Revisiting Pittsburgh and Allegheny County as an opportunity for city-county consolidation: The "RiversCity" proposal

Partly what got me thinking about city-county consolidation--places like Indianapolis (1970), Knoxville, Macon-Bibb County, Georgia (2012), and what SF and Philadelphia did in the 1800s--was seeing mention of a Brookings Institution report about Pennsylvania c. 2003 (Back to Prosperity: A Competitive Agenda for Renewing Pennsylvania), and it mentioning how so many of the micro jurisdictions across the state including in Allegheny County, where Pittsburgh is, lacked the financial capacity to serve their residents.

Plus I attended a conference in Louisville Kentucky in 2004, just as they were beginning to consolidate the city and county after a successful vote to do so (A 10-Year Perspective of the Merger of Louisville and Jefferson County, KY, Abell Foundation, "How merger reshaped Louisville, Jefferson County and metro development," Louisville Public Media/NPR).

It was probably easier for Louisville because Knoxville city and Knox County had merged some functions--but not the city and county--years before.

Later I suggested this for Baltimore City and County ("Opinion: What Baltimore and D.C. can do to start working better together as a region (Baltimore Business Journal op-ed," 2016), and I support efforts to do this for St. Louis City and County ("St. Louis: what would I recommend for a comprehensive revitalization program? | Part 1: Overview and Theoretical Foundations," 2021).  I also think Detroit should do it, but ideally with Oakland County!, not Wayne.

It turns out that ten years before Brookings, Professor David Miller (now deceased) of the University of Pittsburgh suggested a proto version of this, a concept called "Rivers City," not for the entire county and not for Pittsburgh but for the various small communities in what is called the Lower Mon(ongahela) Valley ("Small Western Pennsylvania towns weigh merits of merging some public services," Pittsburgh Post-Gazette).

The economic circumstances they face are issues common to that of municipal finance for communities and metro areas across the country, which I wrote about in "The real lesson from Flint Michigan is about municipal finance" (2016).

Basically our local government finance systems were set up when the country was growing.  They don't work well in changed circumstances.

In the Lower Mon Valley, communities are resistant, believing rightly that they are unique.  Although really, they are not exceptional, and economically at least, they should merge to have greater taxing and funding capacity.  

Those communities haven't merged, but over the years, because of their minimal financial capacity, they have merged services, like police and fire departments.  This phenomenon has been happening across the country for the past couple decades in places like New Jersey, Suburban Detroit, and Salt Lake County.

According to the article, 39 communities make up "Rivers City," ranging in population from 232 to 23,000. The communities total 209,000 in population, while Pittsburgh is about 306,000 and the total county population is 1.238 million.

From the article:

“A lot of these really small towns have now been in a position for about 30 years where they just don't have the tax base necessary to support the full slate of services that they had been used to previously,” Mr. Dougherty said. “And I'll be honest: our response to them has largely been, heal thyself, mostly through service cuts.” 

If it isn’t service cuts, then it’s consolidation — many fire and police departments are either decertifying their operations or merging with nearby departments, Mr. Dougherty said. And it’s likely that sort of functional consolidation, rather than municipal consolidation, will occur in the coming months and years, he said.

Opportunity zones and revitalization planning

 The New York Times reports ("Biden Administration Debating How to Overhaul a Trump-Era Tax Break") that the Biden Administration is proposing changes to Trump's Opportunity Zone initiative.  

8.764 census tracts are designated as Opportunity Zones

Source: OpportunityDb investment website

Trump et al touted it as a great program to stoke development in distressed areas, but mostly it was a boon for real estate investors.  From the article:

The most comprehensive study of investment in the zones to date, released by a pair of University of California, Berkeley, researchers last week, contradicts Mr. Trump’s assessment of the zones’ early performance. The authors, Patrick Kennedy and Harrison Wheeler, are graduate economics students who were granted access to anonymous tax returns filed electronically. Mr. Kennedy is also an economic analyst at the congressional Joint Committee on Taxation. 

The study suggests that in 2019, only about 16 percent of the 8,000 census tracts nationwide that were designated by state officials as opportunity zones using criteria set under the Trump administration received any investment at all. Rural areas received almost no investment. Most of the capital was concentrated in a small slice of zones.

That shouldn't be a surprise.  Even in the best of circumstances, revitalization is tough.  It's toughest in weak markets.

But it's also hard to stoke when the process is run by real estate investors motivated by tax savings, not the best interests of the community.

Not unlike my point to artists ("Reprinting with a slight update, "Arts, culture districts and revitalization" from 2009") that they shouldn't be looking to real estate interests to save them or do their planning, the same goes for revitalization.

My basic point is that real estate development interests have their own interests apart from artists, and that artists and arts organizations need to be conscious of what those interests are, harvest what they can from them, but never stop representing their own interests first and foremost.

I know the Trump Administration would have been opposed, but before initiating investments in these communities, there needed to be a revitalization plan.  Maybe there were in many of the communities, but even so they likely required an update.  I wrote about this at the time:

-- "I figured out why Opportunity Zones won't amount to much: no planning," 2019

I make similar points that:

• an RFP isn't a plan ("Another example of an RFP isn't a plan: Santa Fe, New Mexico versus Denver, Colorado," 2021)
• that the EB5 visa program needed broader plans to direct where the money went
• that community benefits agreements need to be based on an overall plan of consensus priorities to be able to direct proffers in judicious ways ("Structuring community benefits agreements," 2015)

And about how revitalization planning should be organized, with what I now call "Transformational Projects Action Planning":

-- "Why can't the "Bilbao Effect" be reproduced? | Bilbao as an example of Transformational Projects Action Planning," 2017

Plus, the program is for ten years.  The revitalization process usually takes a lot longer than that, especially in distressed communities--periods of a minimum of 20-30 years are not uncommon.

How to move capital to underinvested areas?  But, you can also argue that as charlie pointed out wrt the New Deal, that it was about moving capital from Wall Street to the country's interior, especially the South and West, there need to be vehicles to incentivize capital investment in these places.

Especially because projects in distressed areas are harder to do, often more expensive, less profitable, and more risky.

Needed changes to the program.  But the program requires major changes:

• community development plans should be created for each "Opportunity Zone"
• investment incentives should be targeted to community priorities set out by the plans
• extend the length of the program
• provide the most incentives for the most difficult areas, especially weak market communities and rural areas
• graduate the tax benefits, with minimal extra benefits in strong markets, e.g., Brooklyn
• coordinate with other investment programs like New Markets Tax Credits, Historic Preservation Tax Credits, Low Income Housing Tax Credits, and Community Reinvestment requirements for banks.

Other changes to Trump changes in tax credit programs are in order.  Note that the lowering of the corporate tax rate made participating in tax credit programs much less attractive.  

Plus they made changes to certain programs like the Historic Preservation Tax Credit making it much less beneficial and therefore less effective as a tool for revitalization ("Historic preservation tax credit is saved, but weakened," Chicago Tribune).  And if anything, it should probably be increased from 20% to 30-40%.  

Same with tax credit programs for affordable housing ("Trump’s proposed tax overhaul puts affordable housing in jeopardy," The Real Deal).

These programs should be revisited as well, and necessary changes made.

Two interesting examples of supermarket firms bucking traditional political forces

1.  In Texas, the supermarket chain HEB (ranked #1 in the country by some evaluators) challenged an electricity rate increase petition by the state's major utility, because they said it was undeserved given the level of frequent power outages.

Because it is a respected firm and "not some wooly-eyed anti-business advocacy group" they were taken seriously and the rate increase was mostly denied, in turn providing benefits to Texas residents independent of the firm ("How H-E-B helped reduce CenterPoint’s request for electricity price hike," Houston Chronicle).  At the end, the rate increase allowed was less than 10% of what the CenterPoint utility originally asked for.

But the reality is that HEB didn't buck the system that much. It is typical for "industrial" users of electricity to challenge utility rate schemes.  At the end of the day, HEB was just another utility customer challenging rates.

2. What Harmon's Supermarkets, a 19 store independent grocery chain in Greater Salt Lake City that manages to hold its own against one of Kroger Company's strongest divisions, did in December and January was a much greater challenge to good old boy politics.

I was shocked one year to see the Gay Pride flag flying at the City Hall in Salt Lake. While many cities have solid bona fides when it comes to LGBTQ issues, I've never seen the flag flying in front of city facilities, which is a very direct communication.

While Salt Lake City is an increasingly progressive city--even in otherwise conservative states, metropolitan areas tend to vote Democratic--Utah is a very conservative state politically.

The Republican Party has a super majority in the Legislature, Legislators are mostly white men, and 90% of the Legislature members practice the Mormon religion.

Last year, after a special session that wasn't particularly deliberative, the State Legislature passed a tax reduction plan that (1) reduced income taxes, which by law are the sole source of school funding; (2) increased sales taxes on food without overhauling the sales tax revenue stream, which funds other government operations; (3) said that by changing the tax structure of school funding it would force school districts and cities to work together to increase local property taxes to fund schools, with no guarantee that school funding would be maintained.

Utah has certain referendum laws that in some cases, allow for petition campaigns to challenge actions by the Legislature, although petitioners are only provided a very short time, maybe 45 days maximum, and there are complicated requirements for a certain number of signatures from a majority of counties, tabulated by county, etc.

Rarely do such referenda work, and the pundits all said the referendum effort would fail.

Petition table inside a Harmon's Supermarket. Photo:  Ben Winslow, Fox13 SLC.

Then Harmon's Chairman, Bob Harmon, stepped in out of belief that an increased sales tax on groceries would be hardship to its customers and Utahns generally, and in early January let the petition campaign set up tables in each of their stores to gather signatures ("Harmons grocery stores join tax referendum effort," Salt Lake Tribune).  From the article:

“Food is essential and should be affordable,” Bob Harmon, the company’s chairman, said in a prepared statement. “Increasing the tax on food hurts everyone, but especially those in our community who are already struggling.”

In turn, this led their supplier, Associated Food Stores, a grocery business cooperative operating in the Intermountain States, to do the same at their corporately owned stores, and many of the independent store groups supplied by the chain ended up providing similar support.

Harmon's was roundly criticized by elected officials, including the Governor.   From the article:

The Governor’s Office issued a statement saying it was “disappointed in Harmon’s actions.… As a corporate citizen in the state, they have a right to engage in the political process, but they also have the responsibility to do so in a way that elevates the public’s discourse and is based on facts and not emotion."

Herbert’s Office then went on to suggest that Harmons’ opposition, like that of other tax reform critics, was based on lack of understanding.

“Harmon’s has not contacted the governor to express their concerns. If they took the time to meet with the governor and/or legislative leadership, they would understand both the need for tax reform, and the viability of the policy enacted by the Legislature and signed into law by the governor,” the statement said.

But by the end of the month, the petition campaign secured enough signatures ("Tax referendum signature validation rate at 94%, stunning elections officials," Fox13) and in only 3 of Utah's 29 counties were not enough signatures collected to meet statutory requirements ("After Success Of Tax Referendum, Summit and Wasatch Counties Still Lag Behind In Signatures," KCPW/NPR).

Rather than go through the process of a public vote on the referendum, the Governor and the Legislature caved, and repealed the changes ("Utah Legislature repeals tax reform in pair of overwhelming votes," SLT).

Elected officials continue to criticize opponents of the measure, while failing to acknowledge that the process was poorly handled and executed, and the measure incompletely addressed the structural problems within the current tax system.

Conclusion.  Arguably, both firms made "business decisions" not moral-ethical decisions, to take the position that they did on these issues.  But still, both companies deserve recognition for standing up in the face of what they considered to be negative actions by other actors, for acts that would not only affect their businesses, but their customers as well.

But at least for Harmon's, they took heat for not going along, not being a good "corporate citizen" at least according to the definition of the state's leading elected officials.

---

As it happens, both companies are market leaders in the supermarket profession.  One interesting thing about this though is that both companies are leaders in their respective markets.

In the very competitive Texas market, HEB is #1 for grocery sales and they are quite innovative ("Why are HEB flour tortillas so dang good?," Bon Appetit) with a supercenter offering, Central Market, an upscale offering, great branding, a focus on selling local products, etc. ("HEB: The Smartest Supermarket You've Just Heard Of," Forbes Magazine).

Harmon's has differentiated the company by shifting away from competing on price and instead offering quality, an emphasis on local products, great branding, differentiated store sizing, offering a wide array of prepared foods, an impressive loyalty program (the rewards are based on how much you buy, not so much focused on providing discounts on purchases), Cooking schools in many of their stores, and supermarket dietitians covering all of their stores and offering programming (see the entry for Harmon's in "Wonder Filled," Progressive Grocer).

There is no real equivalent of Harmon's in the DC area.  And none of the major supermarket chains in the DC area operates with the agility and innovativeness of HEB.

Should the Federal Reserve purchase bonds of state and local governments during a recession? (Yes)

In a hearing yesterday, Democratic Party Representative Rashida Tlaib asked Federal Reserve Chairman Jerome Powell about extending counter-cyclical anti-Recession responses of purchasing of debt of corporations and the federal government to debt issued by local and state governments ("AOC Is Making Monetary Policy Cool (and Political) Again;," New York Magazine).

Powell responded that it isn't legal, but apparently it is.

A big problem during recessions is that even if there is new federal spending aimed at stoking demand during a recession, along with increases for unemployment funding and sometimes other types of social support payments, states and local governments and related agencies tend to contract significantly for two reasons:

1.  Property, income, and sales tax revenues contract
2.  By law, state and local governments can't run deficits.

This cancels out many of the benefits of increased federal spending during recessions and in fact, extends by multiple years recessionary pressures.

Apparently, the Roosevelt Institute released a report, A NEW DIRECTION FOR THE FEDERAL RESERVE: Expanding the Monetary Policy Toolkit, a couple years ago that included this point:

3. PURCHASING STATE AND LOCAL DEBT
Unlike the federal government, state and local governments do face meaningful financial constraints. Perhaps the single most powerful tool the Fed has to support aggregate demand and direct credit in socially useful directions is to purchase the liabilities of states, cities, and other subnational governments. This would greatly reduce the pressure for pro-cyclical cuts in public spending during recessions.

The balance sheets of state and local governments are complex—unlike the federal government, most have substantial financial assets, as well as liabilities, and the sector as a whole is a net creditor (Mason, Jayadev, and Page Hoongrajok 2017). But many individual governments do face acute limits on their access to credit, and concerns over credit are a constraint on spending and revenue decisions, even if their access to bond markets is currently unimpaired. These concerns become especially serious during downturns—exactly the period when, from a macroeconomic perspective, state and local governments should be increasing spending and avoiding tax increases.

From a social standpoint, public investment is less costly during a downturn, when a larger fraction of labor and other resources are unemployed. So it is perverse that borrowing constraints cause many governments to cut back investment spending in recessions.

Financial constraints on state and local governments impart a substantial pro-cyclical component to their budget positions, acting as a kind of “automatic destabilizer” that offsets countercyclical fiscal policy at the federal level.

Taxes as an investment concept: funding public goods versus tax reduction

I've been meaning to write about tax policy because there has been a fair amount of writing about the 2017 tax cuts, and the benefits mostly being directed to corporations and the extremely wealthy, and the purported big rise in economic growth that proponents said would come about because the changes hasn't happened.

-- "A New Congressional Study Finds Little Economic Benefit From 2017 Tax Cuts," Tax Policy Center

A big thread in neoliberal policy is reducing the size of government, privatizing government functions, and reducing taxes.

At the same time, the counter argument is that collective action and providing public goods requires a reasonable rate of taxation, and that lower taxation comes at the cost of investing in infrastructure and other public goods.

1. One example that comes to mind to me is how Norway and the UK took oppositional actions in response to the new revenues they received from oil production in the North Sea.

Norway didn't cut taxes, and retained ownership of the resource, directing royalty revenues to a state investment corporation, which has invested in various projects, increasing the return on investment in multiple ways.

The UK used the new revenues to justify tax cuts for the wealthy, did not retain ownership interests in the resource, and reduced corporate tax rates as well.  And while it isn't the only reason that the UK is seriously challenged financially and lacks the money to invest in revitalization and other government functions, it is a good example of how short term thinking has deleterious consequences in the long term.

-- "Did the U.K. Miss Out on £400 Billion Worth of Oil Revenue? ," Resource Extraction
-- "Why UK's oil and gas revenues are dwarfed by Norway's," Business for Scotland

2.  I have been thinking about the tax cuts issue in terms of positive return on investment.  There is a lot of discussion about how the US is running higher deficits, even though the economy is growing relatively well, because of the tax cuts, and how this is counter to general expectation, but also bad policy and bad practice.  That today's deficits are being financed by future generations.

-- "Robert J. Samuelson: Trump's fantasy budget worsens deficit"  (Washington Post syndicated columnist)
-- "Robert J. Samuelson: Shrink the budget deficit? Not a vote-getter"

There's no need to have a discussion here about Keynesian fiscal theory, recessions, counter-cyclical spending, etc.

A simpler way to think about might be, does your deficit financing "today" increase return on investment in the future or not?  If deficits don't or aren't intended to increase overall return on investment, it's bad policy and shouldn't be countenanced.

3.  Of course, what's happening with the federal deficit shows the hypocrisy of Republicans.  They "fight" deficits if the spending is for public good projects like infrastructure, or various federal programs generally as a matter of course, but not if it is for tax cuts for the wealthy.

-- "The Republicans Are Deficit Hypocrites. The Democrats Should Be Too," New Republic
-- "Charles Lane: A country at war with itself over debt" (Washington Post syndicated columnist)

4. Alaska proposes to cut university budgets 40%.  In the vein of whether or not tax cuts add or subtract value, the proposal by Alaska's Governor to fund an increase in payments to Alaska citizens by cutting university budgets is a good example.

Similarly to how the UK has let the benefits of oil production flow away from the National Treasury, instead of enacting state income and sales taxes, Alaska uses oil revenues to pay for the cost of state government as well as an annual payment to citizens. Theoretically, the Alaska Permanent Fund is not unlike what Norway did. But Norway doesn't pay out annual payments to every Norway citizen, instead it invests the revenues.

The Governor ran on a campaign plank of increasing the payment. In the face of declining oil revenues ("No longer rich on oil, Alaska may ax money to universities. Lawmakers are 800 miles apart," USA Today), the only way to do that is to cut the budget, and universities offer an opportunity to provide a significant portion of the cuts to state government necessary to fund an increase in the payments from the Alaska Permanent Fund.

But the question is whether or not that's the best possible way to "spend" such revenues. Likely the long term investment benefit from such an action is nil.

Therefore, it's bad policy and shouldn't be countenanced.

(US) National Travel and Tourism Week, 2019: DC's tourism tax revenue stream should support sub-city efforts

Most cities and counties levy some form of what are called tourism taxes. Usually this includes a charge on hotel room stays*, rental cars, parking (although that's a charge on commuting as well), and a portion of meal taxes.

(Communities also reap tax revenues from income taxes on businesses and workers, and sales taxes on the sale of goods and services to tourists.)

Separately, some cities facing forms of overtourism are assessing capitation fees as a way to manage the flow of tourists and to mitigate some of the costs.

Additionally, many cities argue that some of the tourism tax revenue stream should be captured to support non-tourism related needs ("Potholes, water woes: New Orleans seeks more of tourist tax," Associated Press).

The majority of images used in the DC Cool tourism marketing campaign are generic "images of nowhere" and don't feature landmarks distinctive to DC.

This money is used mostly for three things: (1) to pay for convention centers, "convention hotels" and other tourist attractions depending on what is approved ("Nashville Music City Center: Absorbing more tax revenue than it needs?," Nashville Tennessean) and (2) tourism marketing, through what are called "destination marketing organizations" or "convention and visitors bureaus."

A number of cities also use this revenue stream (3) to pay for sports facilities ("How best to invest New Orleans' tourism tax revenue?," New Orleans Times-Picayune; "How tourism taxes will fund the new Rays Stadium," SBNation; "Report: Hotel tax revenue meant for Raiders' stadium falls short," USA Today).

DMOs usually market (1) convention centers (and the funding stream may support subsidies to land particular events), (2) develop marketing campaigns targeting various consumer travel market segments and travel professionals, (3) maintain websites and other strategic communications systems and products; (4) operate visitor centers; and (5) develop and distribute tourism marketing materials of various sorts including guides and maps.

An optional item (6) is the support of sub-city tourism efforts including "destination development" including the development of marketing campaigns.

I first learned about the concept of destination development in DC because of the work of Kathy Smith, who authored the book Capital Assets: A Report on the Tourist Potential of Neighborhood Heritage and Culture Sites in Washington, D.C., and founded the organization now called Cultural Tourism DC. DC's cultural heritage trails signage and brochure program is one of the programs launched by the organization.

Capital Assets identified local assets already visited by tourists; neighborhoods and sites that were "destination ready" with support; and areas and sites that were not ready for tourism.


Tourism Development Handbook is out of print, but except for one chapter on Internet marketing, it's still excellent. Another good resource is the Community Tourism Planning Guide by Nova Scotia Tourism.

As discussed in previous entries, DC's DMO doesn't operate a substantive visitor center, nor does it support the creation and operation of sub-city visitor centers, or have a systematic program supporting sub-city destination development.

Mostly it spends its time and money marketing the convention center.

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* I argue that "home stays" like Airbnb should still be subject to a community's regular hospitality-related taxes.

I don't think DC's tax reform is an exact model for the US

DC is the nation's only "city-state."

By that I mean that DC is a fully urbanized place (no rural or exurban land), a city with close to complete taxing power, including income taxes--with the huge exception that the city can't tax nonresident income, which among other effects means, unlike every other jurisdiction in the US, DC can't assess nonresident income tax on professional athletes (which is one way cities and states collect additional monies after subsidizing sports facilities).

Last week, the New York Times columnist James Stewart suggested ("For tax reform lessons, Congress needn't look far") that DC would be a great example for Congress to consider as a model for how to go about "tax reform" -- although tax "reform" if by reform you mean improvement seems to be off the table in favor of a tax cut for the rich.

From the article:

... in 2014 the council cut corporate and business taxes, reduced individual rates for everyone earning less than $1 million and broadened the tax base by eliminating many loopholes.

In the ensuing years, economic growth and tax receipts have surged, enabling the city to accelerate cuts that were being phased in. The legislation was not revenue neutral, in the sense that broadening the tax base offset the reduction in rates. It was a tax cut. But in a development that would surely warm the hearts of pro-growth Republicans, the economic lift was so strong that tax receipts increased, and last year hit a record.

Tax cuts were simultaneous with significant growth.  The problem with the argument is that DC's economy and population have been growing significantly over the past ten years.  It's easy to "cut" taxes when your economy is growing.

In the last nine years--despite the 2008 Great Recession--DC's population has grown by slightly more than 110,000 people ("D.C. population reaches four-decade high," Washington Post), an increase in population of almost 20% over the base number of 570,000 residents in 2007.

From 2014 when the tax cuts were approved and 2016, the population increased by about 3%, from 660,000 to 680,000. 

New condominium and apartment buildings continue to open and plans for large mixed use developments continue apace.

Income tax and property tax revenues were already increasing at an increasing rate.  Most of the new residents, excepting children, are paying out plenty in terms of income and sales taxes, and property taxes for home owners.

It's easy or at least comparatively easy to cut income taxes when the number of earners is growing and it's easy to cut property taxes when the number and size of buildings is growing, along with property values and assessments.

Plus, DC's property tax base is insulated somewhat by the inclusion of a hefty tranche of highly valued commercial property, primarily but not limited to Downtown DC.  DC's commercial property is highly valued in part as a safe place to park money from overseas, generated in countries with lower economic returns and/or more unstable economies.

Expanding the range of sales taxes had limited impact on revenue.  Complementing tax cuts by expanding somewhat the range of goods and services being taxed is likely a minimal proportion of the total revenue mix compared to the large increase in the number of people paying income taxes and rising property tax revenue from residential and commercial property.

Kansas as a lesson.  Although DC's economy is much stronger than that of Kansas, which has been wrecked by Governor Brownback's application of classic Republican supply-side tax cuts, which decimated state and local government funding, especially for schools because there was no increase in "animal spirits" and tax revenue in response ("Why Sam Brownback's tax cuts failed to make Kansas thrive," Bloomberg View; "The Kansas tax cut experiment," Brookings Institution), many of us worry about the tax cuts because of potential threats to the local economy that are out of the hands of the local government.

The economic winds buffeting DC are not favorable, and this will continue through the entire Trump Administration.  First, local employment and commercial building activity is very much susceptible to the vagaries of federal government policy, which these days is focused on reducing government spending, not increase it--except for the military.  This has a disproportionate effect on the regional economy of Washington ("Uncertainty in Washington is hurting D.C.'s job market, economists say, Post).

For example, a neighbor down the street works for a unit of the Labor Department, where next year's budget proposal calls for the unit to be downsized by 80% and hundreds of people will be fired.  Extend that example across most government agencies and you can see a tremendous negative impact on the local economy.

And the increase in military spending won't impact DC that much, because most of the local beneficiaries would be located outside of DC, in Maryland somewhat and Virginia especially.

Second, the commercial office sector is slowing anyway as federal agencies move out of DC proper,  law firms merge and contract, and as more companies reduce the amount of space per worker, leading to reduced need for commercial office space.

-- "Implications of a Trump/McConnell/Ryan Administration on DC's commercial real estate market," 2016
-- "Why Mayor Bowser is right to be leery of systematic lowering of taxes," 2015

Third, because the city's population is growing there is a greater demand for civic amenities, infrastructure expansions and improvements, and clamoring for various social programs such as an increased amount of services for the homeless and expansion of the amount of affordable housing.

-- "Town-City Management: We are all asset managers now," 2015

But this comes as the city's debt financing cap is close to being exhausted.

Conclusion.  Fortunately the city is in a much different place than Kansas.   The city is much smaller, urban, with fewer economic responsibilities.  But imagine the impact on risk management, predictability, and perception if there is a federal government shutdown, or Congress refuses, if only for awhile, to not raise the debt cap, and long term plans by the Republicans to shrink the federal government with its catastrophic effect on the local economy?

Then it's not out of the question to make the assessment that these tax cuts were foolish, that the city failed to plan for severe exogenous economic shocks that were foreseeable.

Federal tax provisions for "small" retailers help big retailers more

According to Chain Store Age ("House approves bill to help retailers with remodeling costs") the House passed a bill authorizing a 15-year depreciation period for store renovations, instead of the 39 year period required in current law.

Mayor Michael Nutter promoting Small Business Saturday in the Kensington neighborhood of Philadelphia. Flickr photo by New Kensington Community Development Corporation.

Yet, retail stores have to be refreshed every 5-7 years anyway.  

It would make sense to have a depreciation period more in line with the expected useful life of the expenditure--15 years is 1/2 to 2/3 too long a period.

Similarly, the bill approves "bonus depreciation," allowing the claiming of a deduction of half of the total costs in the first year, but only for "leased stores."

That puts small store proprietors who own their properties at a comparative disadvantage to chain stores. Along with many other tax and legal stratagems (for example, big companies put their intellectual property, like logos, in a separate corporation and require individual stores to pay royalty fees for use of the logos, depressing reportable income).