You may not think that a hearing on the Exemptions and Abatements Information Requirements Act would draw a big crowd. But this week, a diverse group of organizations and residents ‘ including the DC Fiscal Policy Institute ‘ came out to testify in favor of this bill, which would require greater scrutiny when DC uses tax abatements to promote economic development.
The bill’s supporters included workforce development advocates, small businesses, civic organizations, national experts on responsible economic development, and just regular concerned residents. Even the Washington Post, which did not testify in person, was there in spirit. The day of the hearing, the Post published an editorial supporting the bill.
So what’s the Exemptions and Abatements Information Requirements Act about?
In recent years, the District has subsidized a number of development projects through tax exemptions ‘ often in the form of a 10-year, 100 percent property tax break ‘ yet the city currently does not have a process to evaluate the merits of one tax abatement versus another. The bill would require answers to two critical questions that should arise when an abatement is being considered:
- Is this tax subsidy necessary? Under the proposed legislation, the DC Chief Financial Officer would analyze the finances for any development project seeking a tax abatement to see if it really needs city help to be viable. The District already requires such an analysis for other economic development subsidies (Tax Increment Financing), but not for tax abatements.
- How would the District benefit? The proposed legislation would require the project’s developer to detail the community benefits that would come from the development. Many of the people who testified this week said that the most critical information to gather is the number of jobs that would be created, along with their expected wages and benefits.
In the end, the Exemptions and Abatements Information Requirements Act is really about improving the information available to policymakers and to the public when a tax abatement or exemption is being considered. Who can be against that? We look forward to quick DC Council action to move the bill forward.
