Change DOZ To a ROZ - It'll Smell Better

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The State legislature’s budget writing committee, Joint Finance, voted to support the creation of a Development Opportunity Zone (DOZ) for Janesville. The DOZ legislation was heavily lobbied for by the local special interest group Forward Janesville. It is meant to grant businesses willing to enter the Janesville market up to an $8,000 per employee state tax credit from a pool capped at $5 million for the creation of sustainable jobs in the area. Not one Republican voted for it. In fact, after the budget rolled out of the finance committee, this is what some GOPers had to say.

Fitzgerald Excerpt:
Along with the bill’s tax and spending increases are a host of non-fiscal policy items that the Democrats slid into the budget to avoid public debate.

Vos, Montgomery, Darling, Olsen Excerpt:
Despite the fact a recession has already stretched thin Wisconsin middle class family budgets, Democrats followed Governor Doyle’s lead by loading up the state budget with billions of dollars of brand new expensive spending commitments.

Like the $5 million commitment to Janesville perhaps? I'm not trying to fool anyone here, if state GOPers stand for anything in the budget, they stand for corporate welfare in the form of any kind of a business tax break. The DOZ aptly fits that description. Yet it goes without saying that during a time of an excessively large state deficit, someone will have to compromise for the tax credit with a tax increase elsewhere. It could generally be perceived that the jobs created will produce some state tax revenue in return, but Republicans don't compromise - they take no prisoners in their private little war - and so far, they're still losing.

Leave it up to legislative Democrats to be the first to drop their ideological hang-ups during this time of crisis. For that there is reward. While State Republicans continue on with their partisan assault against solutions and ideas to our national crisis, Democrats are leading the way legislating “yes we will.”

However, with that said, the Development Opportunity Zone(DOZ) promoted by Forward Janesville (R) and sponsored by Mike Sheridan(D) and Judy Robson(D) is a trickle-down program – (and) referring to a large business tax credit as a “bootstrap” program is a poor way to democratize its inception. Robson's description should at minimum garner a chuckle or an eye-roll or two from those who know better.

On the surface, the DOZ looks good and is a timely piece of legislation that just might help turn things around for the xtra-depressed Janesville area – providing it has a functional targeting mechanism. Plus, the sponsoring legislators it seems, have pulled this off without earmarking the first $5 million of the effort towards a DOZ feasibility study. Those I would admit are the pluses.

Now that we got that out of the way and assuming the budget is passed by both state houses and signed by Gov. Doyle, the program will need to be strengthened with strict district boundaries to make sure it’s not misused by Janesville officials. By this I mean, not one penny from the DOZ fund should be spent to point business activity away from Janesville’s downtown or the city’s older business corridors. And the only way to accomplish this is to ban it from being used as a credit or down payment in and around Janesville where business never existed before in the first place. Green field locations and businesses that have negotiated large local hand-outs and sweetheart deals ($1 parcels, TIF's and forgivable loans) must not be allowed to double-dip into the DOZ thereby taking precious dollars and opportunity away from promising new entry start-ups. That may seem self-defeating, but it's the only way forward if the sponsors are serious about job creation. Legislators must take extra precautions to insure the tax credit meets specific goals and targets and because the program funds are finite, it's boundaries and rules should be spelled out in plain English.

Sheridan, Robson Excerpt:
“In a tough, transitional economy this benefit will attract new businesses and much-needed jobs to Janesville. We can’t afford to wait for this economy, or the manufacturing industry, to turn around while families struggle to put food on the table.”

This may all sound elementary, but it’s doubly important to keep in mind that the 12-plus percent and climbing unemployment rate is a direct reflection of businesses and factories vacating the inner city – not because the city doesn’t give enough away in tax incentives to induce sprawl. In case you hadn't noticed, there is zero unemployment out in the green fields and farmland hugging Janesville. If the policy writers and legislators are looking into the fringes to help decide where to draw the boundaries for the DOZ, I’d be the first to kindly ask them to please ‘turn around.’ Janesville planners have a long and successful history of displacing economic growth from the city's inner core and have abused every tax incentive tool they’ve been given for economic development. There is no reason to believe Janesville officials would implement the DOZ to recreate employment where it was lost. The city's historical growth pattern over the past thirty years firmly proves this point.

And don’t think because Janesville has a new city manager that things are any different than before. By the looks of things after six months, his administration is just a continuation of the old administration.

So for starters, it is my humble suggestion that the DOZ program for Janesville be relabeled as the (Re)development Opportunity Zone, or Re-DOZ or ROZ. This would send the right message to the local bureaucrats that the tax credit is meant for specific areas of the city that have physically lost large numbers of workers – not for city hall insiders or areas that happen to fit the city administration’s version of it. Secondly, Gov. Doyle should remember how the Janesville city council ignored his plea for the council to put more thought and time into the city's comprehensive growth plan before they voted to approve it. This may be the Governor's only opportunity to put more than just words behind his position to make sure this stimulus tool does not afford misguided local planners more fuel to accelerate inner-city blight. Other city's might be different, but if the DOZ boundaries and targets are left at the discretion of Janesville city planners - there is good reason to believe it will be abused.

Obviously, Sheridan and Robson are elected officials who no doubt believe they are looking out for Janesville with the implementation of the DOZ, for that they should be commended. But they must not forget that Forward Janesville is a private special interest group that does not have the same sense of selfless public duty. They have gone on record that they are looking out only for themselves.