Jobs Bill Offers Tax Incentive to Businesses

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The City Council just passed a bill it believes to be a catalyst for creating more jobs in the District where the jobless rate exceeds 10 percent.

But according to its author, At-large Councilman Kwame Brown, the bill, “District Job Growth Incentive Act,” models a component of President Barack Obama’s stimulus package by providing franchise tax incentives for local business owners who commit to easing the local job crunch.

“Instead of giving a one-time credit of $5,000, businesses that commit to hiring 10 D.C. residents over the next five years will get a tax credit equal to the 10 employees off their federal payroll taxes,” Brown explained. “But they only get the incentive when they hire the people,” he said, and “they have to lay out a plan” which will enable them to use the tax credits for up to 15 years.

Over the past year, the District’s jobless rate has been listed among the highest in the nation. It stood at 11.6 percent in March — a decrease from the revised 11.9 percent rate for February — according to a spokeswoman for the District’s Department of Employment Services.

Brown said this week that the District gained 9,600 jobs in March, a feat which continues to carve a path toward economic recovery.

Overall, “We continue to gain jobs in a number of sectors specifically: professional and business services and educational and health services,” she said.

But Councilman Brown said his bill is far from loosening the District’s tight job market. He added that it has fostered an additional “series of tools” for improving the availability of jobs.

Listed among them are efforts to create more job training programs like those currently housed at some of the city’s high schools and which focus on helping more adults get back into the workforce.

Mayoral candidate Leo Alexander said he has yet to see much benefit in Brown’s bill.

“I don’t agree with it,” Alexander said. “First of all, we’re in a tremendous deficit and the Council is just adding to it by giving incentives to businesses that should be paying taxes. They’re just shifting one problem trying to address the unemployment problem.”