Jobs, opportunity and development are keys to adding some kick into the once thriving economy of southern Westchester County.
According to the latest federal jobs report, times are pretty darn good, nationally, if you are in the market for employment. National unemployment levels most recently dropped to 3.8 percent, according the U.S. Bureau of Labor Statistics (BLS), the lowest it’s been many years.
But that upswing has not been spread evenly for all American communities. Many citizens of our region have not benefited from the positive economic momentum being spotlighted.
According to OpenGov, unemployment in Mount Vernon was 6.1 percent in March 2018, higher than the Westchester average of 4.7 percent during the same period. For Yonkers, the unemployment rate was 5.3 and New Rochelle was 6.1. It’s clear that for residents of lower Westchester, jobs are much harder to come by than in the nation as a whole. There are, beyond a doubt, communities that have rebounded exceptionally well following the Great Recession, but there are too many others whose citizens are desperately seeking to regain their economic footing and — simply put — to put food on the table or pay the rent.
While there is much controversy surrounding the Tax and Jobs Act of 2017, it appears that it does have a silver lining, creating potential economic opportunities that southern Westchester cities like Mount Vernon, Yonkers and New Rochelle can benefit from, thanks to swift action by Gov. Andrew Cuomo.
As part of the tax legislation, the federal government created a new Opportunity Zone (OZ) program, which seeks to prime the pump of private investment, injecting this into lower-income communities in need of the right types of economic jumpstart.
The fact is that some 50 million Americans — or about 17 percent of the population — live in economically distressed communities, in dire need of attracting capital investment. In many communities across our nation and in the Empire State, there were fewer jobs and businesses in 2015 than there were in 2000.
It is a topic the Mount Vernon Industrial Development Authority has focused on and prioritized for the past few years, coming up with ways to attract new private-sector investment that creates jobs. As a recent study indicated, Mount Vernon has a proven market that is ripe for this kind of investment. It showed that the city has an untapped spending potential of up to $350 million just in the downtown district known as South 4th Avenue.
The federal OZ program takes aim squarely at neglected communities and provides incentives for those willing to invest, in return for no tax being levied on their long-term capital gains.
Gov. Cuomo has designated 514 census tracts to the U.S. Department of the Treasury in late April as OZs, several of them in southern Westchester.
The zones are across every region of the state, from Buffalo to Binghamton, from Mount Vernon to Montauk, and in all five boroughs of New York City.
While the program guidelines are still on the Treasury Department drawing board, the funding model is expected to enable investors to pool resources within designated OZ communities, like our own.
The Treasury defines an OZ as being a low-income census tract with an individual poverty rate of at least 20 percent and median-family income no greater than 80 percent of the area median.
The tax treatment of capital gains are tied to the longevity of the investment, with the most upside going to those who maintain their investment for 10 years or longer.
This incentivizes investors and entrepreneurs to make real, sustainable commitments to neighborhoods rather than some quick “hit-and-run” investment designed to produce short-term gain without benefiting those it is meant to empower.
In short, what this program does is harness the considerable capital waiting on the sidelines in the private sector and draws it to underserved communities. By ensuring that capital stays invested in the community, it extends the benefits to those who live and work in the areas where it is needed most.
Richard Thomas is mayor of the city of Mount Vernon. He can be reached at MayorThomas@cmvny.com.