Tuesday, November 12, 2013

Commentary on Local Hiring Ordinance

Whereas, the City of Plainfield is an older urban municipality, a designated Urban Enterprise Zone, federal Historically Underserved Business (HUB) Zone, and an Abbott School District with the demographic and infrastructure demands that require the strategic investment of resources to create a competitive workforce and to encourage private investment;

So begins Ordinance MC 2013-17, which is up for approval on first reading tonight (Tuesday).

What do these three designations mean, and what is their implication for Plainfield's future?

Urban Enterprise Zone
This designation dates back to 1985. It permitted certified retail businesses within specific boundaries to charge only half the state sales tax as an inducement to buyers. The collected sales tax was banked for draw-down by the municipality for improvements within the zone. In Plainfield, the UEZ includes the downtown as well as the South Avenue business district. Owners were supposed to hire new employees, but in Plainfield there were many sole owners or mom-and-pop operations that could not expand staff. The city also suffered a major loss of sales tax revenue when the Macy's store downtown closed about 20 years ago.
A study released in 2011 found that for  every dollar of state investment in the UEZ program, the return was only eight cents. Participation was also lacking, and based on the exhaustive findings in the report, the program was shut down with just certain features retained. Balances in the sales tax fund were turned back to municipalities for local administration..
Historically Underserved Business Zone
Even as a longtime reporter, I was not familiar with this term. I found out it involves the Small Business Administration and SCORE, a counseling agency staffed by retired executives, in assisting entrepreneurs.
For comprehensive information, click here.
Two Plainfield locations are listed in the report, one being the Plainfield Public Library, which recently opened a job center, and The Incubator at 320 Park Avenue, which houses SBA and SCORE offices.
Abbott School District
Plainfield is one of about 30 school districts that receive special state aid as "poorer urban districts.". Read the history of Abbott schools here.
While neighboring suburban districts pay roughly 80 percent of school costs from property taxes and receive around 20 percent in state aid, Plainfield had the opposite ratio for many years. The state began taking a tougher stance on Abbott districts in 2006 (see post here) and more recently began increasing the amount local taxpayers must pay for schools in 2008 (click here), while still giving massive amounts of aid. Opponents say the state aid formula is not bringing about the desired improvements in urban school and suburbs are being short-changed.

Jobs and Plainfield's Future
Looking at all this history, it appears that Plainfield has projected an image of great need for special breaks, but things have not turned around as hoped even after several decades. With a new administration, there is hope for new strategies.

Regarding a quota imposed on contractors for local hires, the question may be whether the city is the agent to make jobs happen or whether the job development agencies in the city are the tool. A person who acquires skills need not make Plainfield's six square miles the boundaries of opportunity, given the rail, bus and highway access to three counties and beyond.

At the same time, maybe some City Hall energy needs to be directed more towards filling up the sites identified here and let economic nature take its course, rather than try to put contractors on the hook and create a new bureaucracy to monitor them.

For eight years, the city has placed the responsibility for economic development in a mid-level division. Mayor-elect Adrian Mapp says he will establish a cabinet-level post for economic development. A well-qualified person will be able to analyze Plainfield's current state of economic affairs and discern how the city comes across to potential partners for future success. There is also the benefit of a recent economic development study led by Dr. Roland Anglin and the recommendation for a follow-up process to establish a written plan for "Plainfield 2021" to guide the city's future economy and quality of life.

Whether or not Plainfield is a poor and needy city, state government is saying the UEZ and Abbott initiatives are not producing the desired changes and the city must take more responsibility for its own future. Federal programs may follow suit, so the sooner the city can find its own cures for adversity, the better. It is up to the governing body to decide whether a local hiring program is part of the solution or an ill-advised stopgap measure that will deter contractors from doing business with the city.

The City Council will hold its agenda-fixing session at 7:30 p.m. tonight (Tuesday) in Municipal Court, followed by the regular meeting at 8 p.m.

--Bernice
  

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