{"id":208,"date":"2019-04-08T17:35:39","date_gmt":"2019-04-08T17:35:39","guid":{"rendered":"http:\/\/www.dcfeedback.com\/archives\/?p=208"},"modified":"2019-04-08T18:55:43","modified_gmt":"2019-04-08T18:55:43","slug":"d-c-wastes-tax-dollars-on-ineffective-tax-incentive-programs-report-curbed-dc","status":"publish","type":"post","link":"http:\/\/www.dcfeedback.com\/archives\/208\/","title":{"rendered":"D.C. wastes tax dollars on \u2018ineffective\u2019 tax incentive programs: report – Curbed DC"},"content":{"rendered":"

dc.curbed.com\/2019\/3\/27\/18284199\/dc-economic-development-incentives-qhtc-groceries-taxes<\/a>
\nReport: D.C. is wasting millions of tax dollars annually on \u2018ineffective\u2019 incentive programs The District should change or scrap certain expenditures for economic development, a local think tank argues
\nAndrew Giambrone Mar 27, 2019, 4:15pm EDT Downtown D.C. (2018) mervas\/Shutterstock Gone are the days of D.C.\u2019s financial control board, when the District\u2019s finances were in such poor shape that Congress installed an outside panel to oversee them. But while the ship has been righted, budgetarily speaking, D.C. is now squandering millions of public dollars every year on \u201cineffective\u201d economic development programs, according to a left-leaning think tank.
\nIn a new report released on Wednesday, the D.C. Fiscal Policy Institute (DCFPI) argues that the District \u201coffers several economic development tax incentives that cost the city millions in lost revenue each year, yet fail to contribute to economic growth.\u201d Those programs, the think tank notes, include ones designed to attract so-called \u201chigh technology companies\u201d as well as grocery stores to do business in the city. And they have not been shown to work, DCFPI says.
\n\u201cThe District is wasting money on tax subsidies that aren\u2019t working,\u201d DCFPI\u2019s Amy Lieber says in a statement. \u201cWorse yet, no one has been checking to see if they make a difference.\u201d D.C. should alter or eliminate these programs to free up additional revenue, per the report.
\nCurbed DC Newsletter
\nBy signing up, you agree to our Privacy Policy and European users agree to the data transfer policy. Currently, the D.C. Council is considering Mayor Muriel Bowser\u2019s budget proposal for next fiscal year, which begins on October 1, 2019. Bowser filed her proposal with the Council last week, and lawmakers have begun to hold hearings on various pieces of it and city agencies. (It\u2019s drawn flak from D.C. Auditor Kathy Patterson, who called it \u201cnot fiscally responsible.\u201d)
\nCiting a comprehensive review by the D.C. Chief Financial Officer last year, DCFPI\u2019s report says the District\u2019s \u201cQualified High Technology Companies\u201d (QHTC) tax incentive program\u2014implemented in 2001\u2014now costs D.C. $40 million annually in foregone revenue. The Chief Financial Officer\u2019s office ultimately determined that it was \u201cnot able to reasonably identify what new actions were taken due to the [QHTC] incentives\u201d or \u201cwhat economic benefits are attributable to the incentives,\u201d which include various tax breaks and tax credits. Per DCFPI:
\nThe process for claiming the incentive is self-certification by the companies, with the Office of Tax and Revenue having the burden to prove ineligibility (which is a difficult task, as a 2012 court case shows). Additionally, for legal reasons, there is no disclosure of which companies receive the benefits or how much they receive. This means that taxpayer money is going into the pockets of unknown beneficiaries that have few restrictions to qualify.
\nThe [Chief Financial Officer] found that many of the companies claiming these incentives are headquartered outside DC, often in Northern Virginia, but maintain a small operation in DC or have employees who contract with the federal government.
\nThe report also found that many of the companies claiming the tax incentives were already engaged in the same business in the same location before they started claiming tax subsidies. This means the incentive gave away millions in tax breaks to companies for activities they likely would have undertaken anyway, without necessarily generating growth.
\nThe DCFPI report also critiques the District\u2019s tax incentives for grocery stores to move into underserved areas, saying these incentives cost $29 million in revenue from 2010 to 2017, with only three supermarkets currently serving neighborhoods east of the Anacostia River.
\nPointing to a 2017 report on grocery access from the D.C. Policy Center\u2014another local think tank\u2014DCFPI says the vast majority of recent supermarket development in D.C. has been \u201cin transitioning and higher-income areas that likely would have drawn a supermarket anyway.\u201d
\n\u201cWhile the DC government requires that the incentive only go to new grocery stores in specific parts of the city, the targeting is not limited to the highest need areas, and the incentives have not been enough of a draw to bring an adequate number of stores to these areas,\u201d DCFPI says. It recommends replacing the program with more targeted investments.
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\nBy signing up, you agree to our Privacy Policy and European users agree to the data transfer policy. In response to the report, Deputy Mayor for Planning and Economic Development Brian Kenner said D.C.\u2019s incentive programs are \u201cvital tools\u201d for supporting the city\u2019s economy.
\n\u201cWith the recent federal government shutdown and other unforeseen circumstances, it is even more critical that we remain focused on diversifying the District\u2019s economy,\u201d Kenner said in a statement. \u201cRemoving even one tool from our toolbox can negatively impact our efforts, especially with attracting fresh food options east of the river. We would welcome additional data on the uptake of QHTC benefits by high-technology companies in the District, to have a more evidence-informed discussion of how to strengthen the program.\u201d
\nAmazon would have benefited from the QHTC program had the tech giant chosen D.C. for its corporate expansion. The total amount in tax benefits would probably have been in the order of hundreds of millions of dollars over time.. The program does not have clawback provisions.
\nThis post has been updated with comment from Kenner.<\/p>\n

Mary Bolton 202-390-1208<\/p>\n","protected":false},"excerpt":{"rendered":"

dc.curbed.com\/2019\/3\/27\/18284199\/dc-economic-development-incentives-qhtc-groceries-taxes Report: D.C. is wasting millions of tax dollars annually on \u2018ineffective\u2019 incentive programs The District should change or scrap certain expenditures for economic development, a local think tank argues Andrew Giambrone Mar 27, 2019, 4:15pm EDT Downtown D.C. (2018) mervas\/Shutterstock Gone are the days of D.C.\u2019s financial control board, when the District\u2019s finances were […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-208","post","type-post","status-publish","format-standard","hentry","category-housingarchive"],"_links":{"self":[{"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/posts\/208","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/comments?post=208"}],"version-history":[{"count":0,"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/posts\/208\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/media?parent=208"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/categories?post=208"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.dcfeedback.com\/archives\/wp-json\/wp\/v2\/tags?post=208"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}