Monday, May 28, 2007

Paved With Good Intentions

In Washington state they have more money than sense (and not for the first time):

OLYMPIA -- Washington's largest job-development program, touted by state lawmakers as a way to create "family-wage" jobs, is spending millions of dollars to attract employers that hire low-wage workers.

In many cases, grants were given to projects that provided no information about job creation. In other instances, local communities seeking aid listed the number of jobs expected, but state officials did not vet the information.

...."This isn't a worthwhile expenditure of money," said Rep. Hans Dunshee, D-Snohomish, vice chairman of the House Appropriations Committee. "The attempt was to get at lifetime employment, real jobs that you can have a family on. Obviously, I don't think it succeeded."

But the cities getting the money argue that retail development will boost their economies, attract new industry and lead to better-paying jobs in the future.

The Legislature has pumped about $100 million in tax dollars into the Job Development Fund since 2005, including almost $50 million in the state construction budget signed by Gov. Christine Gregoire this month.

Projects benefiting from public funding include a Cabela's sporting-goods store in Lacey, a Costco store in Covington and a waterfront commercial development in Wenatchee. Those three projects alone account for more than $21 million in expected state spending.

....The Legislature set up a statewide competition to vet projects and required the Community Economic Revitalization Board (CERB) to oversee the process.

But, there were more important things than creating jobs:

The board winnowed the proposals using a formula that scored projects on such criteria as how much tax revenue they'd generate for the state and local governments, and how many jobs they'd create. A dozen finalists were identified in 2006. The Legislature reviewed the list and approved the spending last month.

The formula, created by CERB and its staff, put more emphasis on "return on the state's investment" than on creating family-wage jobs.

It weighted family-wage jobs at 7 percent. Tax revenues, including sales and property taxes, were weighted at 12 percent. The overall "return on the state's investment" -- which included private investment and expected tax revenue -- was weighted at 30 percent.

"I came to find out that, despite its title, which is job-development fund, they weight tax more heavily than jobs," Gregoire said. "I think that's reverse in terms of priority."

In addition, CERB Chairman Tom Trulove, an economics professor at Eastern Washington University, said his board didn't have the staff to adequately scrutinize the projects. "You just had to accept that the project proponents were telling the truth, and accept their numbers, and go with the basis of what you saw," he said.

Trulove said he believes the projects are worthwhile, but "if we were to do this again, we certainly would give a lot more weighting to jobs."

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