City must level tax breaks for developers
Vennicia Kingston and Jose Marcano Guest columnists Recently, state leaders named racism as a public health threat, and even closer to home, the City of Providence released a comprehensive report on systemic racism in our city. It’s encouraging that leaders are looking for ways to tackle historical inequities baked into our policies and underwritten by our tax dollars. One clear next step for Providence city councilors to take: ensure a more equitable Providence by reforming how the city approves tax breaks for developers.
The Providence Tax Stabilization Investment ordinance would standardize the processes for future tax incentives for developers. Along the way, the reform would simplify an often convoluted, opaque process and add needed transparency by clearly defining the requirements that all developers must follow to get a tax break from the people of Providence. The proposed legislation’s appeal is that it not only protects the city’s financial interests, but also encourages new development by creating a system that’s more predictable, measurable, and accountable.
Another benefit of the proposed ordinance would be to ensure those who have historically been left out of development projects have a fair shot at new economic opportunities. When you look at Providence, you can see new apartment buildings, hotels, and other construction projects cropping up left and right – a positive sign of growth and local economic development. The problem? In addition to being complicated and confusing, the current tax policy leaves too much to chance when it comes to creating on-ramps for minority- and women-owned businesses and workers to share in the prosperity.
Language in current tax stabilization agreements (TSAs) require recipients to make 'good faith efforts' to award to Minority Business Enterprises (MBEs) and Women Business Enterprises (WBEs). That’s simply not enough. We should set standards for inclusion and diversity in contractors and stipulate clear reporting guidelines to ensure transparency. TSAs with strong diversity and inclusion language can be a smart way for communities like ours to set fairness standards and ensure those who have historically been excluded from economic opportunities can reap the benefits of large-scale construction projects that stimulate the economy.
And it’s not just minority and women-owned businesses who would benefit; workers would make gains under the new regulations as well. Without strong oversight tools, recent data suggests many contractors who received tax breaks are committing wage theft by misclassifying workers and shaving off payroll expenses to the tune of hundreds of thousands of dollars. This not only hurts individual workers but short-changes Providence residents as well. Under the new law, developers would be required to pay wages that follow industry and area standards during construction and beyond, ensuring family-sustaining wages to the workers building these projects and to the workers employed in them after construction. Some contractors are tossing out arguments that these new reforms would harm businesses owned by women and people of color. They know that if TSA reform goes through, they’ll need to follow city requirements and pay fair wages, which will eat into their already exorbitant profit margins. In fact, the proposed legislation would level the playing field, uplift all workers — especially workers of color, and establish requirements to contract with women and minority-owned businesses.
As business owners and community leaders in Providence, we know that running a profitable business and uplifting our community doesn’t have to be in conflict. Everyone wins when the rules are clear and fair and when those who benefit from development are rewarded but also are held accountable.
Vennicia Kingston is the owner of Eagle Eye Post-Construction Service. Jose Marcano owns Jomar Painting.