside the Kingsbridge Armory because the developer refused to sign a community benefits agreement.

This must come as a shock to Related Companies, which plans to develop the mall and has gotten subsidies and sweetheart real estate deals from the city in the past. Related was awarded the contract to purchase the armory from the mayoral-controlled Economic Development Corporation for the bargain basement price of $5 million. The armory is a landmarked building that spans an entire city block, has a new roof, and is directly across the street from a subway and bus lines. 

The city seemed to move in the right direction in 2006 by involving community leaders in developing a Request for Proposal and including language that applicants supporting a living wage provision for the permanent jobs associated with the project will be viewed favorably. But after that the community hasn’t been involved.

Diaz’s vote doesn’t mean the proposal can’t happen; the project now moves through the city’s 60-day labyrinthine land-use approval process that includes hearings and votes by the City Planning Commission and the City Council. If other elected officials follow Diaz’s lead, the city could leverage the subsidies to bring Related back to table with the community and still hammer out an agreement.

For nearly a decade the Northwest Bronx Community and Clergy Coalition advocated for community use of the armory. In 2005 the group joined with the Retail, Wholesale, Department Store Union to create the Kingsbridge Armory Redevelopment Alliance (KARA), which called for a project that creates living wage jobs,  promotes retail that doesn’t compete with long-time businesses and builds much-needed community, educational and recreational space for neighborhood youth.

The Borough President’s stance comes not a moment too soon. Unfettered, subsidized development has grown rampant in The Bronx: Gateway Mall (developed by Related) near Yankee Stadium and the Water Filtration Plant have not brought promised jobs, have run far over budget and/or have moved forward in the land use process under the guise of fake Community Benefit Agreements.

Kudos to Diaz for standing up for his constituents and hopefully setting a new standard that won’t allow subsidizing mega developments to come at the expense of locally owned stores and diminished wages, taxes and jobs.

SunCal TIDD Bill Defeated in New Mexico

March 27, 2009

roundhouse2The New Mexico state legislature’s photo finish defeat of Senate Bill 249, a $408 million TIDD bond bill for embattled developer SunCal, sent shock waves through the Roundhouse (home of the state legislature) and the development industry late last week. The bill died on a 33-33 tie vote. A motion to reconsider was also tabled by a tie. We’re told that the outcome was so surprising that one SunCal lobbyist (of 12 registered) gasped upon hearing the final vote.

This year’s version of the TIDD bill attracted extra attention after it was brought to light that SunCal was potentially in violation of state law requiring disclosure of lobbying expenses. Also controversial was the fact that over half of SunCal’s (and its affiliates’ and subsidiaries’) 40 developments are progressing toward bankruptcy as a result of crashing real estate markets and investments made in the company by failed financial giant Lehman Bros.

You can listen to the legislative proceedings and final vote here. One of the main concerns of many legislators was the potential of the proposed massive development to pirate jobs and businesses from other areas in the state. State representatives delivered impassioned arguments against bill on the grounds of tax and budget fairness, fiscal responsibility, protecting education, human-centered development strategies, preventing regional economic distortions and subsidy creep.

Sharon Kayne of New Mexico Voices for Children believes that “it was just a matter of educating the public and legislators of what the very real, very bad consequences could be.” Hopefully it was a lesson not soon forgotten – if history is any indication, SunCal will be back again next year with its hands out at the Roundhouse.

New York Advocates to “Drill Down” on Where Federal Stimulus Money Goes

February 26, 2009

cropped_workinggroup_presser_02_09-26A diverse coalition of two dozen advocates named the “NYS Stimulus Oversight Working Group” and led by Common Cause/New York have signed on to a set of common principles that would make the allocation of funds under the American Recovery and Reinvestment Act fully transparent.

At a press conference this morning on the steps of City Hall in New York City, members of the Working Group and local Council Members agreed that it would take citizens, advocates and elected officials to create a truly transparent process.

Among the recommendations the working group is proposing in the principles is creating a website that has bi-monthly reports, copies of written agreements with contractors, impact on energy efficiency and the environment and details on job creation and wages.

Addressing the desire to learn more about projects in New York State that received stimulus funds, Susan Lerner the Executive Director of Common Cause/New York, said, “New York City must collect all of the information related to the stimulus spending including drilling down” to the subcontractor level.” Advocates on the national level have also expressed this concern.

Several Working Group members also attended: Citizens Union, Environmental Advocates of New York, Good Jobs New York, NYPIRG and the Urban Justice Center.

Also in attendance at today’s press conference were several Council Members: Eric Gioia Chair of the Oversight and Investigations Committee, who recently proposed a form of “Google government” for all city tax exemptions; Gale Brewer, Chair of the Technology in Government Committee; Daniel Garodnick, Chair of the Planning, Dispositions & Concessions Committee and Robert Jackson Chair of the Education Committee.

The transparency issue seems to be taking hold locally as Council Member Bill deBlasio and Council Member Brewer move forward to create a website called SunlightNYC.gov.

Starting Up Stalled State Economies: Experts Give Some Do’s and Don’ts

November 14, 2008

With the election of a new president, officials in many states are hoping a renewed federal/state partnership will jumpstart the troubled economy. Until the new president takes office, however, falling revenues have prompted some states to take actions that are counter-productive rather than counter-cyclical.

States are in a tough spot. For example, Illinois officials predict a revenue hole this fiscal year of $800 million or more. The Center for Budget and Policy Priorities (CBPP) projects state budget shortfalls across the nation will total $100 billion in fiscal year 2010.

Since every state but one must balance its budget, without federal support lawmakers must raise taxes, cut services, or both. (Outright fiscal irresponsibility—e.g., failing to pay Medicaid bills, underfunding state employee pension funds—is another option: Illinois’ unpaid bills could top $5 billion by early 2009.)

New York Governor David Paterson has just proposed school and health care funding cuts of $3.2 billion over two years, similar to those that have already occured in other states. But CBPP economist Nicholas Johnson argues cutting services and income supports makes the economy contract even more as the purchasing power of struggling families falls.

Johnson cites the work of noted economists Joseph Stiglitz and Peter Orzag. They argue tax increases, by reducing savings and not just consumption, are less harmful to a depressed economy, especially when they fall mainly on wealthier taxpayers.

While some states have enacted such tax increases or closed loopholes, others have instead considered tax cuts. Yet tax cuts are the least effective way to stimulate state economies in a recession. They can lead to further spending cuts while reducing the buying power of public employees. Fortunately, voters in several states have recently rejected the tax cut mantra.

States would be better off strengthening consumer demand by extending unemployment insurance, preserving healthcare coverage, preventing foreclosures, and speeding up already scheduled public works projects. The federal government could help by providing grants, paying a larger share of Medicaid costs, and rescinding (or actually funding) burdensome, federally-imposed unfunded mandates that cost states nearly $34 billion in the last fiscal year.

States can help themselves by better tracking, targeting or terminating largely unmonitored business incentives and tax giveaways like Single Sales Factor. They could adopt comprehensive unified economic development budgets (UDB), like the excellent UDB proposed for Kentucky. While more federal support is needed, states can use the recession to make their own economic development spending less wasteful and more productive.

Obama or McCain Better for Cities?

September 22, 2008

Columnist Neal Peirce has a terrific new column out analyzing the urban policy track records and platforms of presidential candidates John McCain and Barack Obama.

An Obama presidency, he concludes, would be likely to bring us “an activist federal government in areas from transit and infrastructure to housing.” For a McCain administration, you have “to be a super-detective to discern any city-metro policy at all.”

Citing a recent debate held in Chicago with proxies for the candidates standing in, Peirce recounts that the Obama spokesman even pledged a new White House Office on Urban Policy to promote cabinet-agency cooperation, while the McCain speaker couldn’t be more specific than bashing taxes and regulation.

Given all the challenges facing metro/urban America today—the yawning infrastructure deficit, the affordable housing crisis, the need for more transit service and the golden opportunity presented by “green jobs” to solve global warming—these issues matter enormously and I highly recommend Neal’s column to everyone who cares about them.

Kansas Auditors Find Inflated Job Claims, Tiny Impact for $1.3 Billion

September 19, 2008

A legislative audit of Kansas’s $1.3 billion in state and local economic development spending finds only a small contribution to state job growth from 2003 through 2007. The audit estimated that the $1.3 billion accounted for just four percent of the state’s job growth, with pre-existing population and employment having a “far larger impact.” It also found no connection between business incentive spending and per capita wage growth.

Like most state performance audits that Good Jobs First once summarized, the Kansas auditors found “junk in” at the Commerce Department, making it hard to avoid “junk out” in the audit. The auditors reported that data was often “unavailable, unreliable, or potentially biased.” For example, they had to rework five years of state commerce agency data that mixed up state, federal, and other sources of money.

As usual, job claims were particularly suspect: combining data from the state’s five development agencies showed 130,000 jobs being created or retained —yet only 43,000 new jobs were reported by the Kansas Department of Labor in the same period! The report attributed this discrepancy to some programs failing to verify if new jobs survive, to double-counting of the same jobs by different programs, and to agencies passively relying on “self-reporting” by subsidized companies.

The audit also noted that subsidies are producing winners and losers within the state. For example, after the opening of the Nebraska Furniture Mart in Wyandotte County, subsidized by municipal STAR bonds, a third of existing furniture stores within a 150-mile radius closed.

Despite their damning findings, the auditors failed to recommend the elimination of any subsidies. They noted that while an extensive literature finds “incentives don’t have a significant impact on economic growth,” states are compelled to offer them since businesses “view them as an entitlement.”

In a remarkably vague defense, the state’s commerce secretary responded to the report by claiming that “The commitment and mechanisms for public and private funding would not exist if there was no perceived value in economic development by the business leaders and the elected officials in local communities. The state senate’s majority leader complained that the audit report “hadn’t resolved the issue of the best way to get the biggest return on the state’s investment.”

Despite the findings, subsidies march on: the state recently enacted a new sales tax break for business machinery that is projected to cost Kansas local governments $404 million a year.