Sep 21 2007
Fat-Cat Welfare Board Tired of the Whining
Friday, September 21, 2007
“Chronic bellyaching” really gets on Jimmie Thorns’ nerves.
So let us join in the bellyaching right away.
The object of Thorns’ ire is the Bureau of Governmental Research, which has been complaining for a long time about the huge tax breaks that go to well-heeled developers.
Thorns is an appraiser and chairman of the city’s Industrial Development Board, which is too free-spirited to bother with such mundane considerations as need, or potential public benefit, when it strews our money around.
BGR has been calling for some criteria to be established, and IDB had been promising to establish them for ages. But it never seems to happen. “We’re working through policies and procedures, but BGR is just a big distraction,” Thorns said the other day.
In a sane world, Thorns’ views on the BGR would be of no consequence. In a sane world, the chairman of the IDB would be above any suspicion of self-dealing. That would let Thorns out.
After the IDB voted for a bond issue to benefit developers of the old St. Thomas housing project site in 2003, for instance, it came to light that they had handed Thorns a contract on the side for $15,000.
Although the project would not have been approved without Thorns’ vote, the courts declined to put the kibosh on it.
This must have emboldened Thorns, for this year he accepted a $500,000 contract from the Housing Authority of New Orleans, which had 19 applications for tax abatements pending before his board. Ethics board attorneys opined that Thorns’ contract was within the law, which, though forbidding incestuous alliances with commercial outfits, fails to extend the prohibition to government agencies.
That is an oversight the Legislature needs to correct, but Thorns would not have accepted the contract in the first place had he been as keen to observe the proprieties as a public official should be. When HANO is seeking favors for its private-developer pals, the board chairman needs to be free of any suspicion that he has been bought. Thorns is no less compromised because the statute is deficient.
The BGR bellyaching that bothers Thorns is not about his integrity but the haphazard manner in which his board hands out the moolah. “While the tax subsidies are granted in the name of economic development, they are in fact awarded in New Orleans on an ad hoc basis through incoherent, arbitrary systems,” BGR said in a press release Monday, calling for a moratorium until “policies and procedures” are in place.
The next day the IDB approved applications for another $1 billion.
Thorns argues that whatever is lost in property taxes through his board’s generosity is more than made up by extra revenues for sales and other taxes. Here he is working hard for the recovery, and BGR keeps whining about fiscal responsibility. “It’s pathetic. BGR should close its doors and get out of the city,” he says.
Developers would also like to see that happen, for they are buzzing around the IDB honeypot in unprecedented numbers. They wish to bring the citizens of New Orleans the benefits of, say, a luxury apartment complex, a hotel or a parking garage, but, alas, it is impossible without a tax break. So they get it in the name of the public interest.
You won’t go far wrong if you view anything said by developers and city officials with the gravest suspicion, or even do a little bellyaching.
No tax breaks should be granted unless it can demonstrated that the project would not otherwise get off the ground and it is likely to produce significant economic benefits. You can’t blame developers for grabbing every dollar that is available to them, but the taxpayer is entitled to oversight from a board with firm criteria for assessing the wisdom of giving tax revenues away.
Right now, IDB tax breaks amount to welfare for fat cats. Local government gets stiffed and a heavier tax burden is imposed on smaller businesses that face the higher post-Katrina expenses routinely cited to justify IDB’s largess.
BGR’s modest suggestion is for a “rational, focused” approach, which the City Council and the IDB have long promised. The only chance we have of making them deliver is to bellyache ourselves hoarse.
Source: The Times-Picayune
Filed under: Good Governance
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