Testimony of Lindsay Clark, Policy Analyst, DC Fiscal Policy Institute, For the Public Hearing on Bill 17-0503: Compliance and Enforcement Agency Establishment Act of 2007 District of Columbia Committee on Economic Development| December 10th, 2007 |
Chairperson Brown and members of the Committee, thank you for the opportunity to submit testimony. My name is Lindsay Clark, and I am a policy analyst with the DC Fiscal Policy Institute. DCFPI engages in research and public education on the fiscal and economic health of the District of Columbia, with a particular emphasis on policies that affect low- and moderate-income residents.
Bill 17-0503 seeks to establish an agency within the Office of the Deputy Mayor for Planning and Economic Development charged with monitoring and enforcing the requirements set forth for recipients of economic development subsidies. DCFPI supports the intent of the bill which seeks to establish a mechanism for collecting and disseminating information on the compliance and enforcement of economic development incentive agreements. This is greatly needed. Currently, information on the amount and type of economic development subsidies provided by the District, the obligations associated with those projects, and whether or not those obligations have been met are not easily accessible; yet the District spends hundreds of millions of dollars annually in TIFs, tax abatements, direct payments and other forms of subsidies to encourage economic development.
This lack of transparency makes it very difficult to assess the District’s overall rate of return on its investments in these projects, e.g. how many and what types of jobs have been created for DC residents? Are these jobs paying a living wage? Do they provide benefits? More needs to be done in this regard, and this bill is an important first towards this end. We suggest the following modifications to this bill in regards to the scope of what is subject to compliance monitoring and enforcement, the types of information collected, and the dissemination of this information:
- Expand the bill to include all projects that receive economic development subsidies. Currently, this bill covers only those agreements involving public land. However, the District spends millions of dollars annually in tax abatements, TIFs, and other forms of economic development subsidies that involve both public and private land; therefore we recommend the same compliance monitoring and enforcement requirements apply to all projects receiving subsidies.
- Include First Source hiring and Living Wage agreements as part of the reporting requirements. The number of good paying jobs created for DC residents is a critical outcome of investing economic development dollars. The District requires all projects receiving subsidies hire DC residents first, and in 2006, Council adopted a living wage requirement for projects receiving TIF subsidies of $100,000 or more. Compliance with these provisions should also be monitored and enforced.
- Require information on jobs included in subsidy applications. We recommend that an application for any economic development subsidy above a specified size should include information on the number of jobs that will be created, delineated into construction phase and permanent jobs.
- Annual reporting on jobs. We recommend that subsidy recipients report their compliance with job, wage, health care, job training, financing and other obligations on the project.
- Create an online database that is searchable by program and project. Publicly disclosing information on economic development subsidies allows residents to track where taxpayer dollars are being spent and what benefits they are receiving in return. Currently 23 states provide some level of company specific-subsidy data online, and more states are moving in this direction. Moreover, the consolidation of this information in one place would enable the District to create an economic development budget, providing the Council and DC residents with a more comprehensive picture of economic development spending. Currently there is no one place to find this information. We also recommend that bi-annual reports should be available online to the public, as well as the Mayor and the Council.
In short, DCFPI supports the intent of the bill to improve compliance monitoring and enforcement. However, we see this bill as an opportunity to significantly improve the collection and dissemination of information on compliance and enforcement by including ALL economic development projects that receive subsidies, all requirements associated these agreements, and publicly disclosing this data online. Timely, accurate, and accessible information is critical for oversight, fiscal accounting, developing effective economic and workforce development strategies, and ensuring DC residents receive meaningful benefits in exchange for these subsidies.
Thank you for the opportunity to offer testimony.
 Mattera, Philip, Karen Walter, Julie Farb Blain, and Michelle Lee. (2007). The State of the State Disclosure: An Evaluation of Online Public Information About Economic Development Subsidies, Procurement Contracts and Lobbying Activities. Good Jobs First, Washington D.C. Available at www.goodjobsfirst.org