U.S. Rep. Ron Kind is seeking greater transparency in a program meant to boost economic development in distressed areas including the former Mobil Oil site and the Washburn neighborhood, he said Tuesday during a meeting with the Tribune editorial board.
Kind was a proponent of the opportunity zone program, which aims to boost private investment by providing federal capital gains tax relief in low-income and distressed economic areas.
Former Gov. Scott Walker recommended the U.S. Treasury designate two areas of La Crosse as economic opportunity zones and the Treasury agreed.
The idea behind the program was to get early-stage capital into overlooked regions of the country, Kind said.
“If you don’t have that start-up money, it’s hard to get going,” Kind said.
The program passed as part of the 2017 tax package with bipartisan support. However, Kind said, the program needs oversight.
“We want to make sure that that’s done in a very transparent way,” Kind said.
The original bill included transparency measures, but those were removed when the idea was added to the 2017 tax bill in the U.S. Senate, which was constrained when it came to what it could include.
“A lot of the accountability, reporting and transparency requirements were dropped from the legislation when it got included in the tax package at the last minute,” Kind said. “Now we’re going back with legislation to get passed and get it coupled as we’re moving forward with it.”
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Since the program got going, real estate developers have taken advantage of it, including those with ties to President Donald Trump’s administration, including the family of Trump’s son-in-law and senior adviser Jared Kushner and financier Michael Milken, a longtime friend of Treasury Secretary Steven Mnunchin.
Kind joined Reps. Cory Booker and Emanuel Cleaver II in calling for the Treasury Department to investigate the use of the program by the Kushners and Milken after The New York Times and ProPublica raised questions about the tax break going to luxury housing in wealthy neighborhoods, including Milken’s project in Nevada.
“I know there’s been scrutiny with the Kushner family that’s been taking advantage of OZs and some others and Milken is under investigation for maybe cooking the books a little bit, so we need that,” Kind said.
However, he believes the program can benefit areas in the Third Congressional District with the addition of more oversight suggested in his legislation.
His legislation also includes resources for local business communities to teach them how to make the zones work for them.
“Another part of the legislation that I’ve introduced is kind of a National Clearing House out in Washington for best practices for how to do the zones, how to market it, how to attract the capital, what type of projects are ideal for it so that local entities don’t have to keep recreating the same thing over and over again,” Kind said.
Kind was optimistic that it could move forward, saying there was a lot of support on both sides of the aisle in both the House and Senate to get it done.
The effort is part of Kind’s focus on the economy in 2020. He plans to push for more infrastructure investment and has been tapped to be a member of a task force to find solutions to expand rural broadband access.
“We can’t afford as a country to be less competitive in any inch of our territory, let alone the rural areas,” Kind said.
The task force is looking at ways to get private companies to provide rural internet access in more places, similar to the rural electrification program of the 1930s which brought electricity to everyone.
“This is crucial to the lifeblood of these rural communities, especially for keeping the youth,” Kind said.
Businesses and farmers also need it, he said, to stay competitive in the global economy.
Jourdan Vian can be reached at email@example.com or follow her on Twitter @Jourdan_LCT.