PENNSYLVANIA SENATE FINANCE COMMITTEE PUBLIC HEARING ON SB 512 Testimony of Alan L. Jennings Execu

The Community Action Lehigh Valley and its subsidiary community development corporations in downtown Allentown and South Bethlehem have run comprehensive community development initiatives in all three of our Lehigh Valley cities as well as a multiple municipal partnership in the boroughs of Wind Gap, Pen Argyl, Bangor and Portland for two years. These programs, known as Neighborhood Partnership Programs, have had an impressive impact on these communities. They provide tax credits to companies that make multi-year commitments of at least $50,000 per year.

As is too often the case, there is far too little funding in the program. When it was started in 1971, the Pennsylvania legislature appropriated $18 million for the program. It’s funding has never been increased since those good old days. If the program had kept up with inflation, there would be over $105 million allocated.

Community Action Executive Director Alan Jennings had the honor of being among the seven individuals testifying at a public hearing of the Pennsylvania Senate Finance Committee on Wednesday, June 6.

PENNSYLVANIA SENATE FINANCE COMMITTEE PUBLIC HEARING ON SB 512 Testimony of Alan L. Jennings Executive Director Community Action Lehigh Valley

I have the privilege of serving as executive director of a nonprofit that was founded in 1965 to tackle the problem of poverty in the Lehigh Valley; I have been with the agency for 38 years. We have nearly 100 employees and an annual budget of $24 million when one factors the value of the 9 million pounds of food we distribute each year. Our Second Harvest Food Bank supplies that 9 million pounds of food to a network of nonprofit, mostly faith-based food assistance organizations that, together, provide food to approximately 60,000 people each month. We operate the largest shelter for homeless families with children in the region, two long-term transitional housing programs, a job readiness program, homeownership counseling and foreclosure mitigation, entrepreneurial training, micro- and small business lending, home weatherization, housing rehab and new construction, neighborhood revitalization and more.

To provide a little context for my comments on the PA Department of Community and Economic Development’s Neighborhood Assistance Program, I would like to explain our position on how, as a society, we should address the challenge the marketplace has in reducing poverty. From our perspective, the common strategy for fighting poverty – helping people get out of the ghetto – is a fundamentally flawed approach: if we help the proverbial “winners” get out and leave the so-called “losers” behind, we concede the permanent ghetto. We believe that a better strategy would be to create neighborhoods where the “winners” choose to stay and there aren’t any “losers.” Our programs are directed at self-help initiatives, like teaching someone how to buy a house or start their own business.

Homeownership not only stabilizes neighborhoods, it enables people to gain and grow wealth through equity in their home. Starting a business can create jobs and open many other doors. Planting trees, improving the appearance of properties, streetscaping, can improve your municipalities’ tax base and fund quality-of-life initiatives.

So, our agency’s premise is that you can’t have a functional community without a functional marketplace. And the Neighborhood Assistance Program’s Neighborhood Partnership Program has been a critically important resource in our aggressive effort to challenge the forces that lead to a dysfunctional marketplace: disinvestment, the conversion of single-family homes into multi-unit apartment buildings, business closings, the decline of the tax base and, with it, the quality of life.

We were introduced to the NPP by a bank in 2000. We decided to pursue the program for south Bethlehem and started Southside Vision 2012 (in those days, the program was a ten-year initiative; today, due to changes in the law made by former governor Ed Rendell, the program can be longer but most companies choose the low end of five or six years).

I’m fairly certain that we have used the NPP more than any other nonprofit in the Commonwealth: in Bethlehem, we have operated Southside Vision 20/20 (the successor to 2012) for 15 years. In Easton, we operated an NPP for twelve years; in each case, we were working with, at most, about $160,000 per year in tax credits. In Allentown, we have used the NPP for 10 years, with two more remaining on the current program. In the process, we have offered a dizzying array of meaningful projects, to wit:

• We have replaced 170 sidewalks • We streetscaped the longest and most challenging commercial block in Easton and improved 100 residential facades • We have run a Main Street Program that has won just about every award offered by the PA Downtown Center, improving more than 50 commercial facades and reducing the vacancies in empty storefronts from nearly 30% to barely 3% • We have created full-sized parks and pocket parks, installed dozens of street lights, a skate plaza and splash park • We have rehabbed blighted houses and built houses new • We’ve planted hundreds of street trees, thousands of flowers • We’ve held street festivals, started businesses, offered landlord training, small business assistance and homeownership counseling • We’ve done a wide range of youth development activities, like SAT prep classes, teen dances and sports tournaments.

We have leveraged millions of dollars of funding from complementary sources.

We have engaged hundreds of residents in the development of the plans for each of our NPP’s. The steering committees we organize to oversee the NPP’s are populated by all kinds of stakeholders, including mayors and other municipal officials, representatives of the corporate investors that receive the tax credits, business leaders, educators, economic development groups and others.

If there is a problem with the program it is, of course, that there aren’t enough tax credits available and I’m afraid our agency has contributed to this problem. Because the minimum investment for which a company can receive credits is $50,000, the Neighborhood Partnership Program is overwhelmingly an urban revitalization tool. It is a rare company that is going to contribute $50,000 or more to a borough with a fraction of the residents that live in city neighborhoods. And, yet, boroughs have many of the same pressures on them that our cities have, just on a smaller scale.

So, we are piloting DCED’s first-ever, multi-municipal NPP with four boroughs in northern Northampton County. The four distinct municipalities are working together like never before, planning their futures jointly, sharing resources, tackling problems across the region. They have even launched a branding campaign with a shared “look.”

Frankly, I was excited by the idea and proposed it to DCED, which approved the pilot. This expansion should open the door to the Neighborhood Partnership Program to communities that have had little chance previously, hopefully making it more appealing to legislators who represent boroughs throughout the Commonwealth.

Another suggestion I would have is that there be a carve-out for those municipalities with Main Street Programs for which public funding has been exhausted. If the legislature allowed for contributions of $5,000 to, say, $25,000, expressly and exclusively for Main Street Programs, I am certain more Main Street Programs would be alive today and more boroughs and small cities might be thriving.

Finally, when a new NPP is started, companies that are new to the concept inevitably start with low-end financial commitments. It isn’t uncommon for a company that is new to the program to be excited by the results and willing to increase their support. However, because of the limited availability of funding, department staff do not allow for additional tax credits for projects in response to offers of increased investments or additional new investors. Consequently, it is more difficult to grow the program.

Of course, the bad news is that if the legislature doesn’t increase the availability of tax credits the grossly inadequate $18 million now available will be spread even more thinly. I hate irony. And I really hate it when good ideas backfire.

So, we need more money in this program; $38 million would be good.

So, on behalf of neighborhoods throughout Pennsylvania, I join my colleagues in encouraging, no, begging this legislative body to invest just a little more in our neighborhoods to facilitate more private investment, more citizen engagement, more community problem-solving that will lead to more self-help, better quality of life, more opportunity, a better future.