Illinois Governor suggests freezing money provided to local governments from Illinois income tax

Economic times are tough so Illinois Governor Pat Quinn has floated the idea that the state limit how much income tax is shared with local governments:

Gov. Pat Quinn has proposed that the state bolster its own troubled finances by freezing the amount of state income taxes shared with local governments at 2012 levels, which could cost some towns hundreds of thousands of dollars.

Quinn estimates the plan would generate an additional $68 million for the state budget. Because income taxes are disbursed on a per capita basis, the impact to local budgets would be $5.30 per resident, according to the state.

But the Illinois Municipal League estimates the impact would be more than twice that — a $148 million payday for the state, but an $11.50-per-resident cut to local budgets…

Illinois’ income tax, enacted in 1969, was meant to be a shared venture between the state and local municipalities, said Larry Frang, executive director of the Illinois Municipal League. Both the state and local governments alike felt the effects of any dips or spikes in revenue, he said.

This is not a huge surprise given the issues of tax revenue facing various levels of government. To some degree, local governments should get used to this. Plus, if local government is at least partly about local control, then how much do some communities want to rely on money from higher levels of government anyway? On the other hand, raising property taxes and introducing new fees is not attractive to local governments.

Thinking more broadly about the connections between local and state government, does these ongoing economic issues suggest the relationships between the two bodies are more fragile than we might think? When times are good, this probably doesn’t come up much. What recourse do communities, or lower levels of government, have to fight back if the higher level of government, like the county, state, or federal government alter the existing relationship?

Can changes in states bring about “zero deaths” by car crash?

It may be a very difficult goal to reach but a number of states are aiming for no deaths in car crashes:

So the immediate focus is on putting an end to crashes that lead to fatalities. The roots of the program can be traced to Sweden, where 16 years ago safety officials declared that zero crash deaths is the only morally acceptable goal.The Illinois Department of Transportation adopted the goal of zero roadway fatalities in 2009 when it revised the state’s strategic highway safety plan. About 30 states have established their own programs aimed literally at driving down the death toll to zero.

A new study by the University of Minnesota evaluating the effectiveness of zero-death programs found that the states that have worked the longest promoting the four “E’s” of safety — enforcement, education, engineering and emergency medical services — have been the most successful at reducing crash fatalities.

Washington State in 2000 and Minnesota in 2003 were the first states to adopt the zero-fatality goal, the study said. Utah and Idaho also operate successful programs in which the study determined that a statistically significant fewer number of crash fatalities occurred after the zero-death initiatives were introduced.

While the research suggests pursuing this goal cuts the number of deaths, is there a point of diminishing returns or where the number is more “acceptable”? Perhaps this cause might join with other long-term wars in the US: the “war on auto deaths.” There could be some interesting work for sociologists to do here about the social construction of these goals. As the article notes, pursuing no deaths is at leaset partly a “morally acceptable goal.”

Another possible takeaway from the article which notes there has not been a death in four years on a commercial aircraft in the US: people should be more afraid of driving than flying.

States with the highest percentages of homegrown residents

The Census Bureau recently released statistics about which states have the most residents who were born in that state:

Nationally, on average, 60 percent of people are living in their native state. According to a Governing Magazine analysis, states in the interior South and Midwest tend to have a higher percentage of natives. Louisiana tops the list, with 79 percent of its population born there.

Among large metro areas, Birmingham ranks near the top: 74 percent of the metro population was born in Alabama, the 6th-highest percentage of homegrown residents among the top 50 U.S. metros…

Jim Williams, executive director of the Public Affairs Research Council of Alabama, has spent years trying to persuade governments to adopt changes to governmental practices developed in other states. Progress is difficult, he said…

There is a lot of literature in sociology and psychology establishing that a lack of contact with other groups tends to maintain stereotypes, Fording said. Conversely, contact between groups tends to overcome stereotypes.

Here is the list of the top 10 states: Louisiana, Michigan, Ohio, Pennsylvania, Wisconsin, Mississippi, Iowa, West Virginia, Kentucky, and Alabama.

It is a little difficult to look at this list and see the exact traits these states share. The regions and the cultures are similar in the South and Midwest though this doesn’t apply to Pennsylvania (maybe the western half but not so much the eastern half?) or maybe West Virginia. Other factors that may be influential:

1. Immigration rates.

2. Lack of world/global cities which tend to attract diverse groups of people.

3. Lower levels of education?

4. Density of population/more rural areas.

It would be interesting to ask residents of these states why they stay. It is one thing to stay because one likes the place versus the opportunities to move elsewhere are lacking. While Americans might romanticize small town life and talk about establishing roots, this likely varies from place to place. Certain values, such as interacting with people different from oneself or having access to cultural amenities or always being willing to move to follow job opportunities, could then trump geographic stability.

The best state to live in is North Dakota; will this change anything?

A new set of rankings suggests that North Dakota is the #1 state in which to live. Here are some of the reasons:

Lowest unemployment rate among the 50 states. North Dakota’s 3.8 percent unemployment rate is less than half the national rate.

Statewide GDP growth of 3.9 percent ranked third in the nation in 2009 behind Oklahoma and Wyoming (2010’s figures are not yet available.)

Best job growth last year. A Gallup survey reported that North Dakota businesses had the best ratio of hiring to firing among the 50 states.

Stable housing market. Across the nation, nearly 1 in 4 homeowners with a mortgage are underwater. In North Dakota, just 1 in 14 have negative equity, the fourth lowest negative-equity ratio among all the states. The state also has the third-lowest home foreclosure rate. Affordable homes are a big part of the story here; let’s just say you don’t need to overstretch to own. According to Zillow, the median home price in North Dakota is below $150,000. That’s less than three times the state’s median household income. By comparison, even after sharp post-bubble price declines, the median priced home in California is still about five times median household income.

Low violent crime rate. The incidence of violent crime per 100,000 residents in North Dakota in 2008 (latest available data) was the fourth lowest in the country and nearly 60 percent lower than the national average.

Lowest credit card default rate. According to TransUnion, North Dakotans seem to have a handle on spending within their means.

The article goes on to say that Gallup recently found North Dakota to be the 3rd happiest state in the county.

One way of thinking about this ranking is to address the typical questions about such rankings: how dependent is the ranking on what factors were considered and how they were weighted? This plagues rankings of everything from states to colleges to communities to country’s well-being.

But another way to look at this is to ask whether the ranking will have any impact in the real world. This seems akin to the issue of substantive significance: statistics or data might suggest several variables are related but this doesn’t mean that this relationship or finding makes a big difference in everyday life. If North Dakota really is #1 based on a variety of useful measures, does this mean more people will move to the state? People move for a variety of reasons: jobs, to be by family, for certain climates (warmer weather) or atmospheres (the excitement of creative class cities or more sophisticated places), for education, to escape certain issues (crime, poverty) and benefit from the advantages of certain places (schools, parks, family-friendly, kid-friendly). But would anyone ever move to North Dakota based on this ranking? Will it lead to more businesses taking a second look at locating in North Dakota rather than big cities (or their suburbs) like New York, Chicago, Los Angeles, or elsewhere?

Another possible area of impact are perceptions about the state. Will the state’s status or prestige increase due to this ranking? If the state is seen as successful by other states, they might emulate North Dakota’s policies.

Overall, if North Dakota was #1 for decades, would anything really change?

(A related issue: if people did start moving to North Dakota in large numbers, would the state be able to maintain its top rank on this list?)

Data on the growing conservatism of the American public

A number of commentators have explored recent data from Gallup regarding America’s increasing conservatism. Richard Florida takes a stab at the data here. Here are Florida’s conclusions:

Conservatism, at least at the state level, appears to be growing stronger. Ironically, this trend is most pronounced in America’s least well-off, least educated, most blue collar, most economically hard-hit states. Conservatism, more and more, is the ideology of the economically left behind.  The current economic crisis only appears to have deepened conservatism’s hold on America’s states. This trend stands in sharp contrast to the Great Depression, when America embraced FDR and the New Deal.

Liberalism, which is stronger in richer, better-educated, more-diverse, and, especially, more prosperous places, is shrinking across the board and has fallen behind conservatism even in its biggest strongholds. This obviously poses big challenges for liberals, the Obama administration, and the Democratic Party moving forward.

But the much bigger, long-term danger is economic rather than political. This ideological state of affairs advantages the policy preferences of poorer, less innovative states over wealthier, more innovative, and productive ones. American politics is increasingly disconnected from its economic engine.  And this deepening political divide has become perhaps the biggest bottleneck on the road to long-run prosperity.

Interesting thoughts. A few questions about this:

1. Is this a long-term trend or a relatively recent development that could be reversed relatively quickly?

2. How might these demographics tied to each party interact with the public image of the parties that suggests Republicans are about the wealthy and Democrats are on the side of the working class?

3. Does this suggest that the economic engines of America are primarily in Democratic areas (which I assume Florida would see as being located in central cities and the surrounding areas)? Is this the case because of particular Democratic policies or is this the result of other factors?

4. What would an analysis beyond correlations reveal? How do these different factors interact?

How other states see Illinois’ income tax hike

The news this week that Illinois will have higher personal income and business taxes has spread to nearby states. According to this AP report, “neighboring states” are “gleeful” over this news:

Neighboring states gleefully plotted Wednesday to take advantage of what they consider a major economic blunder and lure business away from Illinois.

“It’s like living next door to `The Simpsons’ — you know, the dysfunctional family down the block,” Indiana Gov. Mitch Daniels said in an interview on Chicago’s WLS-AM.

But economic experts scoffed at images of highways packed with moving vans as businesses leave Illinois. Income taxes are just one piece of the puzzle when businesses decide where to locate or expand, they said, and states should be cooperating instead trying to poach jobs from one another.

“The idea of competing on state tax rates is . . . hopelessly out of date,” said Ed Morrison, economic policy advisor at the Purdue Center for Regional Development. “It demonstrates that political leadership is really out of step with what the global competitive realities are.”

A few thoughts:

1. Mitch Daniels watches The Simpsons? Might this admission hurt his possible presidential run or would it help him sell a hipper image? In the minds of some, perhaps where the analogy breaks down is that the Simpson family always seems to turn out all right in the end.

2. Income taxes are just one factor that businesses consider. I would like to read more about this at some point. For example, the conventional literature on suburban development suggests that low taxes is one of the reasons that residents and businesses decided to move out of the city in the first place. It would be helpful to know what are the “most important” factors that businesses consider – is income tax a lesser factor or a greater factor?

3. How many businesses will actually move to Wisconsin or Indiana or elsewhere and is there a way to predict this? It is true that Americans can vote for certain policies or actions by moving. Taxes may even be part of the reason the Sunbelt has grown in population in recent decades. At the same time, there are other factors beyond taxes that anchor people or businesses to certain places. I was intrigued with this question when living in South Bend, Indiana. Some people said they couldn’t wait to leave. Others wanted to stay. What pushes people (or businesses) to the point where they actually will move? Moving is not an easy process – it requires quite a bit of change and money (though money might be saved in the long run).

3a. The opinion of Wisconsin or Indiana held by Chicago area residents is often not the highest. Are these tax increases enough to push people toward places that they chose not to move to before?

3b. Is this “gleefulness” from other states tied to larger issues other states with the state of Illinois?

Sporting events and human rights

With FIFA’s recent awarding of the 2022 World Cup to Qater, some commentators have discussed whether the expansion of football (soccer) was the overriding principle in the decision. Ann Killion of Sports Illustrated suggests the decision didn’t really account for human rights at all:

Amnesty International and raise serious concerns about Qatar from a human rights perspective. A 2010 report by the Office of the United Nations high Commissioner for Refugees rated Qatar “not free.” While women have been granted some rights in recent years, in practice they have very little ability to pursues those rights. In 1996 a gay American citizen was sentenced to six months in prison and 90 lashes…

Using a mega-sporting event as an instrument of social change is a dubious proposition. Did human rights improve in China after the Beijing Olympics –or are restrictions on freedom even greater now?

Is Qatar going to magically transform for one month of football 12 years from now? Are football fans going to be able to freely drink a cold beer in the 120-degree heat? Are women and gay visitors going to be accepted?

Somehow I don’t think the 22 men of FIFA’s executive committee really care.

Should a sports body, such as FIFA or the Olympics, take human rights into consideration? This is an interesting discussion. FIFA claims to be about football all over the world, hence their recent plans to have the World Cup be hosted on multiple continents. But whether this spreading is motivated solely by money or about truly sharing the world’s game is another matter.

If a sports body did require certain levels of human rights for countries to host (or to be able to send athletes), could this change any policies anywhere? And if it didn’t change state policies, would it be harming individual athletes who are not responsible for the stance of their home nation? The only example I can think of is that of South Africa where they were not allowed to participate in the Olympics until the apartheid policies changed.

On the basis of human rights, would athletes and nations be willing to boycott a worldwide sports body like FIFA or the Olympics?

Ultimately, we may have make a judgment about whether human rights or money is a bigger motivating factor for sporting bodies and nations. And if money does seem to be the main factor, the task for human rights advocates is to figure out how to counter.