A District program established to invest in small businesses that would in turn create jobs for city residents has yielded just 31 new jobs at a cost of $76 million, according to a report by D.C. Auditor Deborah K. Nichols.
Nichols is recommending that the city terminate the Certified Capital Companies program, known as CAPCO, which is managed by the Department of Insurance, Securities and Banking. Its commissioner and a director struggled to explain the program's benefits at a D.C. Council hearing yesterday.
According to the report, the program had $54 million in start-up and administrative costs and invested $22 million. Over five years, the investment money was poured into businesses that employed 205 people. After the investments, they employed 236 workers, an increase of 31 jobs.
"It is clear that the District's CAPCO program has not had the desired economic impact," Nichols wrote in the report.
Firms that invest in small companies through the program are given tax credits. Originally, it was thought that the lost revenue would be offset by rises in income, sales and business taxes.
