This Sunday’s Washington Post had an article about the DC Mayor’s buddies cashing in on their ties to his office. There was also a recent article in City Paper. If you know me you probably also know that I am not driving a Porsche to work or building a mansion in Northwest. Instead I am investing my earnings as a small business owner back into the startup that I plan to launch this year. You may also have noticed that I don’t get political that often, despite my days as a politico. But today I am going to get a little political, though not in a partisan kind of way.
This afternoon I read an article talking about how the Mayor and City Council are trying to offer up $25 million in tax abatements to a huge defense contractor to encourage them to move to the district More. Putting aside my thoughts on what percent of that is coming from the insane level of parking ticket revenue the district government must be collecting right now, I am in disbelief.
As a small business owner who lives in your district and votes I get a newsletter from my local council member who bypasses the subject of what is going on in the business community here. In seeing this kind deal going on in the background I can understand why. Taxes, Real Estate and the Cost of Living in DC are not cheap. If you head out to the suburbs it isn’t that cheap there either. At least not until you get an hour or so out of the city. While DC is still less expensive than say Manhattan or San Francisco, that should not be an invitation for the council to work on closing the gap. That is exactly what this $25 million tax abatement proposal that the DC city council would do.
DC Developers get a lot of handouts as it is – fraternity brothers or substitute teachers of the Mayor or not. This $25 million subsidy being proposed for Northrop Grumman to relocate here amounts to another handout to our friends in the real estate development community. Rewarding the developers by bring in NG with a $25 million dollar carrot helps to refill their war chests which in turn leads to less affordable commercial and residential real estate when they go out and find new communities to turn. The beneficiaries are not small business owners and startup founders, their current employees, or their future employees. We end up paying more to live and do business.
Here are a few alternatives to handing out tens of millions to big companies who will turn around and write big checks to developers:
Idea #1 – Why not create a stimulus package that rewards all local businesses for spending money on local companies ala Robin Hood instead? If I get $1,500-$5,000 to spend on a transaction with another local business owner I am helping create new jobs. That kind of money could help pay for some web development, public relations, marketing, or a summer intern.
Idea #2 – Spend it on something that helps make DC appear higher on the list of cities in the US that are friendly to small business.
Idea #3 – Spend it on spurring a lot of small to medium sized companies to move here, start up here, or to grow here. Blackboard is doing quite well these days – why not do something to create more of them. Living Social is too. Revolution, or Waterfront Media, isn’t hiring like they once were but they certainly created a lot of jobs in the district. I know a lot of startups that are doing quite well here and who are creating jobs. Add them up and the benefits approach par very quickly.
Update:
Northrop Grumman is moving to Virginia. Now the DC government has no reason not to put this money toward a good cause.
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