(This and other posts have been delayed due to intermittent computer problems that now seem to be solved.)
Flickr image of cogs in a machine by velcro monkey.1. Tax abatements in DC.
"There is a time when the operation of the machine becomes so odious, makes you so sick at heart, that you can't take part; you can't even passively take part, and you've got to put your bodies upon the gears and upon the wheels, upon the levers, upon all the apparatus, and you've got to make it stop. And you've got to indicate to the people who run it, to the people who own it, that unless you're free, the machine will be prevented from working at all!" -- Mario Savio, speech during the Free Speech Movement at University of California, Berkeley, December 2, 1964
The problem with the process for approving tax incentives is that there isn't a standard, transparent and objective procedure for initiating and overseeing the process. (Which I have identified as an ongoing problem through the previous 5 years of blog entries.)
Tax abatements are most often initiated through legislation written and submitted by individual Councilmembers.
It's a system fraught with peril, back room deals, and special consideration.
community newspapers (download the December 15th issue
) also wrote about the Good Jobs First report, and editorialized against the Adams Morgan hotel deal--maybe they aren't against it, but they think more time should be spent evaluating the proposal, and they specifically commented that the economic impact analyses done for each tax abatement request can be insufficient.
The one objective requirement in the tax abatement request process is that the Office of the Chief Financial Officer is required to produce an economic impact analysis for each request, comparable to how the Office of Planning provides reports to the Zoning Commission and the Board of Zoning Adjustment with regard to matters before those bodies.
Some of the reports could be better, and there isn't a master tally, I don't think that there is an annual report on tax abatements, and there sure isn't a system in place for monitoring the impact of the abatements.
(1) we need a standard system, whereby all applicants for tax incentives go to one place to start the process. And that place shouldn't be City Council.
(2) Probably it should be the Office of Tax and Revenue, which could then publicly log each request and maintain a running tally of all the requests, perform and publish an analysis of each request, and (3) forward each analyzed request to the City Council's Committee on Finance and Revenue for consideration, creation of legislation for approval, and then forwarding on each request for a tax abatement/incentives to the full City Council for final consideration and approval.
The OTR is already required to do an evaluation of the actual economic impact of each tax incentive/abatement proposal. (4) An annual report on tax abatements/incentives, the process, the overall impact on the city, should have to be produced as well. The report could be partly produced by the OTR and partly by the Committee on Finance and Revenue, with support from the Office of Planning.
Sure, the process could still be gamed, but by requiring that the process starts at one particular point instead of at least 15 potential points currently (13 City Councilmembers, Mayor, Deputy Mayor for Planning and Economic Development), and is a public and transparent procedure, the problems presented by the current system would be corrected.
2. Elected official shepherding of development proposals.
This is a problem throughout the State of Maryland, although it is not a problem in every county. It definitely is a problem in Prince George's County and is the root of much of the corruption and unethical behavior present in the county.
On Sunday, Post
editorial writer Lee Hockstader wrote a piece, "What's behind the corruption in Prince George's County? In part, residents' apathy
," commenting on his experience that most people running for office in Prince George's County didn't think ethics and corruption was a major issue. Of course they wouldn't. They are part of the Growth Machine and they are products of the current system, which is designed to support unethical behavior, not to correct it.
This comes up because the Post
had an article yesterday, "Johnson loses voice on zoning matters
," about how "Council member privilege" to run point for development projects within particular Prince George's County Council District's has been denied to Leslie Johnson, who was recently arrested for having payments from developers in her possession.
From the article:The Prince George's District Council has stripped newly elected member Leslie Johnson of a long-standing privilege that allows county lawmakers to shepherd development projects through the political process, prompting some residents to question whether they are being denied full representation. ...
Council members use a practice called district courtesy to promote development in their communities. The District Council, which is the County Council when it hears zoning matters, gives deference to its members, allowing them to introduce a project and follow it through the process.
The problem here isn't Leslie Johnson per se. It's the process/system of corruption. In the most professionally managed communities, development approval isn't a political process as much as it is an administrative and legal process.
Sure there are points in the development process where politics matter, especially when the proposal may involve various government incentives (infrastructure, land, transit, tax, other funding, zoning changes, etc.), but for the most part, the process shouldn't be subjective, and that's what happens in situations such as those in Prince George's County (although it's a problem in some of the counties in the Baltimore area also).
And the fact that Councilmembers aren't supposed to get involved or use their intelligence with regard to evaluating projects in other Council Districts, that Councilmembers defer to the Members in the district where the development occurs, is a frightful problem with process. (This is actually a problem in DC also. And it's really the way it works in Chicago, usually to the city's detriment.)
This is a system designed deliberately to foster corrupt and/or unethical acts.
Change the system. Leslie Johnson is merely the latest cog.
Labels: corruption, land use planning, progressive urban political agenda, public finance and spending, real estate development, tax incentives, zoning