Tuesday, October 6, 2009

Just Say No!

Public money offered by DC to developers has grown substantially in recent years. Almost $350 million was given through 'tax increment financing,' tax abatements, and other tax subsidies for commercial development projects between January 2007 and December 2008..."

Liz Williams and Elissa Silverman, "Breaking Away: How TIFs, Tax Abatements, and other Economic Development Tax Subsidies Shortchange the District," HillRag, October2009.

There is a "can't say no" element to the use of public incentives that defies logic -- most studies show subsidies don't work as intended. You would think an untapped market might be sufficient. The rebuttle to this kind of thinking usually combines whining about land assembly, costs of doing business, risk, etc. Some of this is no doubt true. But I also suspect the "true" subsidy costs might be higher when infrastructure is included.

Given budget shortfalls, school lay-offs, etc, it might have been useful to translate lost tax revenue from the use of these incentives into the real terms of DC services. How many teachers, etc. Moreover, usually these deals make some promises about jobs -- no doubt Target and CVS. Were promises made and kept? Who got the jobs?

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