NoMa Reinvestment Act’s Ends Don’t Justify the Meansby Kwame Boadi | November 3rd, 2011 | PDF of this report
The NoMa Reinvestment Act, now before the DC Council, is intended to support parks and green space in NoMa – a reasonable goal – but the financing plan for this $51.5 million legislation raises three serious concerns:
1) DC tax revenues would be dedicated to this new purpose, but the legislation has been designed to make it appear that there would be no impact on DC’s future finances.
2) A substantial amount of public money would go to a private organization to carry out a primarily public responsibility.
3) There would be very little accountability for how funds are spent.
Hiding the Costs
The NoMa Reinvestment Act would take a portion of property tax, sales tax, and deed and recordation taxes collected within NoMa that that would otherwise go to the District’s general fund and instead put them in a special fund for NoMa parks. When the legislation was introduced earlier this year, the CFO confirmed that it would cost tens of millions of dollars.
The bill was then revised to make the official costs disappear. The bill would do so by taking the mentioned revenue sources in future years to the extent that they exceed current projections and place them in the NoMa parks fund. Yet because NoMa is a rapidly developing area, it is likely that current projections are cautious and will be exceeded. The revised bill also would result in costs occurring outside the four-year window that DC uses to measure the fiscal impact of legislation. This forces the CFO to report that the official impact on DC’s finances is zero, even though this is merely an illusion. Spending $51.5 million on parks will of course have an impact on DC’s finances.
Public Money to a Private Organization
The NoMa Reinvestment Act would establish a troubling precedent of turning over public funds to a private organization that would then spend them for a public purpose. The NoMa Business Improvement District, a private nonprofit, would control the money in the new fund. An advisory board would review proposals, but three of the seven board members would be appointed by the NoMa BID.
It is unclear why public functions, related to creating green space and promoting economic development, would be delegated to a private organization, rather than being controlled by the Department of Parks and Recreation and the Deputy Mayor for Planning and Economic Development, which look at the city’s needs holistically and develop budgets to meet these needs throughout the city.
Little Accountability for Use of Public Funds
The board created by the legislation would need to give only three business days notice in advance of a meeting to determine how to allocate the funds. Furthermore, once the board has made a decision the DC Council would have only ten days to review the proposal. If the Council failed to act within those ten days, then the decision of the board would be deemed approved.
Development Done Right
The addition of parks and green space in NoMa would financially benefit all businesses in NoMa and would help the area attract more residents. It is reasonable to ask those businesses to take the lead in generating funding for NoMa parks, such as through a special assessment. Any public funding for NoMa parks should come through the Deputy Mayor for Planning and Economic Development and the Department of Parks and Recreation, to the extent that NoMa fits into citywide priorities for these agencies.