Report Deciphers Bond Provisions of the Recovery Act, Focusing on Accountability Issues
Perhaps the most obscure aspect of the $787 billion American Recovery and Reinvestment Act is how it seeks to expand bond programs for public infrastructure and private economic development projects. A report released today by Good Jobs New York explains how the Recovery Act's new and expanded bond programs are facilitating economic recovery and where opportunities exist for public input. The report is available at www.goodjobsny.org.
The impacts of Recovery Act bonds are potentially enormous with billions of dollars in new lending authorized nationwide. Yet, there is little public discussion about how they work or if the projects they finance will create good jobs, concludes the study, Bonds and the Recovery Act: A Guide to Municipal Bonds Enabled Under the 2009 American Recovery and Reinvestment Act and Their Potential Impacts on New York Communities.
“We hope this report will become a useful organizing and educational tool for many groups of New Yorkers,” said Bettina Damiani, Project Director of Good Jobs New York. “The report documents what the goals of specific bond programs are and if there are leverage points to make sure projects are accountable and create good jobs.”
The report reviews new and modified bond programs (private activity and governmental) through the lens of community needs and increased transparency and accountability: Are there public hearings? Are there prevailing wage requirements? Is priority given to low-income communities? What projects have already received such financing?
“Thanks to the Recovery Act, there are new and expanded municipal bond programs,” said Allison Lirish Dean, GJNY’s Research Analyst and lead author of the report. “But the process for issuing these bonds hasn’t changed despite the Recovery Act’s emphasis on transparency and accountability.”
The report includes commentary on approximately $74 million in approvals for Recovery Zone Facility Bond projects in New York City such as a parking facility at St. Barnabas Hospital in the Bronx, and a retail center known as “City Point” in Brooklyn. Both projects were controversial because of the small number or low quality of jobs expected to be created. Also, the City Point project was widely opposed by Brooklyn residents and small business owners because in 2007 the City displaced numerous small, mostly locally owned stores for the development.
Bonds and the Recovery Act, while primarily a resource guide, does include policy recommendations:
- Where possible, the Bloomberg Administration should include jobs created by Recovery Bond projects in the New York City Stimulus Tracker.
- Any amendments to the private activity bond programs associated with the Recovery Act should increase the requirements for public input and include mechanisms that would guarantee low-income New Yorkers directly benefit from projects. Current language in the Recovery Act and additional guidelines put in place by the City last summer are too weak to guarantee that projects benefit New Yorkers who most need jobs or that they create good permanent jobs.
Bonds and the Recovery Act is online at: www.goodjobsny.org.