Archive for the ‘Washington DC’ Category

$2.6 Billion Spent on Cleaning Up DC Rivers Must Address Local Job Creation

June 7, 2013

SinkorSwim_WebBoxOver the next decade, DC Water will use a regressive Impervious Area Charge (IAC) to fund $2.6 billion in needed water infrastructure investments. Middle- and low-income residents and neighborhoods will carry the highest burden of the DC Water fee increase that will pay for these improvements.

Despite the fact that the funding burden of these projects falls heavily on the most vulnerable residents, DC Water has not implemented a local hiring agreement, even though putting residents to work on the project may be the best way to reduce the harm of a regressive fee. These are among the findings of Sink or Swim? Who will pay and who will benefit from DC Water’s $2.6 billion Clean Rivers Project?, a study published this week by Good Jobs First.

More coverage of the report can be found over at the Washington Post and the Washington City Paper’s Housing Complex Blog.

Cities rarely spend so much — $2.6 billion — on infrastructure projects. A strong Community Benefits Agreement could make this public infrastructure investment provide a jobs stimulus benefit to District residents without spending an additional dollar. A proposed Community Benefits Agreement (CBA), like the District’s amended First Source Law, would establish a minimum percentage of work hours that must be performed by District residents, increasing to 50% over the next decade.

The report was commissioned by the Washington Interfaith Network (WIN) and The Laborers’ International Union of North America (LIUNA).

Among the major findings:

  • The impact of the IAC – measured as a share of 2013 property taxes – will be four- to five times greater for homeowners in poor neighborhoods than for those in affluent neighborhoods.
  • Small businesses, especially those east of the river, will feel a heavy burden from IAC fees. Office buildings on K Street will feel little impact.
  • There is no indication that District residents will benefit in proportion to their burden. Contractors on major DC Water projects currently employ more North Carolinians than residents from Wards 7 & 8 combined. Over half the contractor workforce lives outside Washington, D.C. and its immediate surroundings.
  • Continued failure to hire local residents will result in a massive transfer of wealth out of the District. We estimate that over the next thirty years, D.C. ratepayers will be billed $4.2 billion in IACs, including $1.1 billion from Wards 7 and 8 alone.

District residents will pay for these infrastructure investments through a regressive fee for the next thirty years. Low- and middle-income residents will be hit the hardest. These are neighborhoods that have historically been excluded from opportunities in construction careers; to not leverage $2.6 billion in public spending for District construction careers would represent a tremendous missed opportunity.

Posted in Community Benefits Agreements, Economic Recovery, Green Jobs, Jobs, Property Taxes, Smart Growth, Taxes, Washington DC | Leave a Comment »

Subsidies to Campaign Contributors in NC and DC

May 20, 2013

Two recent investigative news reports, one in North Carolina and another in District of Columbia, provide useful examples of how major campaign contributors often end up receiving substantial subsidies or special tax treatment.

Click the image to go to the WAMU website

Click the image to go to the WAMU website

The News & Observer in North Carolina published a series of articles called “Missing Money” that examined the state’s tax subsides. One of the articles looked at ties between lawmakers and subsidy recipients. For example, two large hog and poultry processors each contributed $100,000 to a state senator who introduced a bill making the materials they purchased to build their animal housing exempt from sales taxes. Although the contributions were far in excess of legal limits, the processors were not prosecuted.

WAMU, an NPR affiliate in the District of Columbia, has begun a series of reports called “Deals for Developers.” The “Day 1” part exposes connections between political campaign contributions and subsidies.

The investigation shows that one-third of the $1.7 billion in public money paid out over the last decade has gone to the ten developers who contributed the most to local political campaigns. In total, those who received subsidies contributed more than $2.5 million and received subsidies worth some $641 million.

To avoid the city’s limits on campaign donations, the radio station found that developers contributed money through multiple shell companies as well as their employees and family members. Sadly, only a small fraction of the subsidies, about five percent, went to the neediest neighborhoods in the city. (Make sure to check out the station’s table of campaign contributions and subsidies and an infographic examining the connections.)

These two investigations were possible because of the growing transparency of economic development subsidies. North Carolina has done well on Good Jobs First transparency reports and Washington, DC not too long ago started disclosing its subsides. We hope to see similar investigative reports coming from other parts of the country, but for now we congratulate The News & Observer and WAMU on their exceptional work.

Posted in Campaign contributions, Disclosure, North Carolina, Subsidies, Washington DC | 1 Comment »