Tag Archives: budget deficits

Paying for Austin’s permitting backlog which may be partly due to its McMansion ordinance

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Several years ago, Austin enacted an ordinance intended to reign in McMansions. But, that ordinance may have contributed to a backlog of permits which the city is now trying to tackle:

The directors of the city’s planning and permitting departments estimate it would take $400,000 to hire temporary workers and pay for overtime to eliminate the current backlog in the next 90 days…

Next year the department plans to ask for $1.6 million in additional money to fund 11 new positions. This memo comes as the city is just launching its annual budget process. Over the next few weeks, every department is going to be compiling a budget wish list, which eventually is sent to the City Council…

Some of the blame for the three-week delay in residential planning and permitting was placed on the “complexity” of the city’s McMansion ordinance, which limits housing sizes in certain neighborhoods. “As such the department will recommend changes to the (land development code) that will simplify the McMansion provisions and will extend turnaround times for those types of reviews to ensure that there is sufficient time to perform a thorough review,” the memo states.

The planning and permitting departments, which used to be one department called Planning and Development Review, are responsible for approving all real estate development in the city, from housing remodels to new subdivisions.

It can take some time to see how ordinances actually play out and perhaps the initial ordinance can be “smoothed out” for this sort of process. Communities can also run into this problem if they have high rates of growth. Austin is a desirable place for construction so it may make sense that it has a lot of permits to deal with.

I wonder how much these decisions to speed up the permitting process are driven by builders and developers who generally want to move as quickly as possible. If there is a bit of a delay in the process, would these builders actually cancel their projects or go elsewhere? Builders and developers are often powerful and are viewed as important harbingers of economic growth. Yet, isn’t Austin so desirable that a delay won’t harm things much? Granted, lots of people might want more efficient government but that also may just require more government employees.

Broke highway fund might mean up to 250% increase in pay-per-mile tax

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Here is more grist for the rumor mills about a pay-per-mile driving tax: a new GAO report suggests the tax will need to be increased from current levels.

An on-again, off-again move by the Obama administration to scrap the federal gas tax in favor of a pay-per-mile fee would boost the tab to Americans as high as 250 percent, raising their current tax of 18.4 cents a gallon to as high as 46 cents, according to a new government study.

But without a tax increase, said the Government Accountability Office study, the government’s highway fund is going to go dry. One reason the fund is going broke: President Obama’s push for fuel efficient cars has resulted in better mileage, and fewer stops at the pump.

The GAO study is just the latest review of federal spending that paints a grim picture of the nation’s infrastructure. Just keeping spending at current levels, the GAO said, would require a near doubling of the gas tax to 32 cents a gallon, and that would jump to as high as 46 cents should the federal government add spending to fix crumbling infrastructure and build new roads.

The average driver pays about $96 a year in federal gas taxes, said GAO. Should the administration seek to raise the highway trust fund from $34 billion to the $78 billion needed to fix and maintain roads, that could rise to $248. Translated into a pay-per-mile plan, drivers would face a tax of 2.2 cents per mile compared to the 0.9 cents they pay now. Trucks would pay far more.

Infrastructure and driving are not cheap. I imagine this might easily be the most unpopular tax in years even with its relatively small impact on individual drivers. How can the federal government make driving, a necessity in America due to our planning and past policies plus a favorite activity of Americans for decades, more expensive?

Could a new Chicago casino be a cultural hub?

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Chicago Tribune critic Chris Jones argues that the inevitable Chicago casino should be more of a cultural hub than a gaming paradise:

Instead, it should be viewed as a major new cultural hub, which happens to have a little gambling going on alongside its many other attractions.

And that won’t happen unless Chicago’s creative professionals — its architects, entertainment executives, chefs, artists, actors, music promoters, cultural officials — hold their noses and overcome, as did the former street performers of the Cirque du Soleil more than two decades ago, whatever qualms they may have about becoming involved with gambling, which will arrive with or without them. They must grab hold of this civic debate right now, before the chance is lost for good.

The main energy of a Chicago casino should have everything to do with experiencing architecture, watching spectacular shows, eating at world-class restaurants, interacting with thrilling technological art and the like, and as little as possible to do with gambling. When winners are few, the core activity, experience elsewhere has shown, is more frequently depressive than ecstatic. The casinos’ commercials showing constant excitement at the slots are, as anyone who has spent time in a casino late at night will attest, illusions.

The only thing the actual gambling would bring to the table is the revenue that will make other great things possible in what could be an intensely creative building, one of the few big-ticket cultural developments that actually could pay for itself and get built in a barely recovering economy, rather than languishing as a costly, unfunded dream.

This is an intriguing idea – and one that might be too aspirational. The conversation about casinos in Illinois has been primarily about money as state and local governments are in desperate need of cash. My primary question to Jones would be whether there are actual models to follow here – are there urban casinos, outside of Las Vegas, that meet the goals he suggests or would Chicago be doing a whole new thing here? What would it take to have both a profitable casino as well as one that could be a cultural center? Where would such a cultural casino be located that could build upon existing tourist flows while also attracting new crowds that would be drawn to a casino? Historically, casinos tend not to have the best reputation as they attract certain kinds of crowds so building a world-class casino and cultural hub would be a big coup if done well in Chicago.

Quiet plans for private illegal immigrant prison anger Florida town

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Here is an interesting story about quiet plans to build a privately-run prison for illegal immigrants in a wealthy Florida town that helps illustrate the issues of having private prisons, NIMBY concerns, and immigration:

Only the leaders of Southwest Ranches kept their plans quiet from residents for almost a decade, and the project has now ballooned into what would be among the federal government’s largest immigrant detention centers. The town would have to pay $150,000 each year to keep the prison, but officials say the town would turn a profit by getting 4 percent of what U.S. Immigration and Customs Enforcement pays the company operating the prison to hold inmates there.

Many residents finally caught wind of the idea this year, when the immigration agency announced a tentative deal, and they’re angry. They’ve held protests at public meetings, contemplated whether to recall the mayor before his March election and whether to amend the town charter to make it easier to fire the city attorney pushing the deal.

The objection over the prison has created an odd set of allies among the town’s affluent residents, many of whom are wary of illegal immigrants, and longtime activists who fight for immigrants, legal or not…

But according to Mayor Jeff Nelson and others involved at the time, the plan for some kind of prison run by Corrections Corporation of America, the nation’s largest private prison operator, was always integral to Southwest Ranches’ ability to survive.

The town, a self-described “rural lifestyle community” located southwest of Fort Lauderdale, is for the equestrian set. There are several very interesting cross-currents in this story:

1. Lots of towns need revenue. Not only will Southwest Ranches earn money per inmate but there will be jobs at the prison.

2. Immigration is a hot-button issue. Shouldn’t people in town opposed to illegal immigration welcome such facilities?

3. But, of course, those worried about illegal immigration probably don’t want the prison right next to them. Classic NIMBY situation – build it somewhere else.

4. Local officials have done this quietly and it appears residents may not be able to do much at this point about halting the process.

The conclusion of this story makes it sound like the NIMBY concerns win out – as one resident says, “In the opposition to the prison, both sides of the immigration debate are represented.” I can’t say I’m surprised – what wealthy community would want a prison in town? If the private company doesn’t end up building in this town, how difficult will it be for them to find another town who needs the revenue? And if this community does indeed need revenue, would these same residents be willing to give up services or pay higher taxes?

Chicago looks at 63 ways to raise revenue

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Following up on a report this week that says American cities are facing falling revenues, a new report for the City of Chicago looks at 63 different ways to raise revenue. According to the powers that be, some of the ideas have merit while other are “non-starters”:

In a statement Tuesday afternoon, Emanuel — who must present his budget plan next month — said several of Ferguson’s ideas are “promising” and will be given serious consideration. But the mayor said “raising property taxes, income taxes or the sales taxes is off the table. And asking drivers on Lake Shore Drive to pay a toll is also a non-starter.”…

Ferguson’s report also suggests imposing a $5 London-style congestion fee on for driving in the downtown area during rush hours. The fee would be collected in an area bounded roughly from North Avenue south to the Stevenson Expressway, and from Halsted Street east to Lake Michigan, although it extends as far west as Ashland Avenue between Lake Street and the Eisenhower Expressway…

In addition, Ferguson also suggests creating a 1 percent Chicago city income tax, much as New York City imposes, for new revenues of $500 million per year. In suggesting the tax, Ferguson’s report points out that the State of Illinois increased its income tax to 5 percent last year, but froze the amount distributed to municipal governments, thus effectively reducing the percentage of the tax that cities receive…

Ferguson also suggests eliminating the city’s more than 160 Tax Increment Financing Districts, where property tax dollars for schools, parks, and other taxing districts are frozen for at least 23 years, so that all property tax increases afterward to go into a fund to improve struggling neighborhoods. Although TIF districts generate about $500 million a year, Ferguson says $100 million in new revenues could actually be generated by eliminating them and returning all property tax revenues to the city and other taxing bodies.

It would be interesting to see look at this document to see how many of the proposed options are already in place in other cities. Additionally, how many current revenue generating schemes in Chicago are used elsewhere? Why not learn from the “best practices” (or “necessary practices”) in place elsewhere?

A number of these ideas would generate significant conversations/controversies. There a number of people who have suggested congestion pricing for big cities but actually putting this into practice and selling it to the car-hungry American public is a difficult task. The smaller options, like changing the garbage system, would probably prove more popular or at least easier to implement but they probably wouldn’t have the kind of financial impact necessary to help the city fight a $635.7 million budget shortfall.

Mayor Rahm Emanuel may have impressed people so far but can he survive this upcoming budget battle?

An innovative revenue stream for suburbs: exclusive advertisements on city property

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Naperville, Illinois is considering a new tactic to provide for funds for the city’s coffers as there is nearly a $5 million budget shortfall projected for next year:

Naperville is considering an unusual option for long-term revenue: giving corporations exclusive rights to advertise on city property.

In a memo to the City Council this month, finance director Karen DeAngelis cited several examples of how this could work, including a program in which KFC pays for pothole repairs in cash-strapped cities in exchange for stamping the fresh asphalt with the chicken chain’s logo.

Naperville also could sell the naming rights of buildings or allow companies to advertise their products as “the official drink” or “the official burger” of the suburb for a fee, DeAngelis said.

“It’s not something we’ve done before, so we would be on the leading edge and we would need to be careful,” she said in an interview.

This might lead to some very interesting scenes – “Naperville City Hall, brought to you by Geico.” I imagine such ads might be attractive to businesses for the amount of people who might see them, particularly in a vibrant downtown Naperville.

Would a majority of suburban residents go for this? As one expert suggests in the story, this could lead to some negative repercussions and a process of “NASCAR-ization.”

If the city of Naperville couldn’t raise a significant amount of money with a program like this, would it be worth doing it on a small scale or would it just lead to more trouble than its worth?