Monday, February 4, 2008

More on the Mandatory Paid Leave Bill and the Government-financed Nationals Stadium

My recent post on the The Accrued Sick and Safe Leave Act of 2007 took a spin on the Eckington Yahoo! listserv. Former ANC Commissioner Kathy Henderson (who lives about a mile east of North Capitol Street) responds:

Private employees should have paid annual and sick leave. Arguments against such modest benefits are unfair to our citizens and belong in the same category as arguments against raising the minimum wage. There is no such thing as employees that do not get sick; said employees may not take time off because they cannot afford to miss any time from work. I am with Stacie; I would rather see sick employees stay home and convalesce rather that coming to work and possibly infecting others because they cannot miss a paycheck.
Are you familiar with the legend of the boiling frog? In the 1800s, a science experiment found that if a frog was placed in cold water, and the water temperature was increased in very small increments, that the frog would boil to death before jumping out. The legend reminds us that we ought to beware of incremental changes that creep up on us slowly.

Small and moderate-sized businesses are the frog here. They aren't going to stage a big walk-out to protest mandatory paid leave. The cost in time and lost business to mount an opposition effort isn't in the cards. And after all, they will look heartless, and that's bad for business. And so this new regulation will be passed, and it will be added to the large mountain already present. Small businesses will soldier on.... until they finally decide it's time to leave town.

The District is burnishing its reputation as a jurisdiction hostile to business prosperity. Government by nature is always on the prowl to do something, to solve problems even when they aren't the pressing ones. That's how many politicians get elected: spend more money on this, impose another regulation on that.

As a result, our freedom is incrementally diminished in exchange for promises to solve all the latest issues. It's easy to impose mandates on businesses-- sure, let them figure out how to make the latest government edict work with the financial balance sheets (which lead to yet another consideration: what about time consumed by maintaining paperwork to comply with the law)?

Finally, the timing of this "compassion" is poor: most believe that we are in a recession or about to head into one. This is not the time to create hurdles to job creation. The bottom line: Shouldn't we concentrate on attracting businesses to North Capitol Street? There aren't many area businesses available to impose this regulation on in the first place.

In response to another posting, I cited the publicly-financed Nationals baseball stadium as an example of corporate welfare. Henderson again:

Regarding the baseball stadium, only businesses earning five million dollars or more in annual revenue were assessed the special tax to pay for the stadium. Most of these businesses are K Street law firms, which the majority of DC citizens do not patronize. Yes, DC is paying for the infrastructure improvements, which come from Federal Highway Administration funds and very few if any local dollars. Contrary to what some believe, citizens are not paying for the baseball stadium. Corporate welfare does not seem like a fitting term for the stadium funding since many business eagerly purchased their sky boxes in the first stages of the project. Don't forget the annual revenue the city will receive from the stadium lease agreement.

Finally, some will continue to debate the merits of the stadium project up to and beyond opening day next month and the argument that it cost too much has merit. However, this major development project clearly revitalizes what was a blighted industrial eyesore of an area. The projected tax revenue from the new development, including housing, retail and other leased space will offset project costs over time. We should be focusing our ire on the Office of Tax and Revenue former employees that stole money we will never see again.
I am not an expert on the stadium financing, but I have been reading about studies showing that the purported public benefit gained from stadium-financing deals like this rarely materializes.

I couldn't find any information indicating that Federal Highway Administration funds are being used to finance the stadium-- that would be a porkbarrel project. I imagine that any such funds are being used to support changes to area roads to facilitate traffic in the area of the stadium. Does anyone out there know?

So Kathy has clarified that taxpayer income tax money is not being used for the stadium, but corporate tax money is (and the corporations will pass the costs on some way, the money doesn't come out of thin air). Again, this appears to boil down to another case of robbing Peter (the 1% taxed corporations) to pay Paul (the Nationals). Sure, corporation Peter is getting fleeced this time, but "his" time will come, at the taxpayers' expense. Maybe those corporations purchased the skyboxes in part for the benefits of a fancy venue for throwing parties or fundraisers for federal and local politicians.


Mari said...

Ah the road to hell is paved with such good intentions. The problem with laws and regulations like this is that they make jobs more valuable and harder to get because the price for the employer is higher. And the job is too valuable to be wasted on the unskilled, the formerly incarcerated, the uneducated, and others who are hard to employ. So over time we can expect to see higher unemployment rates for the poorest DC residents, more people working under the table, and fewer small business hiring.

Anonymous said...

All in the name of profit... sad. No wonder people are so disengaged in their families and communities, and still enable to pay their medical bills. A couple weeks a year is really not much for a break. Kris, how many days did you ->actually<- worked 8 hours in 2007?

Anonymous said...

Kris wrote: "I am not an expert on the stadium financing, but I have been reading about studies showing that the purported public benefit gained from stadium-financing deals like this rarely materializes."

I'm sorry Kris, but do you remember what Chinatown looked like before MCI (now Verizon) Center was built? The revitalization and build up in that area are astounding in comparison to the abandoned, burned-out, crime-ridden wasteland it used to be. Yes, MCI was mostly privately funded, but does that change the fact that the surrounding area (for blocks in any direction has benefited? High rise condos and apartments, restaurants, businesses are everywhere now in an area that you once rolled your windows up and locked the doors to drive through. Does not all of that greatly benefit the city in the way of property and sales taxes? Why is it so hard to believe that that Nats stadium could possibly do the same?

Kris Hammond said...

Hi PeteDC,

The area surrounding the stadium will likely improve, although the MCI/Verizon Center is geographically different (center of the city rather than on its edge).

But more to the point, you write that "MCI was mostly privately funded." Therefore, the MCI Center is an apple and the stadium is an orange. The issue is whether the benefits to the government and residents from the stadium will outweigh the enormous government subsidy (up to $700 million now?).


Kris Hammond said...


Profit is the goose that lays the golden eggs. Stop strangling the goose, and we'll all enjoy more golden eggs.