Sign up for our free newsletter
The Washington D.C. Economic Partnership, a non-profit that helps market the city to businesses and investors, has been through the ringer lately. The Mayor’s 2012 budget cut its allocation in half, to $500,000, requiring intervention from Councilmember Jack Evans to secure a temporary fix, which prevented the organization from dissolving completely. Now, it seems like the Council has hit upon a more permanent solution: Raising taxes on “transfers of economic interest.”
What is that, you ask? Well! When a corporation sells part of itself, the city takes 2.9 percent of the value of the assets transferred if more than 80 percent the corporation’s assets consist of real property located in D.C. and/or more than half of the controlling interest of the corporation is being transferred. A bill introduced today would increase that tax rate to 3.25 percent, with a couple of exceptions.
The funding will fluctuate, but WDCEP CEO Steve Moore says he expects the tax hike to get funding back up to $1.2 million where it was before, with corporate sponsorships raising another $500,000 to $800,000.
Will this impact you? Probably not at all, unless you’re in the business of selling very large businesses or properties. But it is an interesting step, given the fact that D.C. is now the hottest real estate market in the country: Do we really need to be funding an organization whose functions are or could be replicated by the city’s Deputy Mayor for Planning and Economic Development, the Business Improvement Districts, the Chamber of Commerce, and many business associations?
The Partnership’s two big events are running the booth at the annual International Conference of Shopping Centers in Las Vegas—-which the mayor, deputy mayor, and many councilmembers attend anyway—-and the Annual Meeting and Development Showcase, which is just one of many opportunities for developers, businesspeople, and government folks to rub shoulders. The WDCEP puts together a lot of data on neighborhood demographics and industry sectors, and tours interested retailers and investors around potential development sites, but the BIDs, Main Streets, and deputy mayor’s office do that as well.
Oh, and according to the WDCEP’s 2010 tax filings, Moore makes $203,000 (he took a $7,000 pay cut that year), which is well north of the deputy mayor himself.
All in all, $1.2 million is not a lot of money, and this is a relatively painless way of getting it. But it does seem that more could be done with less.