Three Strikes and You’re Out: Three Major Problems with Plans to Finance Parks in NoMA
The neighborhood now known as NoMa has a lot going for it, but there’s one big thing missing: public parks. In recent years, this area has been booming with new development spurred by the addition of the New York Avenue Metro Station and several federal and DC agencies, but green space is in short supply. Of course great public spaces help shape great communities, but the supporters of a DC Council bill to advance this goal in NoMa are going about it in the wrong way.
What could be wrong with parks in NoMA? The devil is in the details.
While the idea of bring more parks to NoMA is fine, the way that the NoMa Reinvestment Act of 2011 would go about it has three colossal flaws. The legislation would dedicate over $50 million in DC tax collections and turn it over to a private organization to spend. Strike One. There would be little public accountability for the spending decisions. Strike Two. And the bill deceptively hides the costs of the bills so that $50 million of spending on parks would officially have no impact on DC’s finances. Strike Three.
The legislation creates a private fund, where a portion of the money that would otherwise go to the District’s general fund would be deposited. This would be used towards the development of parks and other infrastructure projects in NoMa. The amount deposited in the fund would be based off projections made by the Office of the CFO on the amount of revenue expected to be generated within NoMa from three sources: 1) deed and recordation taxes; 2) property taxes; and 3) sales taxes. Revenue in excess of these projections would be deposited into the fund.
Hiding the Costs
If someone gave you a free lunch, you would eat it, of course. But what if it turns out that they bought that lunch with money that they already owed you? Doesn’t sound so appetizing now, does it?
That is what is happening with financing in the NoMA parks bill. When the legislation was introduced earlier this year, the funding was fairly straightforward, and the CFO confirmed that the sponsors would need to find tens of millions in revenue or budget savings to meet the expected costs.
Rather than rolling up their sleeves to do this, the proponents took the easier route and found two ways to make the official costs of the bill disappear. One is a bit hard to explain but the other is not. All legislation passed in DC must show that it will not put DC’s budget out of balance, but only for a 4-year window that the CFO must use to assess the fiscal impact of legislation. To get around this, much of the costs of the NoMA park bill would occur starting five years from now. This allows supporters to claim that the bill has no fiscal impact, but like any magician’s trick, this is just 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 where taxpayer money would be turned over for the use by a private organization.
The legislation would give the NoMA Business Improvement District, a private nonprofit, control of the funds. The legislation would create an advisory board to review the NoMA BID’s proposals, but three of the seven members of this board would be appointed by the NoMa Improvement Association BID, giving a private organization significant power in deciding how significant sums of taxpayer dollars ought to be spent. The city already has a Department of Parks and Recreation, which looks at the city holistically, on a yearly basis, and comes up with a budget which determines how much should be spent on parks throughout the city. The rationale for having a private organization do the same thing in a specific area of the city with public money is unclear.
Very little accountability
It is a significant step for public funds to be directed to a private organization which then takes on the same functions that the District government is already responsible for, in deciding how those funds ought to be spent. If this is to occur, there should be a lot of Dc government oversight. Yet 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 and submitted it to the Council for approval, the Council only would have only ten days (not 10 business days even) to review the decision. If the Council fails to act within those ten days, the decision of the board will be deemed approved.
The NoMa Reinvestment Act is the epitome of poor fiscal policy because it directs public money to a private organization, requires very little accountability, and deceptively hides the fiscal impact of the bill. For these reasons, bill 19-23 should be voted down by the City Council.