Enforce First Source Ordinance (This ran in Projo, July 19, 2005)
The First Source ordinance, which passed 20 years ago, requires that Providence residents be the first considered for new jobs created by projects that get City tax breaks, grants, or loans. The City has never enforced First Source -- costing the people of Providence countless jobs and millions of dollars.
Over the last decade, Providence has conceded more than $400 million in taxes to incentivize new developments, mostly downtown. First Source should cover all of these projects, which include GTECH, the Masonic Temple hotel, residential developments at WaterPlace and on Wesminster St, and most of the others that are making the Chamber of Commerce and real estate interests so giddy.
The ordinance requires that the City "commit annually no less than two hundred fifty thousand dollars ($250,000.00) for the recruitment, training, referral and maintenance" of the program.
That’s $250,000 to leverage tens of millions of dollars for the people of Providence -- tens of millions of dollars to be spent in local businesses, to purchase local goods and services, to create local jobs, to stabilize and improve our neighborhoods.
But for unclear reasons, Mayor Cicilline has recommended no City funding for First Source in this year's budget proposal, and until recently, the ordinance had gone wholly un-enforced.
After two years of pressure from the Council and the people of Providence, Cicilline has proposed an internet-based database to which residents would post their names and which developers could access to search for potential employees. Two City employees -- both indeed very qualified -- would spend parts of their already busy days overseeing compliance with the program.
That's certainly better than utter disregard for the ordinance, but under the Mayor's plan, too many questions go unanswered, and too many requirements of the ordinance go unfulfilled. His plan doesn’t specify which jobs, on which projects, would be covered. It doesn’t provide for well-targeted job training, sensitive to the ethnic diversity of our city, or its residents who have criminal records. Perhaps most importantly, it doesn’t explain how developers and businesses would be deemed compliant, or how they’d be penalized for non-compliance.
We believe diligent enforcement of First Source is necessary to ensure that new development truly benefits the people of Providence. According to the conventional wisdom, new downtown developments will mean millions of dollars in new tax revenue trickling into City coffers, reduce the tax burden on the City at large, pave our streets and fix our schools. (And as such, they're to be lauded and prayed for. Shovels in the ground and piles being driven are the highest ends of municipal governance.)
We question that conventional wisdom. We don't believe that these new construction projects are usually bad – but we don’t think they’re a panacea either.
Over the life of their tax breaks -- some ten years, some twenty –- these projects will pay taxes at about half the rate of properties that aren't getting breaks. (Like your house and our houses.) We believe many of these tax breaks are justified, and are necessary to encourage development. But new projects don’t come without new costs – they mean more wear and tear on our roads, more strain on police and fire departments, and more work for the public works department and city planners. While they have their tax breaks, some of these projects will pay more to the City than they cost in new services – some might not.
So for the next ten to twenty years or more, the projects getting tax breaks won’t mean much new money for the City to spend. That's very well for the Providence of 2020 – and its empty-nesters and commuters to and from Boston. But need we forsake the people of the Providence of 2005, where schools crumble, 40 percent of children live in poverty, housing costs rise, and decent jobs are hard to find?
We think not. As we plan for Providence’s Golden Age, we should thank city councilors of yesteryear for planning for the Age of the Tax Break –- for devising First Source in order to provide for Providence's sustenance through the creation of good jobs -- even while the City incentivizes projects by conceding tax dollars, as it sometimes should.
This month, we will offer an amendment to the proposed budget to include full funding of First Source -- but as a legislative body, we can do only so much. We urge the Mayor to accept our amendment to fund First Source, and to implement a plan for its complete enforcement –- inlcuding a full-time staff to put it into practice -- to ensure that new development provides the maximal benefit to the people of Providence and that the downtown renaissance also becomes a renaissance of the neighborhoods.