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Grosso opposes additional incentives for Amazon HQ2

For Immediate Release:
April 5, 2018
 
Contact:
Matthew Nocella, 202.724.8105 - mnocella@dccouncil.us

Grosso opposes additional incentives for Amazon HQ2

Washington, D.C. – The following is a statement from Councilmember David Grosso (I-At Large) on the District of Columbia's bid for Amazon to establish their second headquarters in the city:

"In recent months, the District of Columbia has engaged in a bidding war to curry favor with Amazon, seeking to entice them to establish their second headquarters, HQ2, in the city. Advocates for aggressively pursuing the internet behemoth tout the jobs, tax revenue, and prestige that would accrue to the District should we be picked. I certainly understand those arguments and would welcome Amazon to join our strong business community. But, the current state of the chase makes me wonder: at what cost?

"One of the most troubling aspects of the hunt for Amazon has been the opaqueness with which D.C.'s bid has been developed. Our open government laws and local reporting have made D.C.'s offer partially public, though highly redacted. Most of what the public can see are pre-existing incentives available to most businesses seeking to set up shop in our city. One could reasonably presume that the large black boxes in the bid shield the Mayor's offer of millions of additional public dollars in incentives that would require approval from the D.C. Council. It is problematic, then, that such details have not been proactively shared with me and my colleagues.

"The secrecy shrouding the bid is frustrating but so are the implications providing such incentives has for our responsibility to meet our residents' needs. Every year during the budget process I hear warnings from the District's Chief Financial Officer or some of my colleagues that though the city is in a strong fiscal position we cannot always expect it to be that way. This argument is generally used to discourage additional investments in human services, affordable housing, and even education. I worry that draining city coffers to bring Amazon here would intensify the calls for restraint in the investments that directly impact our residents. And while there is no doubt that Amazon could increase the tax revenue which could be redirected into city services, history tells us that will not happen. I worked as a staffer for the Council's Committee on Economic Development when we began revitalization. We made that same promise back then and yet we consistently fall short of fulfilling it.

"Instead of attracting outside entities with untold resources, we could be boosting the District's local business community, one that includes a flourishing technology industry. These small tech startups could benefit from the same incentives as Amazon. Such an investment would be spread across the city, rather than a centrally located HQ, cultivate homegrown businesses, and promote competition. Stacking the deck in favor of one large player could have the exact opposite effect.

"The District of Columbia is a great city to live and work in, with new people and companies flocking here daily. It is attractive in its own right. Though the benefits of Amazon choosing D.C. for its new home are not in doubt, the benefit of bending over backward to lure it here–at the expense of our current residents and local businesses–is. That is why I cannot and will not support any additional incentives to bring Amazon's HQ2 to D.C."

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Grosso sends follow-up questions to DHS on closure of D.C. General

On March 28, Councilmember David Grosso, a member of the Committee on Human Services, sent follow-up questions to Department of Human Services Director Laura Zeilinger after the Committee's March 28th hearing on the closure of D.C. General Family Shelter.

UPDATE 4/11/2018: DHS submitted responses to Councilmember Grosso., which can be found below, along with the original letter from Councilmember Grosso that was sent on March 28. 

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Council Budget Office releases Economic and Policy Impact Statement: Approaches and Strategies for Providing a Minimum Income in the District of Columbia

On Tuesday February 27, 2018, the Council of the District of Columbia's Office of the Budget Director released a report on the feasibility of a public program which would guarantee that every resident has enough resources to meet their basic needs entitled Economic and Policy Impact Statement: Approaches and Strategies for Providing a Minimum Income in the District of Columbia.  This report was prepared at the request of Councilmember David Grosso and Chairman Phil Mendelson and is the second report that the Budget Office has prepared under D.C. Council Rule 308. The first such report was on the Universal Paid Leave Amendment Act, which is now law.

Four documents are linked below and can be found on the Council’s website:

From the Council's Budget Office:

This report offers the Council an evidence-based resource for weighing this proposal’s policy implications and economic costs and benefits.   The study is divided into three sections:

  1. An analysis of D.C.’s cost of living versus the social safety net benefits available to low-income households.
  2. A discussion of three methods for providing a minimum income: a negative income tax, a guaranteed minimum income, or a universal basic income.
  3. An economic analysis of a minimum income program’s impact on the D.C. economy using REMI, a widely used economic forecasting model.

The report confirms that it is very difficult for low-income households living in the District to make ends meet. The public social safety net provides enough resources for some, but not most, low-income households to meet their basic needs. 

  • The estimated level of income that three, typical households in the District would need to pay for their basic necessities absent government benefit programs is higher than the current minimum hourly wage of $12.50.   The income levels are as follows:
    • Single adult:  Annual income of approximately $36,988 or an hourly wage of $17.78. 
    • Single parent with one child: Annual income of about $66,113 or an hourly wage of $31.79.
    • Single parent with two children: Annual income of roughly $96,885 or an hourly wage of $46.58.
  • A prototypical single, working age adult without a disability whose earned income falls below the Federal Poverty Level would not be able to meet their basic needs even if they received all the public social safety net supports to which they are eligible.
  • The existing social safety net is robust enough to allow a prototypical extremely low-income single parent with one or two children to meet their families’ needs, assuming they can access all the public benefit programs to which they are eligible (including a housing voucher). It is important to note that eligibility for a safety net program does not guarantee receipt of the benefit.  

The study forecasts economic conditions under four possible minimum income scenarios relative to a projection of the conditions if there was no change in policy. The study predicts that a minimum income program would negatively impact economic growth, although the magnitude varies greatly depending upon the program’s design.

  • Raising households’ income to 100% of the Federal Poverty Level is likely to have a relatively small negative impact on the District’s economy and labor force. It would cause the D.C. economy to add 1,600 to 3,000 fewer jobs and increase GDP by $99 million to $185 million less over the next ten years than otherwise projected.
  • Raising households’ income to 450% of the Federal Poverty Level—roughly D.C.’s cost of living—could have major implications for the District’s economy and tax base. It would reduce the number of jobs in D.C. held by residents by 101,000 to 138,000 over ten years. The District would likely forgo about $2.6 billion each year in federal payments and grants. Such a program could increase local expenditures by $7 billion to $9 billion per year, essentially doubling the District’s current local funds budget.

 

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DHS responds to Councilmember Grosso's concerns over D.C. Healthcare Alliance

Earlier this month, Councilmember Grosso wrote to the Department of Human Services raising concerns that individuals were being denied eligibility to the D.C. Healthcare Alliance program based on their immigration status, which he believes should not be relevant to the determination of their eligibility for the program.

For the particular issue that the councilmember raised, DHS informs him that they are in the process of considering precisely how an asylum seeker on a tourist visa may prove thier intent to reside in D.C. to make eligibility for the program.

You can read the full letter from Councilmember Grosso, and DHS's response, below.

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