Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Wednesday, May 11, 2016

(Conservative) Advocacy Agenda Setting in Washington State

The Washington Policy Center is a conservative policy advocacy organization in Washington State.  Their annual "Western Washington Solutions Conference" is one week from tomorrow.

The WPC conference pushes conservative policies on health care, education, and taxation.

And it features Gov. Bobby Jindal as keynote speaker--I'd think that driving your state economy into the ground ought not to get you to be selected as a keynote speaker and to be paid for it, unless it's about 'what not to do.'"

Although, according to the New Orleans Times-Picayune, "Louisiana's budget is a hot mess: How we got here," it's not all Jindal's fault.

But constant tax cuts combined with a serious decline in oil prices--as an oil producing state a significant amount of state tax revenues comes from the oil industry and similarly states like Alaska and Texas have experienced serious revenue declines also--pushed the state to the brink financially.  His putative bid for President allowed him to foist the problems onto his successor.

Still, planning as if the future will always be good puts a state government and economy at serious risk.

Next year, the WPC could get Governor Sam Brownback of Kansas to be the keynote ("With Kansas In Crisis, GOPers Abandon Gov Brownback On Tax Cuts," Associated Press).

In any case, it behooves progressives to organize similar kinds of "solutions conferences" too, although they should truly be focused on solutions rather than bromides.

Note that the organization LocalProgress is a national group supporting progressive locally elected officials. Their next national conference is in July in Pittsburgh.

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At 10:17 AM, Anonymous charlie said...

off topic:

FYI I calculated DC's debt at about 13000 per person. DC Water is not included.

At 10:37 AM, Blogger Richard Layman said...

Well, you probably have a sense for how I'd feel about PR. Their economy was wrecked by changes in federal law, although earlier it had been built by the creation of the laws that were later rescinded. So to me the federal govt./Congress has some responsibility to step in and facilitate refinancing.

But at the same time many of those authorities have done crazy things and there is incredibly corruption and graft.

One of the crazy things, nonprofits get free electricity? And all their electricity is generated by oil? No system for trying to develop sustainable energy sources?

... not unlike DC in some ways in terms of + and - in the way things are done.

I didn't save it, maybe it was in Governing Magazine, there was a fascinating story about how the state government in NY is working with the PR govt. on finances, because since NYS gets so many PR immigrants, they figure a significant decline in PR will increase the velocity of immigration to NYS, and this is a way to mitigate it (not unlike previous EU inter-regional ec. dev. programs designed to help eastern countries improve to reduce intra-EU immigration to western members).

... but then yep, why should bottom feeders buying debt be made whole, etc.

It's like one of the lines from your profession, "good cases make bad law."

Here it's more like bad cases make for bad options and bad policies.

At 11:02 AM, Anonymous charlie said...

Yeah, I was more focused on the debt cap issue (and why it is critical for DC, we have more debt per capita than PR) rather the PR deal itself.

As that article says, for the last few years the only people buying PR debt have been hedge funds making a bet. Interesting bet.

Going back to your first (original point) is that conservative/Republican groups LOVE to fund policy conferences.

On the D/Progressive side, you have already established institutions that do the same thing.

In both cases citizens are missing out. Take the DCFPI, which as long been captured by the poverty-industry in DC.

Would be interesting to go the Constitutional Convention and make some havoc.

At 11:25 AM, Blogger Richard Layman said...

How did you calculate the debt?

I wonder how DC compares to other major cities?

I'm thinking of contacting the Moody's press people (via the link to that state report) to ask them these questions, but the problem is that I don't know all the ins and outs of municipal finance and municipal bonds.

Normally, I'd say DC should be compared to cities not states, but DC does collect its income tax. OTOH, some other cities have income tax revenue streams of some sort too.

It's hard to say what the right comparison set is.

E.g., LA is broke... Seattle is growing too, and the citizens there are ripe for voting in favor of most tax increases for various projects (transportation, libraries, etc.).

But it also depends on the nature of the population, the proportion of the impoverished, etc. Since DC is gaining more residents with higher rather than lower incomes, that changes the financing capacity calculation as well.

Anyway, as you know I think the debt cap number can be higher, but (1) it's hard to say what the right number is and (2) if the city continues to waste so much money on poorly thought out capital projects, then a lot of the money is wasted, which is a drag on the local economy, rather than serving as an "investment" in the city which generates positive and increasing ROI.

spending vs. investment is the issue.

At 11:30 AM, Blogger Richard Layman said...

this is another example of the HUGE FAILURE on the part of DC OP and DC CFO to not have created a report on the economic value of different types of development, comparable to studies that have been done in Sarasota and elsewhere.

Because most cities don't collect income tax, the studies look mostly at property and sales tax revenue and business taxes.

But DC collects income tax from residents, which changes the calculation of the value of mixed use residential development significantly.

And we don't know those numbers!

It's a travesty.

At 11:42 AM, Anonymous charlie said...

10B in debt / 600,000 = around 16K per person.

PR is 2015 was about 15K.

I agree that isn't an apple/apple comparison with other states, just gives you an idea that we do have a debt problem.

At 11:59 AM, Blogger Richard Layman said...

umm, gee, I guess that's a simple enough calculation.

PR, theoretically, could have more debt financed because people don't pay federal income tax.

I guess I'll do a search and try to figure out who might be academics expert in this area.

Frug writes on the legal relationship between cities and state, but not on debt.

At 12:58 PM, Anonymous charlie said...

Bought estimate. As I said doesn't include DC Water that DC is on the hook for as well.

Talk to Dr. Gandhi?

At 1:18 PM, Blogger Richard Layman said...

good suggestion. I'll have to think on it.

At 10:20 AM, Blogger Richard Layman said...

At 9:20 AM, Anonymous charlie said...

If you are asking the very narrow question -- does the CFO/OCTO properly model the impact of new residential (by including future tax streams) vs retail or commercial the answer is no.

I'm not even sure the OCTO in involved in zoning issues at all.

I'd made the point before the IZ requirements are a double whammy. You are brining in lower income people with lower income tax streams. and a 30% IZ requirement reduces the entire value of a building in terms of property tax.

At 12:48 PM, Anonymous Richard Layman said...

why for social reasons I am in favor of IZ, I have to admit I didn't think about the property valuation and property tax revenue element.

In any case, I've always thought that IZ should be tied specifically to density bonuses, to reduce the negative impact on the economic viability of the property. That doesn't happen though.

Similarly, the "lop off a floor or two" to placate anti-development residents doesn't work very well in the long term. I always thought about it in terms of the maximum development envelope of the city being constrained and only having so much room to grow.

But there is the income tax revenue stream element as well as the property valuation and property tax revenue element. The former I thought about, not the latter.

Thanks as always for your provocative insights.

At 1:10 PM, Anonymous charlie said...

RE: Lopping off. Yes, if the zoning rules are that fungible (in both ways) the problem is in the zoning rules.

RE: income streams. The problem of hyper-gentrication is real. The only place it exists is Georgetown. I'd guess DC is capturing perhaps 25% of those highly wealthy income streams at best. City Center/the Wharf are going to be similar.

I'd say Williams knew this, and wanted to capture 100K highly paid workers with low expenses (young, no healthcare, and minimal education costs).

But we are looking at population bulge (35 and under) and despite their preferences for city living DC might not capture that as they get older.

At 1:40 PM, Anonymous Richard Layman said...

well, you only need to capture some of them. As long as they are two income households and interest rates remain low and they can spend $700K on a house, DC will capture enough of these households as they "age." Some will go to the suburbs, sure.

Most of the household turnover in my neighborhood is of "young" couples and households with children/expecting to have children, 35+.

But housing prices are escalating and this will be an issue going forward. Plus as these households have kids they become a cost sink because of the cost of education/pre-K, from age 3 to 18 at about $15K/year.

In the immediate area, it might drive improvement of the Rte. 1 corridor in PG County, and the Purple Line corridor there too, if they can have a sub-district school improvement initiative, because housing costs are so much lower. It's the only close in area with such a large difference (a couple hundred thousand) in housing costs.

At 8:37 PM, Anonymous charlie said...

Hmm, I'm starting to get the conservative platform:

1. Non-market based: I know that market forces are important for conservatives (Not sure why) but market implementation isn't great in cities/urban areas. Too many externalities and you can't weight them.

2. Education/childcare: How to get world class eduction wishing the next 10 years.

3. Right size Government -- move down social spending, move down on pensions, and move down to number of workers (be more efficient)

4. Middle class tax burdens - cities are unique in that we accept wealth taxation, but make sure the burden isn't on the middle class.

5. Pro-social acceptance: Be pro immigration, pro minority and pro gay.

Yes, basically a DLC from about 1996.


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