Rachael's Public Finance Blog

A $2 Billion Question: Did New York and Virginia Overpay for Amazon? It's no secret that in order to secure new business, and as a result, jobs, states and municipalities both offer up various incentives. Recently, the most public example of this has been with cities competing to recruit Amazon's new campus. I found the most interesting element of this article to be the influence of the billion dollar incentives in Amazon's decision- or rather, the lack of it. As the article explains, money didn't talk, but resources did. The decision really came down to where labor was, and where transit is. And hindsight makes it easy to see that this was always what they wanted. While logical, it seems unfair to have put the midsize communities through the ringer, as they spent hundreds of thousands of dollars in courting, only to have never had a chance.

A Big Tax Break for Socially Responsible Investing Opportunity zones have recently been pushed as a development incentive, hoping to spur capital investment in underserved areas. They work in an interesting way- investors use their "embedded gains" by reinvesting the profits into opportunity zone funds. The longer they maintain the investment the larger the tax break that they will receive- from 10%, to tax free if it lasts for 10 years. However, there are risks involved. Some investors hesitate, wondering if they would get money out of the areas in which it was placed. Additionally, there are concerns about tracking the progress in an initiative with no background. Others hesitate based on questioning how it will benefit the community. Those who seek to be socially responsible, in particular, want added layers of diligence in order to be sure that the area is truly low income, or will see a community change for the better. The regulations for these areas are not yet ...

California Midterm Results: Funding for Affordable Housing and a Rent Control Defeat The nation just went through a tumultuous election day, the results of which are still in flux, nearly two days later. However, some things were definitively decided, including ballot measures across various states. In California, some important measures were voted upon regarding housing, including four different bond measures. Proposition 1 was for a $4 billion dollar affordable housing bond. The bill would provide subsidies for 30,000 families, 7,500 farmworker households, and assistance to homebuyers and loans for veterans. The bill would come to $170 million for the next 35 years. Proposition 2 was the Homeless Housing Bond of $2 billion dollars. It would support 20,000 new housing units for those in need, at $120 million a year. Interestingly, this bond would use revenue from a special income tax on millionaires, which already pays for mental health services. Both of the bond measures pa...

Where 'Yes! To Affordable Groceries' Really Means No to a Soda Tax In Oregon and Washington state, several initiatives are up for a vote. These initiatives set out to preemptively ban any taxes on the food and drinks in these states. And while this sounds appealing to voters, there is a shadowy undercurrent- the soda industry. A growing movement for soda taxes across the country- and even internationally- has made many companies nervous, and as a result, they've taken action, insidiously inserting themselves into democracy. Obscuring the issue, and their involvement, millions of dollars in funding have been thrown at these causes. The industry can't stomach the idea of progressive states catching on, and losing huge portions of their market. There's no excusing this lack of transparency, however. Especially in the face of the funding, where in Washington, those against the ballot initiative had raised a paltry $100,000 to the soda companies' $20 million. I...

Anti-Tax Ferver Closed Their Libraries. Now Residents Are Trying to Go It Alone.  In Oregon, an interesting case study has been discussed. Divergent county and municipal ideals have led to different results for public libraries, with many of them closing. Meanwhile, some communities have taken it upon themselves, attempting to break the norms of what was once considered a public assset. On their own, they have gathered volunteers, sought out books, attempted to rebuild library card subscriptions from scratch, and looked for grants. In Douglas County, low taxes have been a part of the area for decades, and so when a property tax increase was suggested in 2016, it was rejected. The community at large didn't value the 11 county libraries enough to pay. The price would've been $6 a month for a median priced home in the county. Since that vote, some communities within the have voted to pay for a town library. Some have relied on volunteers. And not surprisingly, the divisions ...

Jared Kushner Paid No Federal Income Tax for Years, Documents Suggest Tax avoidance can take many different forms. In this case, it appears as though Kushner used a common method to avoid his federal taxes - reporting the depreciation of real estate assets. This "loss" is actually a bending of an assumption in the law. The law assumes that buildings depreciate over time, as assets acquire wear. However, many appreciate in value due to the nature of real estate. As a result, one can have buildings appreciating in the market, but can follow the law's assumptions of depreciation to report these "losses." The administration had recently revised tax laws to encourage such benefits to real estate investors - a move that should surprise no one. Another loophole used by developers such as Kushner include avoiding the capital gains taxes. This is done by selling their properties, but using the proceeds to purchase new properties, as long as its done within a certain ...