My final comment on the Georgetown municipality’s institutional 25% rates’ policy
Please refer to a letter which appeared in your Stabroek News issue of Tuesday, September 3, 2024: “The institutional rates’ policy pushed through the Georgetown city council expressly omits non-governmental organisations.” by Alfonso De Armas, PPP/C Councillor. Editor, I had resigned myself from making any further public comment on this issue as we must get on with the business of the council. However, it would be remiss of me if I did not point out that this letter, signed by Councillor, De Armas is riddled with inaccuracies. One such inaccuracy is an apparent misunderstanding, on the part of the councillor, of the difference between a policy and a decision.
To be clear, the core difference between a policy and a decision of council is: (1) A policy is a broad, overarching guideline or principle that governs the actions and decisions of the council. It establishes a general direction or approach to certain issues, such as environmental health, traffic control or rates. Policies are essentially designed to provide a framework for consistent decisionmaking over time and assist to ensure that the actions of the council are align with its goals and core values, and, (2) Decision of council is a specific action or resolution made by the city council in response to a particular issue or situation. Whilst decisions may be influenced by existing policies they are individual outcomes rather than broad guidelines.
Unfortunately, Councillor, De Armas appears to have fallen into serious error by entering into the realm of confusion with the words “policy” and “decision”. At paragraph 3, the Mr. De Armas stated: “Moreover, if, as the Mayor asserts, this policy was approved and gazetted in 2017, why was it returned to the Council for further approval? Further, why does the document presented to the Council bear policy number P1/2024, indicating that it is the first policy of the year 2024?” These questions clearly show that the councillor is in municipal knowledge maze and a total rookie.
The fact of the matter is that at its last statutory meeting, the council discussed and approved a policy on an approach to apply an institutional rate of 25% to political parties.
The policy provides a framework and gives structure to a decision taken by the council since 2009, and published in the Official Gazette in 2017, under Mayor Patricia Chase-Green. Although the now approved policy did not mention non-governmental organisations (NGOs), the deliberations, intent and spirit of that decision adequately accommodated a broad-based approach to accord the utility of this rate to a wide array of organisations, including political parties. Research of the minutes of discussions at statutory and finance committee meetings in 2009, and subsequent years would demonstrate this fact. Also, the decision was not re-tabled as was suggested by the councillor. Rather, a well-crafted policy to provide a framework to apply the institutional rate of 25% to one category of organizations - political parties was discussed and approved. The policy does not mention non-governmental organisations because it was not necessary.
The Municipal District Councils Act, Chapter 28:01 is clear about the authority and responsibility of the council in this area of its operation. Section 214 (1) states: “a council shall have power to exempt from liability to pay rates either wholly or in part, in respect of the properties listed in this section, the owners of- (b) “any property used mainly for the purpose of open-air games or of open-air athletic sports and occupied by a club, society or other organization which is not established or conducted with a view to profit;” And “where the council is satisfied that liability to pay the whole of the rates would seriously prejudice the successful attainment of the objects or purposes for which the organization, club or society exists.”
Here, I wish to note two things: First, I believe that “other organisation” as stated in (b) of section 214 would include political parties, trade union organisations and other not-for-profit organisations. Second, the approved policy is in keeping with the decision but more specifically with that part of the law that states: “where the council is satisfied that liability to pay the whole of the rates would seriously prejudice the successful attainment of the objects or purposes for which the organisation, club or society exists.” That approved policy gives council the means to satisfy itself by setting bench marks that such organisations qualify for the institutional rate of 25%.
Again, at paragraph 3, he confuses policy with decision: “Editor, the Mayor’s revelation that this policy was discussed and approved since 2009 … is shocking, to say the least.” He contends, that the policy should be changed because it does not reflect the needs of the council. However, successive councils did not see the need to change that decision. A careful analysis would reveal that that decision would benefit not-for-profit organisations, in particular, and our society, in general, in an assortment of ways. There is no need to change it. Interestingly, Mr. De Armas did not go to the trouble to demonstrate how he has determined that the council should change it decision. Whether he has considered all the factors involved, understood the thinking of the council at that time, that decision was made, and what indicators he has designed to show that this council needs to change its decision.
As Mayor I have no problem with individuals scrutinising and holding the council accountable; this is good for us as a political corporation. I have a serious difficulty understanding the rationale for members of the city council running to the media on important issues without the facts. It is my view that those, who have and use the privilege to write to the media, or appear on various social media platforms, on municipal matters, also have a serious responsibility to be accurate and truthful to their audiences.
Finally, in paragraph 4, the letter states: “Mentore goes on to argue that’ …the national government’s strategy of granting extensive tax breaks and concessions to foreign corporations is both perplexing and concerning.’” What is so perplexing about this? Strategies like this are designed to create jobs and drive investment in Guyana. For example, the addition of seven new hotels will create three thousand new jobs for Guyanese.” The councillor is right. Alternatively, these concessions can also lead to the displacement of local businesses and employees. Big foreign corporations often have the resources to outcompete and overshadow smaller, local enterprises, potentially driving them out of business. This not only affects local employment but also reduces the diversity and resilience of our local economy.
As well, foreign companies benefiting from tax breaks may not always reinvest their profits into the local community. Unlike local businesses, which often reinvest earnings into the city, foreign investors may repatriate
profits to their home countries. Therefore, while the initial influx of capital might seem beneficial, the long- term economic gains for Georgetown could be minimal compared to the support we could have offered to our local enterprises. How many of these hotel locations were offered to locals? What kind of studies were done to determine we need all these rooms at one time? What kind of breeding room is being offered for these hotels to build a clientele? Are these hotels only built for foreigners? Why weren’t a balance of hotels for local consumption in conjunction with foreign consumption made a policy of government? Should this be continued we will have a situation like in one Caribbean territory where “jack don’t want me to bathe on my beach.”
The right balance should always be considered when long term developmental vision is being considered. Do note, I have not said anything about the environmental, ecological, cultural, social and economic effects those hotels will have on local communities and the city as a whole. Tax breaks for foreign investors, while ostensibly crafted to stimulate and facilitate economic activity, often leads to a position where the costs of underfunded municipal services are passed on to local home- owners. As we struggle with budget shortfalls, residents suffer from reduced services, including solid waste management, drainage, environmental and public health services, and law enforcement and security, further exacerbating social and economic inequalities. It is crucial for the government to strike a good balance between attracting foreign investment and ensuring adequate support not only for the city council but all local councils.
I demand that the PPP/C councillors stop the charade and do less of bringing division and seek to work together to make Georgetown a better place. We have nothing to gain from division, and fighting in the public sphere, but much to look forward to if we work in unity, with collective purposes. We owe it to the people of Georgetown. This is my final comment on this issue.