EDITORIAL: Commissioner Whiting’s $600,000 Question, Part Two
I suppose any government leader worth his salt can easily find ways to spend $600,000. Some are easily able to come up with plans to spend $1 billion, or even $7 billion.
A curious “economic development” game is currently playing out here in America. The corporation known as Amazon has announced plans to build a “second headquarters” somewhere somewhere in the country, (or maybe in Canada?) and has offered local and state governments the opportunity to propose big tax breaks and subsidies to the $479 billion online retailer… if only Seattle-based Amazon will choose their city and bring 50,000 expected new jobs along with it.
Proposals were due yesterday, October 19. Amazon says it will announce the winner next year.
New Jersey’s government has proposed $7 billion in potential credits against state and city taxes if Amazon locates in Newark and sticks to hiring commitments, according to a news release from the governor’s office earlier this week.
A report from the California governor’s office seen by Reuters said Amazon could claim some $300 million, and a bill in the state’s assembly would offer Amazon $1 billion in tax breaks over the next decade. (I’m not sure if that bill was actually passed.)
A sad part of this story has not been sufficiently covered by the media, but researchers at ApartmentList.com took the time to calculate the negative impact that 50,000 new employees would have on affordable housing in the city Amazon eventually chooses.
From that article:
Denver, one of the most likely picks for Amazon’s HQ2, already faces an affordability crisis, with rents rising 52 percent between 2005 and 2015. With a low vacancy rate and too little permitting, Amazon’s new HQ2 presence would increase rents an additional 8.8 percent over 10 years. Lower wage workers, including those needed to support Amazon, would be especially impacted by these rent increases, as new housing built for Amazon and other tech workers would skew towards the luxury end of the market.
“Economic development” is a double-edged sword, and it never affects all sectors of the community in a the same way.
Meanwhile, back in the boondocks of Pagosa Springs, Archuleta County Commissioner Whiting has made a $600,000 proposal to his fellow commissioners at the County, and to the Pagosa Springs Town Council — that each government board include in their 2018 budget, $300,000 for certain critical community needs in 2018.
In the past, the Town Council and the BOCC have often played a game of “Dutch Date” with funding proposals — where one board will support a joint project only if the other board commits an equal amount of money. They played this game with the $520,000 local investment in the Pagosa Verde drilling project, for example, with each government investing $210,000. They played it again with the funding for the Archuleta County Housing Needs Study — once again, with each board committing half the cost of the study.
So we need not be surprised that Commissioner Whiting, in making his proposal to fund three “strategic priorities” next year, was asking each government board to commit the same amount: $300,000 each.
And again, in the interest of fairness, his proposal is to then distribute the total $600,000 in three equal portions — $200,000 to each of the three volunteer community groups currently working on the three “shared strategic priorities”…
1. $200,000 for broadband internet
2. $200,000 for early childhood education, and
3. $200,000 for affordable housing
The actual distribution of 2018 funds, in Commissioner Whiting’s plan, would be upon the recommendation of a special commission created by a Town-County agreement.
I am sympathetic with Commissioner Whiting and the other community leaders who feel these are important issues, but I don’t necessarily agree that they are “equally serious” issues — nor do I necessarily agree with Commissioner Whiting that the exact same amount of government subsidy ought to be applied to each problem. That seems a somewhat childish solution, as if three school children were dividing a candy bar equally among themselves.
I think there are a couple of larger issues to consider, if the Town and County are going to come together in a sensible way, to address a community problem that might benefit from some type of government subsidy.
One issue is the impact on the Town’s budget. Although — as the Commissioner noted in his presentation to the BOCC — $300,000 is only one percent of the County’s annual budget, it’s about 25 percent of the Town’s current reserves, and about 10 percent of its General Fund.
The other issue has to do with throwing money at a problem before doing any kind of realistic financial planning. I’ve watched our government boards do this — all too often.
Government funding doesn’t need to be done in a financially-haphazard fashion.
I was intimately involved in the three-year process that led to the opening of Pagosa’s first charter elementary school. The creation of a charter school is not rocket science; in fact, the Colorado League of Charter Schools has, over the past 25 years, developed a successful (if complex) template that greatly assisted our group (mostly, young moms) in planning and funding the Pagosa Peak Open School.
Among the many tasks required by school districts, when a group is proposing a charter school in any community, is a lengthy and detailed “Charter Application.” Ours was 450 pages long, and one of the many items in that application is a proposed budget. The school district naturally wants some evidence that the charter school will be financially viable, based on the money provided annually by the Colorado Department of Education’s funding formula.
Basically, you have to develop a six-year budget — before you have any staff hired, before you know what building you will be using, before you know how many children will be enrolled.
The volunteer board did not seek any subsidies from the Town or County in the process of opening Pagosa Peak Open School. (The Town, however, kindly donated some second-hand playground equipment to the school, for which we are eternally grateful.) The start-up funds came through successful grants written by a bunch of young moms with no experience writing grants.
I’m rambling on about this process because I think it relates to the sometimes-careless manner in which governments allocate funding and subsidies for unproven projects. Granted, it’s relatively easy to spend other people’s money, and that’s exactly what our elected boards are charged with doing. But “easy” doesn’t need to mean “haphazard.”
I agree with Commissioner Whiting’s general idea. We have some needs in our community that the private sector may not be willing or able to solve without taxpayer participation.
But let’s not be amateurish about dedicating out more than a half million dollars in a community with many unfunded needs.
First — what’s the plan? And what’s the six-year budget?