Monday, December 22, 2008

Is This Really Stimulus?

The Post wrote a short article on County Executive Ike Leggett's stimulus proposal on Friday. But in scrutinizing the details, we have yet to find where the "stimulus" is!

Here are the eleven components of the proposal from the county's press release:

1. Increase Local, Small Business Reserve Program (LSBRP) gross annual sales thresholds for local small businesses in the wholesale, retail and services sectors to $5 million from the current levels of $2 million for wholesale businesses or $2.5 million for retail goods and non-construction services, and to $14 million from $7 million for construction services and manufacturing. Also proposed is to increase the employee complement limits from 15 to 30 for wholesale and retail businesses, from 20 to 40 for manufacturing businesses, and from 25 to 50 for businesses in the service and construction sectors.

2. Increase the required percentage of Local, Small Business Reserve Program (LSBRP) participation in annual contracting from the present level of 10% to 20%.

3. Generally, delay up to 18 months, the effective dates of new legislation and regulations that have a substantial economic impact on business.

4. Allow, upon request, deferral of payment of permitting fees and impact taxes for a period of up to twelve months from their current due date.

5. Increase permit application expiration period to eighteen months for those permits associated with new residential and commercial construction.

6. Increase expiration period for inactive building permits to twelve months.

7. Extend the validity period for existing Adequate Public Facility reviews from five (5) years to seven (7) years.

8. Provide an economic and fiscal impact analysis as part of any legislation or regulatory change. The analysis to include an assessment of the impact on both the County and the parties being regulated.

9. Unbundle large County contracts. County requirements that have traditionally been bundled together for administrative and cost savings benefit should be scrutinized as candidates for unbundling.

10. Create a Local Business Networking Forum to provide networking opportunities for small businesses to connect with potential partners.

11. Hold business fairs in the evenings and/or weekends at several county locations, such as the Regional Services Centers. Limit participation to small businesses with annual revenue of $5 million or less.
Items 1 and 2 are legitimately helpful since they steer more money to local and small businesses (although perhaps we should have been doing this all along). But can anyone tell me which of these other measures actually create jobs? Item 4, which delays impact tax payments, may actually slow down the county's ability to build roads and schools. Item 7 prolongs APF reviews for development projects, enabling a developer to sit on a project longer and perhaps leading to delayed construction. Item 8, requiring fiscal impact analysis, is already essentially performed by county staff on new bills. And items 10 and 11, which set up networking forums and business fairs, are already performed by the county's Chambers of Commerce. Not a single new job will be created by Items 3 through 11.

The County Council has already moved on real stimulus by jump-starting a number of state projects through issuing liquor bonds. Further borrowing to finance transportation work would lead to more job creation and more long-lasting investment than any of the items above. (Perhaps the county should start by resurfacing the streets in the neighborhoods destroyed by WSSC.)

And finally, this proposal double-crosses the county's workers. The school employees just gave up raises totaling $89 million for the purpose of deficit reduction. Instead, most of that money will now be used to finance the above package that will cost $50 million in delayed revenues according to the Post. Lost employee raises will definitely have a negative impact on the economy, and now they will be replaced by a costly "stimulus" proposal that may not create a single new job.

Deferred revenue, little or no job growth and wasted county employee wage concessions. I guess I have to give this proposal credit for one thing: multi-tasking!