Tag Archives: municipalities

CA town: the public will help determine how a one penny sales tax increase is spent

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Amidst other changes in Vallejo, California, the community is trying something innovative involving a recent one cent sales tax increase:

And the city council struck an unusual deal with residents — if they agreed to a one-penny sales tax increase, projected to generate an additional $9.5 million in revenue, they could vote on how the money would be used. The experiment in participatory budgeting, which began in April, is the first in a North American city.

The approach was pioneered in Port Alegre, Brazil, as a way to get citizens involved in bridging the large gap between the city’s middle-class residents and those living in slums on the outskirts. Individual districts in New York and Chicago are also experimenting with the process, and residents there have expressed interest in spending money on things such as more security cameras and lighting, public murals, and Meals on Wheels for seniors.

Here is more information on Measure B the city provided before the vote over the tax. Measure B itself passed in a very close vote and it looks like the city opened up the approved sales tax to the process of “participatory budgeting” (with some disagreement) in April 2012:

A bid to draw significant public participation in the city’s budget planning was approved Tuesday night by the Vallejo City Council.

The council voted 4-3 to launch a process known as “participatory budgeting,” setting aside 30 percent of revenue collected from a sales tax hike initiative voters passed in November.

Under City Charter provisions, public-proposed uses for the estimated $9.5 million a year ultimately will require council approval.

Duly noted: this is a measure with some controversy. It will be interesting to see how this works out: how much input will the public get? Will a good number of people in the city participate in the process? How much money will the public be able to control? What happens if the public wants to use the money for other purposes than the city council?

Could this work beyond the local level?

h/t Instapundit, Via Meadia

Brookings report: zoning laws help lead to school achievement differences

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A new report from the Brookings Institution suggests that zoning laws are behind differences in school achievement:

The report found that students from poorer households tend to go to schools where scores on state standardized tests are lower while more affluent students tend to go to schools with higher test scores. The findings confirm what numerous studies and a recent Sun analysis have also found.

The average student from a low-income family in Las Vegas attended a school that tested in the 43rd percentile. The average student from a middle- or high-income family went to a school that scored in the 66th percentile, according to the report, which used state test score data listed on GreatSchools.org…

Rothwell’s research went further than other studies that looked at socioeconomic data and school performance, however. His report is among the first looking at how zoning policies affect home prices and student access to high-quality schools.

Rothwell argues municipal zoning policies that restrict affordable housing have segregated students from low-income families from their more affluent peers, creating achievement gaps in schools.

Where people can live matters. We tend to have the idea in America that anyone can live anywhere. Theoretically, this is true but economically, this is not possible as it takes quite a bit of money to move to areas with better amenities like high-performing schools. Zoning plays into this by giving local governments control over how land is used. If communities decide that land can only be used for more expensive single-family housing, then housing options are limited. The summary of the full report sums it up this way:

Across the 100 largest metropolitan areas, housing costs an average of 2.4 times as much, or nearly $11,000 more per year, near a high-scoring public school than near a low-scoring public school. This housing cost gap reflects that home values are $205,000 higher on average in the neighborhoods of high-scoring versus low-scoring schools. Near high-scoring schools, typical homes have 1.5 additional rooms and the share of housing units that are rented is roughly 30 percentage points lower than in neighborhoods near low-scoring schools.

Large metro areas with the least restrictive zoning have housing cost gaps that are 40 to 63 percentage points lower than metro areas with the most exclusionary zoning. Eliminating exclusionary zoning in a metro area would, by reducing its housing cost gap, lower its school test-score gap by an estimated 4 to 7 percentiles—a significant share of the observed gap between schools serving the average low-income versus middle/higher-income student. As the nation grapples with the growing gap between rich and poor and an economy increasingly reliant on formal education, public policies should address housing market regulations that prohibit all but the very affluent from enrolling their children in high-scoring public schools in order to promote individual social mobility and broader economic security.

A fascinating argument: eliminating some of the zoning differences across communities would reduce the educational achievement gap. However, zoning is at the heart of local government and municipalities don’t give this up easily.

“More U.S. cities set to enter default danger zone”

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A Reuters story suggests more municipalities are having trouble keeping up with their debt:

Bond defaults were $25.355 billion in 2011, or nearly five times the value of defaults in 2010, according to Lehmann. In 2012’s first quarter, defaults totaled $1.245 billion, or more than double the $522 million of last year’s first quarter.

Municipal bankruptcies, such as last November’s landmark, $4.23 billion Chapter 9 filing by Alabama’s Jefferson County mainly because of its excessively expensive sewer system mocked as a Taj Mahal project, have picked up, too.

Chapter 9 municipal bankruptcy filings doubled to 13 in 2011 from six in 2010, but still remain rare among the more than 60,000 issuers, with only 49 of the 264 cases since 1980 being towns, cities, villages or counties, according to James Spiotto of Chapman and Cutler LLP. States are ineligible for Chapter 9.

Outsized pension-deficit payments and other liabilities, as well as depressed local economies or failing government projects such as Harrisburg’s trash incinerator, often herald crises, according to Ciccarone.

While much of the focus has been on the national debt and national figures (such as unemployment, jobs created, where to set the tax brackets, etc.), all of this is trickling down to the local level. Since many municipalities and local taxing bodies are heavily dependent on property taxes, a decrease in housing values and a continued sluggish housing market suggests many communities will struggle to find revenue. In other circumstances, local bodies might be able to look to states and the federal government for monetary help but they have their own issues during this economic crisis.

I would love to see experts speculate on where this all will end up in five or ten years. Are we legitimately in danger of a lot of municipal governments defaulting? If so, how will this affect local services? How will residents respond to what will be more fees and taxes even as their services might decrease? Could the wealthier people respond with their feet and move to more financially solvent communities?

Chicken regulations in Naperville

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More suburbs have had to deal with this issue in recent years: should suburbanites be allowed to keep chickens? Here is the latest from Naperville:

The majority of Naperville council members voted Tuesday to make no changes to an existing ordinance that governs the keeping of fowl in the city, which states the birds must be kept 25 feet from neighboring homes and cleaned regularly.

City staff presented a proposal Tuesday that would place further regulation on chicken coop keepers, requiring them to obtain a permit for the birds and construct larger perimeters around the livestock. But council members opted to maintain the status quo that has regulated chicken ownership for years…

While both residents — neighbors, in fact — who spoke during public forum were on opposite sides of the fence on the issue, they agreed the council’s decision came as a surprise…

But the council’s decision has no effect on those who live in subdivisions, some of which have their own bylaws that govern the keeping of livestock.

While the article suggests at the end that there are only a few formal complaints about this a year, I suspect this is an issue that will continue to pop up. This is a classic NIMBY issue: will nearby property values decrease if a neighbor keeps chickens? It is also interesting to note that Naperville’s guidelines don’t apply to subdivisions, presumably because they have Homeowner’s Associations that already tackle this issue. (Naperville has an unusual number of HOAs – noted builder Harold Moser helped pioneer this in the city.)

This reminds me of My Blue Heaven, a study of the working class Los Angeles suburb of South Gate. In the early days of this suburb, it was common for residents to own animals and build their own homes. I suspect this sort of activity would not go over well in more middle or upper class suburbs.

If you are curious, here is what Naperville’s municipal code says about “fowl and livestock”:

1. Housing: All fowl and livestock shall be kept within a pen, coop, building or other enclosure sufficient in size and strength to confine such animals to the owner’s property, except that livestock may be tethered securely to a fixed object outside the enclosure, but only if the animal is so confined to the owner’s property.

2. Zoning: Fowl and livestock may be kept in any area in the City except as otherwise provided by this Chapter or the City’s Zoning Ordinance.

3. Restrictions:

3.1. No livestock shall be kept, housed, maintained or pastured within a distance of two hundred (200) feet of any occupied residence other than that of the owner.

3.2. No pen, coop, building or other enclosure used for the purpose of housing fowl (with the exception of homing pigeons) shall be erected or maintained within twenty-five (25) feet of any occupied residence other than that of the owner.

3.3. Every person maintaining a pen, coop, building, yard or enclosure for fowl or livestock shall keep such area clean, sanitary and free from all refuse. Such areas shall be thoroughly swept at least once every twenty-four (24) hours and the dirt and refuse shall be disposed in a clean and sanitary fashion.

3.4. All feed for fowl or livestock shall be kept in containers that are rodent-proof until put out for consumption of fowl or livestock.

Another report suggests Naperville is somewhat unusual in not regulating this issue more closely:

Homeowners on both sides of Laird’s Rivanna Court property are urging the Naperville City Council to re-examine a decades-old city law that puts no limits on the number of chickens one can have, as long as the pen is cleaned once every 24 hours and is kept at least 25 feet from neighboring homes.

Naperville is one of a few municipalities — including St. Charles, Batavia, Oak Park and Chicago — that allow residents, with a few conditions, to raise chickens at home. But in an email to council members, Laird’s neighbors stressed the city is “no longer a rural farming community but residential with nice homes and smaller backyards.”

I wonder if this is one of those issues in Naperville where formal regulations are unnecessary as social pressure would keep too many people from having chickens. One resident in the story suggests that his chicken coop was opened at night by others. I would guess that could be a lot of disapproving glances and talk if someone started building a chicken house.

More financial problems in Chicago suburbs: underfunded police and fire pensions

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If the federal government is short on money and so is the state of Illinois, then financial problems were eventually going to trickle down to individual communities, even those who would usually be considered wealthy. The Chicago Tribune details how many suburban municipalities have fallen behind in funding police and fire pensions:

Of the 300-plus pension funds across the region, only about 20 are rated by the state as fully funded…

The flaws and excesses were long masked by a strong economy, when big investment returns pushed average funding levels to nearly 80 percent a decade ago — which many experts consider to be healthy. The latest figures from 2009 show suburban public-safety pension funds, on average, have just 52 percent of the assets needed to be fully funded.

Though the true cost will vary from place to place, the unpaid tab averages nearly $2,700 for every suburban household. A strong economy could boost investment returns and lessen the liability, but experts say the financial sins of the past are too great for pension systems to merely invest their way out of them.

As lawmakers consider reforms, town leaders and unions point fingers. Unions complain towns haven’t saved enough and lawmakers failed to force them. Suburban leaders complain lawmakers required them to offer lucrative benefits without the cash to pay for them. The one thing they agree on: The recession made the problems far worse…

The state doesn’t compile figures of how many towns have done that, with such findings usually buried in individual fund audits. The Tribune reviewed every audit the state would provide — 153 of them in metro Chicago — and found regulators cited a third of their taxing districts for not providing enough cash to their pension funds.

A couple of things stand out to me about this story:

1. One issue appears to be that of fragmented suburban government. Illinois, specifically the Chicago region, is well-known for its many taxing districts and municipalities. If each community, big or small, was to provide a pension fund, there were bound to be problems when some of these communities cannot meet their obligations.

2. Residents are not going to be happy about this. There are a couple of places they might direct their anger: toward local officials who didn’t properly fund these pensions or toward police or fire unions (a common issue in more conservative locations). Residents are also likely to be unhappy if fire and police personnel, people who many citizens feel keep their communities livable and safe, are let go.

3. How would local communities explain their actions regarding funding pensions? Can they or local officials be held responsible, outside of voting against them?

Another creative way to raise suburban tax revenue: a “toilet tax”

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Nassau County, New York is considering a new tax that will bring in revenue from non-profit organizations:

Critics call the sewer fee — a “toilet tax” in Nassau County. Next year’s budget — for the first time — calls for previously tax-exempt public school districts, library districts and fire districts to increase their budgets, raise taxes, and, they fear, pass along the financial burden to taxpayers.

Democrats in the legislature are blasting the Republican county executive’s proposed “water usage fee”– that would charge one penny per gallon of water entering Nassau’s sewage system. They claim it would bankrupt hospitals, schools and more…

But the county executive said his sewer reforms would eventually lower rates for homeowners and businesses.

“I inherited a sewer district authority that’s $28 million out of balance. Nowhere else in New York state do not-for-profits get a free ride,” County Executive Ed Mangano said.

Even in the best of times, suburban communities may not enjoy the tax-exempt status of non-profit organizations. But with less favorable economic times, it is likely more communities will be looking for new revenue sources.

Although it sounds like this discussion may have just become another political issue (one party versus the other in Nassau County), these sorts of discussions will be taking place in many more suburbs across the country.

More contracted municipal work

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The Wall Street Journal reports on more municipalities contracting out city services.

Cities say they have little choice. Municipalities across the U.S. will face a projected shortfall of $56 to $86 billion between 2010 and 2012, according to a report from the National League of Cities.

The primary focus of the story is California communities.

For many of the services mentioned in the article, such as tree-trimming, residents likely won’t notice much difference.