Good Jobs First (A project of Citizens for Tax Justice) - DC
Brian Miller
The George Washington University

The Washington, DC, metropolitan area is undergoing massive change; so much so that some people say the newest monument in town is the construction crane. Most would consider it a mark of progress, but with all progress comes costs.

In order to spur on development, the city government has doled out massive subsidies to corporations and institutions including tax abatements, revenue bonds, and tax-increment financing to finance new construction. Tax abatements involve the forgiveness of all or part of taxes. Revenue bonds are below-market rate loans whose interest is tax-exempt. Finally, tax-increment financing are bonds that are paid back using future sales and property taxes of the organization.

Proponents of economic development state numerous benefits of providing subsidies to organizations. They mention an increase in taxes, increases in or the retention of jobs, the beautification of areas, as well as promoting the public good. In reality, these benefits usually fail to materialize. Most increases in tax revenue are offset by the cost of the subsidy. Some projects do not even pay taxes because of their non-profit status. Projects that create jobs may only create low-income jobs with no benefits or fail to create any jobs at all. Beautification often occurs, which causes property values to rise, pushing lower-income people out of their homes. Finally, many projects do nothing but assist private businesses, at the public expense, a process more commonly known as "corporate welfare."

As you venture into DC, consider the cost to taxpayers of your surroundings. If you visit the Smithsonian (a supposedly free institution), remember that DC issued tax-exempt revenue bonds in the amount of $155 million to the museum. Music fans take advantage of the Kennedy Center because of $35 million in tax-exempt bonds. Most universities have received bonds as well, including the George Washington University ($380 million), Georgetown University ($600 million), Howard University ($180 million), American University ($91 million) and Catholic University ($70 million). Non-profits aren't exempt, as many of the largest organizations in the country have eagerly received handouts including the National Red Cross ($105 million), the Children's Defense Fund ($7.5 million) C-Span ($13 million), the World Wildlife Fund ($90 million), and the National Geographic Society ($29 million).

It is especially important to pay attention to the surroundings of our weekly meetings. Downtown Washington, DC, is undergoing some massive changes, largely because of subsidies. As you head up the escalator at the Gallery Place Metro Station, take notice of the gaping hole next to the station. That is the future home of Gallery Place, a mixed used development that will have retail, housing, and a 13-screen movie theater. It was funded through Tax-Increment Financing (TIF) of $75 million and a $7 million tax abatement. Gallery Place's next-door neighbor is the MCI Center. At the time of its construction, its owner (Abe Pollin) was hailed as the savior of downtown. Pollin was praised for bringing NBA basketball to downtown and constructing the stadium at his own cost. In reality, the heroes of downtown are the citizens of the District. They subsidized the cost of construct through $200 million in revenue bonds and by abating all of the taxes of the stadium. A couple of blocks away is the newest museum in DC, the International Spy Museum. This project also received TIF in the amount of $6 million and a revenue bond for $15 million. Across the street from the metro station is the future home of the Golden Palace Chinese Restaurant, a recipient of $11 million in revenue bonds. Finally, the convention center, arguably the most impressive structure in DC, towers over downtown. Although it takes engineering genius to create such a massive structure, it also takes taxpayer dollars to the tune of $650 million in revenue bonds.

During your summer internship, I urge you to take full advantage of all that the city has to offer. As you stroll the streets of DC, marvel at our beautiful architecture, world-class facilities, and glorious skyline. Take in the atmosphere of a city that some consider to be the capital of the free world. Make sure to utilize our many museums and cultural institutions. Most importantly, after you have completed your summer, thank the common DC taxpayer for subsidizing your experiences.

Oh, and by the way…every Tuesday as you recline in the plush comfort of the National Public Radio Conference room to listen to our weekly speaker, be sure to remind yourself that it was funded at the public expense with $40 million in revenue bonds.