Coalition to End Needless Tax Subsidies (CENTS)
- Dear Businesspeople and residents of Ward One, Councilman Jack Evans has proposed to give the third largest defense contractor in the country a $25 million tax break and other property tax breaks for 10 years in order to make Washington, D.C. its headquarters from Los Angeles. It is also considering Maryland and Northern Virginia as well. It is pitting one area against the other and trying to convince them, they will have advantages when in fact all the jobs will be held by the original people who lived in Los Angeles. There will be only about 200 new jobs for people who move to D.C.
Please let all the D.C. Council members know how you feel if you agree with the Coalition Letter.
There will be a hearing before Kwame Brown at the John Wilson Building at 10:00 a.m. on Monday. Andy Shallal of Busboys & Poets is going to speak on behalf of himself and try to speak on behalf of small businesses in general. If other small business owners are interested in attending and better yet speaking, call (202) 727-6683 and let them know you want to speak. Andy Shallal of Busboys &
Poets will also be speaking for himself and small businesses in general. If you want to speak on behalf of your businesses, please consider doing so. Below is a general letter being sent from a group cell CENTS or the Coalition to End Needless Tax Subsidies to Jack Evans who introduced the legislation to offer Northrop Grumman the $25 million tax breaks and 10-year property tax.
There will be another hearing before Jack Evans' committee on Tuesday at 10:00 a.m. as well. Please come down and show your support and if you are willing to give your support by presenting testimony call (202) 724-8058 and let S. Loy of Jack Evans' office know you want to give testimony.
Coalition to End Needless to Tax Subsidies
March 4, 2010
The Honorable Jack Evans
Council of the District of Columbia
1350 Pennsylvania Avenue, N.W., Suite 106
Washington, DC 20004
Dear Councilmember Evans,
We are writing to express our opposition to the legislation that would give $25 million in tax breaks and other incentives to encourage Northrop Grumman to move its headquarters to the District. By targeting large corporations with tax subsidies, the District is neglecting investments that could be made in small businesses, which next to the Federal Government, are the backbone of the District's economy.
We urge the Council to reject this legislation. It is not a part of any coordinated economic development strategy and combined with the recent CoStar deal, it highlights a growing trend of providing large tax abatements with little accountability in terms of benefits to the District. The fact that there is no definite commitment to creating new jobs, there is no guarantee that Northrop will generate other business activity, nor is there a guarantee that Northrop's employees will live in the District indicate that this is not a well-designed tax subsidy.
At a time when DC's finances are tremendously strained by the recession and the city's resources are far below the level needed just to maintain services, the District needs to make smart decisions over every dollar it spends, including:
More accountability needed for tax abatements: The District has offered two large tax abatements in recent months without a cost-benefit analysis and without expecting clear benefits in return. (The final CoStar tax package requires the company to hire 100 DC residents, but there were no specified benefits to DC in the original bill.) Legislation introduced in 2009 the "Exemptions and Abatements Information Requirements Act of 2009" would require a financial analysis of all proposed tax abatements, and it would require businesses to specify the benefits they would bring. This legislation should be adopted.
DC needs an economic development strategy that is fair: CoStar and Northrop Grumman will pay no property taxes to the District for 10 years, while most other businesses across the city will pay their property taxes in full.
DC needs an economic development strategy that focuses on job creation and small business: A series of ad hoc tax breaks for selected businesses is not part of a coordinated economic development strategy. And these tax breaks take resources that could be used for other economic development efforts. For example, attempts to reduce commercial property taxes for small DC businesses have been constrained due to limited resources. Providing tax subsidies for
businesses like CoStar and Northrop Grumman make it even harder to assist small businesses.
In the end, the proposed Northrop Grumman tax break is an ad hoc policy and not part of a comprehensive economic development plan. It does not reflect an analysis of economic development needs or of the parts of the city most in need of such assistance. It should be rejected.
On behalf of the Coalition to End Needless Tax Subsidies (CENTS)
Director of Small Business Development
Latino Economic Development Corporation