Unpopular revenue stream for Ohio inner-ring suburb: speed cameras

The AP has an interesting profile of how Elmwood Place, a small suburb adjacent to Cincinnati, became quite unpopular for its speed cameras.

Settled by German farmers and laborers who came up from Appalachian Kentucky, Elmwood Place was incorporated in 1890. Like many “inner-ring” American suburbs, it hit its peak many decades ago. Older residents recall bucolic times of moonlit concerts and tire swings hanging from backyard trees.

But outsourcing of blue-collar work made life tougher for many residents, and the village’s incomes and housing values fell well below statewide averages. Housing stock deteriorated to the point where you can buy a two-bedroom fixer-upper for less than $60,000.

When William Peskin joined the police force in 1998, there were nine officers. Now the police chief is the only full-time law enforcement officer left. He said concerns grew after accidents around the elementary school; village officials looked into traffic cameras and became convinced that they were the most practical way to make the village safer.

Cameras at the village limits and in the school zone dramatically curtailed speeding once citations started going out, Peskin said. From 20,000 speeders clocked in a two-week trial period last summer, the number soon dropped to a quarter of that.

Former county prosecutor Mike Allen filed a lawsuit against the town. Among the plaintiffs: the Rev. Chau Pham, who said church attendance dropped by a third after that Sunday when so many congregants — including him — were ticketed; David Downs, owner of St. Bernard Polishing for 25 years, who said long-time customers had vowed to shop elsewhere because they had been ticketed; and a Habitat for Humanity worker who was cited four times.

“Elmwood Place is engaging in nothing more than a high-tech game of three-card monte,” Judge Robert P. Ruehlman wrote March 7 in a colorful opinion that has heartened camera foes across the country. “It is a scam that the motorists can’t win.”

The judge said the village was on pace to assess $2 million in six months (the village’s annual budget is $1.3 million). Maryland-based Optotraffic, owner and operator of the photo enforcement system in return for 40 percent of revenue, had already reaped $500,000 in about four months.

While the larger article is more about the legality and popularity of speed cameras (and they seem to be quite reviled, even in light of arguments about safety), it hints at a larger issue: how can inner-ring suburbs raise enough revenue to keep their communities and local services going? We have hints elsewhere in the article that Elmwood Place is struggling. It has a limited population, the tickets stretch the budgets of residents who already don’t have much money, and the police force has dwindled. So, if we take safety and irritation over getting tickets out of the equation, what realistically can be done in this community? Outside of some unlikely large developer suddenly taking an interest, here are a few possible options: annexation into Cincinnati (which is rare these days – suburbs started resisting big city annexation starting in the late 1800s in the Northeast and Midwest) or outsourcing a number of key services (a few California communities have pursued this – see here and here – while some Chicago suburbs have turned over policing to county sheriffs).

More broadly, a number of American inner-ring suburbs face the issue of how to raise revenues in declining or struggling communities to provide basic services. This has led some to argue that we need more metropolitan revenue sharing so struggling suburbs or neighborhoods could benefit from wealthier regional municipalities.

Cory Booker uses his social networks to funnel Wall Street money to Newark

Newark mayor Cory Booker has found a way to bring needed money to his city: work his wealthy social networks.

“The room is packed; you had every major hedge-fund, private-equity person,” recalls Joseph Shenker, chairman of law firm Sullivan & Cromwell LLP.

Booker holds guests spellbound using the Hebrew phrase “tikkun olam,” or fixing the world, to describe Ackman’s generosity. It’s a notion Booker has adapted to his city 12 miles (19 kilometers) west of Wall Street, and the moneyed elite are buying in…

“One of the things Cory Booker has done is turned Newark into a national cause,” says Shenker, 55, a New Yorker who remembers watching TV footage of the 1967 riots that left 26 dead. “He has made it a serious issue for the United States.”

Booker, midway through his second four-year term, has raised more than $250 million in donations and pledges for a city where the previous three mayors were convicted of or pleaded guilty to felonies after leaving office.

Mining a network stretching back to Stanford University and Yale Law School, Booker is promoting New Jersey’s largest city as a lower-cost alternative to New York and overseeing nonprofits to fund everything from security cameras to midnight basketball tournaments. Benefactors view Booker as somebody they can work with after decades of corruption, says Larry Sabato, director of the Center for Politics at the University of Virginia.

This reminds me of some of the public-private efforts also being undertaken by Chicago Mayor Rahm Emanuel. If major cities are facing budget issues, this is one way to get money: work with wealthy business people, offer them some results/benefits of investing, and then use the money as you wish.

I could imagine some potential issues with this:

1. Is this a sustainable long-term solution? What if another cause becomes more attractive? What if the city problems become too big to be dealt with using private money?

2. Do the donators have any sway or influence of how the money is used? If so, or, perhaps even more important, if there is even the perception of this, the public may not appreciate this.

3. Generally, does this suggest that it is primarily the powerful people in society, people like important elected officials and wealthy businesspeople, who really to get to decide what gets done? Who really controls a city: the people or those with money and clout?

4. What happens if this money doesn’t lead to much improvement? In business terms, what if there is not a high return on investment?

City locations straddling the fine line between acceptable and edgy

Certain urban neighborhoods draw attention because they are “edgy” and offer something different than mainstream American locations. What happens when these “edgy” areas start to disappear or start to become established, mainstream places? Here is a look at this process in New York City:

Around countless corners, the weird, unexpected, edgy, grimy New York — the town that so many looked to for so long as a relief from cookie-cutter America — has evolved into something else entirely: tamed, prepackaged, even predictable.

“What draws people to New York is its uniqueness. So when something goes, people feel sad about it,” says Suzanne Wasserman, director of the Gotham Center for New York City History at the City University of New York…

If there’s one thing that doesn’t change in New York City, it’s nostalgia. Consider Mayor Fiorello La Guardia. After his election in 1934, he worked to remove the pushcart peddlers clogging the streets of the Lower East Side, viewed by many as a problem.

Once they were gone, people missed them.

A couple of thoughts about this article:

1. Cities thrive on these edgy or odd locations. The whole city doesn’t have to be different but young people (and perhaps even the Creative Class) tend to like these edgier locations. When it becomes too mainstream, people move on to the next novelty. But the character of a city is expected to be more unique and odd than a typical suburban setting.

2. The article highlights how people generally don’t like change, even if it is dealing with issues they once thought were problems.

3. I wonder how much money this has been worth to New York City. For example, what kind of taxes did the seedy Times Square bring in compared to the sanitized and Disneyfied version of Times Square? Certainly, some of these areas are now more palatable to suburban residents and families, broadening the group of people who might visit a location.

4. This is a reminder that what is now “edgy” or “cool” likely won’t stay that way for long. Cities, in particular, change fairly rapidly as new residents and businesses move in and out. I’m sure more edgy places will pop up in New York City.

4a. Could a city develop a “historical preservation district” (or something like it) to protect an edgy establishment or block? By making it official, does the site automatically lose some of its edgy status?

Oh Canada

I’ve made the point here before that the music industry inexplicably declines perfectly good revenue sources simply because they are “less” than what they are expecting.  At the risk of Monday-morning-quarterbacking their business model, here’s more proof from north of the border, courtesy of Michael Geist:

Pandora, the popular U.S. online music service filed for an initial public offering last week, provided new insight into hugely popular company that spends millions of dollars in copyright royalties. Pandora users listened to a billion hours of music in the last three months of 2010. Given U.S. laws, the Pandora prospectus notes that it paid for the privilege of having its users do so, with the company spending just over half of its revenue on copyright fees – $45 million in the first nine months of 2010.

The numbers are striking since it points to a growing source of revenue that is largely being missed in Canada. Millions of dollars are now generated from online streaming royalties in the U.S., yet many companies are avoiding the Canadian market. The reason, as Pandora explained last year, are the royalty demands of the major record labels. As Tim Westergren stated last fall, “as long as rights societies take this approach, they will prevent Pandora from launching to Canadian users.” While CRIA tried to claim that the decision to avoid the market was a function of Canadian copyright law, Pandora indicated that it is the fee demands, not the laws that are the stumbling block. With millions now being paid for streaming music in the U.S., it is notable that Canadian interests would seemingly prefer to receive nothing rather than the millions that could potentially be on the table.

Battle over downtown land in Brookfield: private owners wants a church versus village’s long-term downtown plans

The Chicago Tribune has a story about a battle over one area of possible development in downtown Brookfield, Illinois. Though it may be an relatively small development in a relatively small community, it illustrates a classic struggle in older suburbs: a property owner versus a community’s long-range plan.

On one side is a local resident who bought a significant piece of downtown property because she wants to build a larger building for her Methodist church and provide a place for families and teenagers to hang out. On the other side is the village who has a long-term plan for the downtown that includes using this land for tax-revenue generating purposes.

Here is some more detail about the discussion between the property-owner and the village:

After the vote Francis said she was disappointed but undaunted. She has invested more than $1 million and owns the 14 parcels of empty land and vacant buildings that form the triangle between Grand Boulevard and Washington Avenue, and she vowed that the church/community center will go there even if it takes years…

And village staff and the planning commission stressed that the project does not comply with the long-term 2020 plan. That plan calls for a mixture of businesses to attract customers and boost sales tax revenue along with residential development that would provide customers to those businesses during the day and evening hours.

“I just cannot bring myself to say this is a good project for that area of town,” Trustee Michael Towner said before the vote.

He acknowledged that new development has been slow in coming to the area, but said that just because it is the only proposal doesn’t mean it should be approved.

Both of the proposed uses for the land could be good: new businesses would bring in new tax revenues while a church/community center could help bring people into the downtown area as well as improve the chances for this church.

But in the end, Brookfield seems very concerned about not letting the property go off the tax rolls. How long will this woman fight the village or could they come to some compromise?

Mortgage interest tax deduction being discussed

With the federal government looking for more money, a budget deficit commission has been discussing possible changes to the tax code to bring in more revenue. One option among a number of options: limiting or revoking the mortgage interest deduction.

Whatever this commission recommends, I can imagine the political fights that may ensue.

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

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.