Economic Development Incentive Packages
Testimony to New York City Council Committee on Economic Development Oversight Hearing on Economic Development Incentive Packages
Marnie McGregor
Policy and Communications Specialist, Pratt Center for Community Development
December 19, 2006
Chairman White, Jr. and Committee members, my name is Marnie McGregor from the Pratt Center for Community Development.
First we would like to commend the Committee for convening this oversight hearing, and the leadership of Speaker Quinn. We particularly applaud the Council for passing Local Law 48 last year which significantly helps policy makers and the public better understand the fiscal and employment impacts of economic development deals negotiated outside of the budget process by the IDA & EDC.
In addition, many improvements have been made by the IDA over the past year to make the public process for subsidy proposals more meaningful. In addition, stronger clawback provisions now generally require commercial companies to meet job growth targets in order to receive subsidies.
However, we share your concerns that economic incentives are being provided to large-scale development projects without enough benefit being provided back to local communities. As Good Jobs New York has stated, taxpayer dollars should not be used to reinforce or exacerbate low wage, part-time jobs with no health insurance that don't lift people out of poverty. Instead, public subsidies should be used as a tool for helping working families move up the economic ladder.
This month we published a report entitled "Building in Good Jobs: Linking Economic and Workforce Development with Real Estate-Led Economic Development." This report is a national scan that demonstrates how other cities around the country are tying economic development to career ladders and living wage jobs. The report focuses on three linkage strategies that are relevant in the context of real estate-led economic development: first source hiring, linkages between development projects and employment training opportunities, as well as the establishment of goals and standards for job creation and job quality in conjunction with redevelopment projects.
The report is unique in focusing on how linkage policies can specifically harness urban revitalization to help people make a lasting exit from poverty. Across the country, residents of low-income communities are benefiting from linkage initiatives, and that the efforts have not, as some have warned, driven land developers away, or discourage property investment.
Despite recent improvements in economic development incentive policy, New York City can learn valuable lessons from other American cities. Five recommendations are provided to leverage the value of urban redevelopment activity in ways that address unemployment and poverty including systematic record-keeping and monitoring, first source hiring, sectoral training coordination, training linkage fees, and prevailing wage/benefit standards.
I will leave copies of the report with the Committee, and hopefully it will be a helpful resource on this important issue.
We look forward to working with the Speaker, City Council and the Administration to help New York City do even more to ensure that economic development packages and subsidies create high quality jobs that can benefit all New Yorkers.
Thank you very much for this opportunity to comment.
- Tags: good jobs, economic development
