Subsidizing the Low Road: Economic ... - Good Jobs First

10. ConclusionBaltimore’s massive investment in the Inner Harbor and downtown reveals arecurring history of high costs, low benefits, and a lack of safeguards to ensure thattaxpayer investments really pay off in family-wage jobs and an enhanced tax base.Unlike most states and many big cities, Baltimore has no job quality standards, or lawsrequiring subsidized companies to pay a certain wage or to provide healthcare. Thepattern is especially troubling today, because instead of federal or state dollars tofinance development deals, the city increasingly employs local tax expenditures – TIFand PILOTS – which mean foregone future revenues for education, infrastructure andother public services.Baltimore development efforts are also marred by pervasive process problems.Baltimore’s privatized system for initiating deals – through the Baltimore DevelopmentCorporation (BDC) – affords taxpayers no opportunity for input as deals are shaped,and often only perfunctory chances to analyze or comment before they are formallyauthorized by the Board of Estimates or the City Council. The BDC’s records are secret,exempted from the Maryland Public Information Act. More broadly, citizenorganizations have few meaningful ways to engage in and influence long-term prioritysetting.Citizen participation is also discouraged by budget reporting systems thatmake the city’s economic development spending difficult to discern.To address the shortcomings found in our analysis, we offer policy options:Enhance Public Participation. The city can enhance public participation in the economicdevelopment process in several ways:• Reducing the Board of Estimates, which approves most economic developmentsubsidies, to its three elected officials (the Mayor, the Comptroller, and the CityCouncil President);• Requiring that a public hearing be held to discuss each proposed subsidy withnotice given at least 30 days in advance of the hearing. Information on the dealwould also be made available to the public 30 days in advance. This informationwould include the location and scope of the project, the value of the subsidy,the projected jobs created or retained by the project, the projected wage andbenefit levels of the jobs, the projected tax revenues, an analysis that explainswhy the subsidy is necessary and any other relevant economic analysesperformed by the economic development agency;50