Suburbs don’t mind money spent on highways, services that help them

Alana Semuels looks at who supports the widening of highways even as research suggests building more lanes just adds to traffic:

The support for highways could be because people in the region are moving further from the city center, to suburbs served by the highways. Between 2010 and 2015, suburbs such as Austin grew 25 percent between 2010 and 2015, while Bryant grew 19.6 percent, according to the region’s Metropolitan Planning Organization, called Metroplan. Little Rock grew up 3.1 percent in population, and Pulaski County, where Little Rock is located, grew just 3.3 percent, while Saline County grew 8.7 percent.

Suburbs often grow when highways are particularly robust; if people can quickly get out of the city center to far-flung neighborhoods, there’s little incentive for them to stay in the city. But the causal arrow runs both ways: Once there are robust suburbs, the residents there tend to support projects that will benefit them, and those projects include roads that will supposedly make their commutes faster.

Regional politics often favor spending on resources to suburbs, especially when their populations grow so quickly, according to Joseph DiMento, a professor at UC Irvine who has studied the construction of urban freeways.

“Once people move to the suburbs, they want to be serviced, and historically, the suburbs were wealthier and more politically important, so their votes would go for replacing the freeway and improving it, rather than displacing it,” he said.

But, try to raise tax monies on a regional scale for mass transit and suburbanites are often not pleased as they don’t perceive this as a benefit for them.

Come to think of it, I haven’t seen a study that shows the statistical relationship between suburban population growth and highway building. What is the strength of the relationship? This is the general argument: after World War II, the government spent money in certain ways and one path that spurred suburban growth was the construction of a federal highway system. Of course, suburbs were already growing at this point but highways certainly helped.

Census 2020 to go digital and online

The Census Bureau is developing plans to go digital in 2020:

The bureau’s goal is that 55% of the U.S. population will respond online using computers, mobile phones or other devices. It will mark the first time (apart from a small share of households in 2000) that any Americans will file their own census responses online. This shift toward online response is one of a number of technological innovations planned for the 2020 census, according to the agency’s recently released operational plan. The plan reflects the results of testing so far, but it could be changed based on future research, congressional reaction or other developments…

The Census Bureau innovations are driven by the same forces afflicting all organizations that do survey research. People are increasingly reluctant to answer surveys, and the cost of collecting their data is rising. From 1970 to 2010, the bureau’s cost to count each household quintupled, to $98 per household in 2010 dollars, according to the GAO. The Census Bureau estimates that its innovations would save $5.2 billion compared with repeating the 2010 census design, so the 2020 census would cost a total of $12.5 billion, close to 2010’s $12.3 billion price tag (both in projected 2020 dollars)…

The only households receiving paper forms under the bureau’s plan would be those in neighborhoods with low internet usage and large older-adult populations, as well as those that do not respond online.

To maximize online participation, the Census Bureau is promoting the idea that answering the census is quick and easy. The 2010 census was advertised as “10 questions, 10 minutes.” In 2020, bureau officials will encourage Americans to respond anytime and anywhere – for example, on a mobile device while watching TV or waiting for a bus. Respondents wouldn’t even need their unique security codes at hand, just their addresses and personal data. The bureau would then match most addresses to valid security codes while the respondent is online and match the rest later, though it has left the door open to restrict use of this option or require follow-up contact with a census taker if concerns of fraud arise.

Perhaps the marketing slogan could be: “Do the Census online to save your own taxpayer dollars!”

It will be interesting to see how this plays out. I’m sure there will be plenty of tests to (1) make sure the people responding are matched correctly to their address (and that fraud can’t be committed); (2) the data collected is as accurate as going door to door and mailing out forms; and (3) the technological infrastructure is there to handle all the traffic. Even after going digital, the costs will be high and I’m guessing more people will ask why all the expense is necessary. Internet response rates to surveys are notoriously low so it may take a lot of marketing and reminders to get a significant percentage of online respondents.

But, if the Census Bureau can pull this off, it could represent a significant change for the Census as well as other survey organizations.

(The full 192 page PDF file of the plan is here.)

Illinois bans creating new government bodies for four years

Among new laws in Illinois is one that limits the formation of new government units:

HB 0228: Prohibits creating new levels of government for four years.

The Chicago Tribune interprets this law:

No new units of government can be formed in Illinois for four years.

According to Illinois Policy, Illinois has the most local governments with 6,963, giving Illinois nearly a 2,000 unit lead over Texas. A four year ban presumably slows the growth of these government bodies but I still have questions about the efficacy of this law:

  1. Does this translate into savings for taxpayers? Perhaps it simply slows future costs.
  2. Does this mean that lawmakers were unable to consolidate local governments and this was the best they could do? On one hand, people decry the spread of local governments and taxing bodies but they tend to like local control when it suits their interests.
  3. Are any others states ever going to approach the number of local government units that Illinois has?

Illinois tax breaks often fail to add jobs or keep companies

The Chicago Tribune finds that tax breaks from the state of Illinois often do not work as intended:

In the first comprehensive analysis of 783 EDGE agreements, the Chicago Tribune found that two of every three businesses that completed the incentive program failed to maintain the number of employees they agreed to retain or hire.

State officials can’t say how many jobs have been created through the job program; nor can they say how many jobs EDGE companies have eliminated. The Tribune, however, found that 79 current or former EDGE recipients have reported eliminating 23,369 jobs through layoffs and closures since entering the program.

Officials have long pitched tax breaks as a competitive tool that bolsters the state’s fragile economy, and the program has seen explosive growth as Illinois battles with other states to attract and retain businesses. Leaders of the EDGE program say it has been a lifeline for dozens of companies, helping to create new jobs and improve workplaces.

But the Tribune’s analysis suggests that tax credits often do little to help companies expand or create sustainable jobs. A pattern of deals emerges in which businesses lobbied for maximum rewards and minimum requirements — and the state said yes.

Tax breaks may help politicians claim they are bringing in new jobs and money but they don’t often benefit taxpayers as much as the political and business leaders suggest. See earlier posts here and here. And perhaps the biggest issue is that once come communities or state start offering tax breaks, everyone feels like they have to play the game as well just to get a hearing from major corporations. It can then become a race to the bottom: as governments offer more and more breaks, companies benefit more and more yet the local area gets less and less.

If the Tribune‘s analysis is correct, perhaps a better route for the state would be to improve business conditions overall rather than resorting to tax breaks to simply survive.

Taxpayers pay 70% of NFL stadium costs, owners pocket 95% of the revenue

Gregg Easterbrook summarizes the research on who pays for and benefits from the construction of new NFL stadiums:

Judith Grant Long, an urban planning professor at Harvard, has shown that about 70 percent of the cost of building and operating NFL stadia has been paid by taxpayers — many not even sports fans. About 95 percent of the revenue the stadia generate is kept by team owners. It’s a deeply disturbing arrangement. Andrew Zimbalist, an economist at Smith College, has shown that NFL investments never generate the promised job totals or local economic activity. If there’s public money to spend in Buffalo, investments in infrastructure — schools, transportation, a replacement for the dilapidated Peace Bridge, improving Delaware Park — would have more of an economic multiplier effect than an NFL field.

This said, if there is one city where public investment in an NFL stadium might be justified, it’s Buffalo. Should Atlanta or Miami lose its NFL team, that would be a shame, but these cities would still have strong economies. Should Buffalo lose the Bills, this could be perceived as the “last one turns out the lights” moment, reducing the odds of a Buffalo urban recovery.

Public investment in an NFL stadium might be justified only if the facility is located downtown. The Buffalo News reports that 15 sites are under consideration for a new stadium. Two are in Toronto. Several are suburban, including an abandoned shopping mall property an hour’s drive from the city. One is near Niagara Falls, where the tourist activity is on the Canadian side, not the American side. One is on the Buffalo Outer Harbor, which is cut off from downtown by a freeway and doesn’t contribute to the pulse of urban life. Only downtown locations should be considered if public funds are spent.

Nobody would have believed 20 years ago that Pittsburgh and Cleveland could bounce back and have trendy downtowns. And nobody believes that about Buffalo now. But already underway on the north side of the city is a complex of a teaching hospital and medical research center that will be among the world’s largest and best equipped. Thousands of professionals will move to the city to staff the center. Add the NFL to downtown, and Buffalo might acquire the cachet it needs to rebound.

In other words, the research from recent years is consistent: building a publicly-funded stadium is not really a good deal for taxpayers. Major league teams will appreciate it and the owners certainly benefit but the money does not flow back to taxpayers. Yet, since the political calculus is such that no major leader wants to be the one that let the favorite team get away plus there are still sites that existing teams can threaten to move to (in the NFL, Los Angeles is perhaps more important as a potential city rather than an actual home for a team), taxpayers are likely to continue to help foot the bills for new stadiums.

Why Chicago suburbs are facing more FOIA requests

The Daily Herald reports that a number of Chicago suburbs have seen an uptick in Freedom of Information Act requests in recent years:

A Daily Herald survey of 55 municipalities showed that the number of Freedom of Information Act requests received has increased in nearly all towns over the past few years that officials have been tracking the numbers. Between 2011 and 2013, 17 suburbs saw an increase of more than 25 percent. Towns including Aurora, Hampshire, Des Plaines and Prospect Heights saw the number of requests increase by more than 50 percent.

Municipal clerks and lawyers said that responding to these requests takes staff time and money away from other responsibilities to the point of being a burden, but First Amendment experts say it is worth the cost to increase transparency of government.

The requests aren’t all coming from investigative journalists looking to expose corruption, but mostly from regular citizens looking for police reports and information about their homes or their neighbors.

There are several reasons thrown out for the increase in requests: a change in the law in 2010, people seeking more information, businesses looking for background information for their proposals and developments, occasionally a personal vendetta.

I wonder if there aren’t three broader trends that are also contributing:

1. The Internet makes all sorts of information available. And yet, government doings are either hard to track down or obscured. When the rest of the world is opening up its data, is the government keeping up? (At the same time, I’ve heard local government officials suggest the public has more ways than ever to find out things including watching meetings and reading minutes online.)

2. Trust in institutions, such as local government, has been on the decline for several decades. People want to know what local government is doing because they don’t necessarily trust them to act in their interests.

3. With an economic downturn, people are more interested in knowing where their taxes are going. This is particularly true at the local level when many suburbanites want the paradox of higher property values (meaning their investment in housing pays off) but with lower property taxes and better local services. This also leads to a mentality that local government works for the people and should have no problem processing FOIA requests.

Given the time it can take to track down these requests, I’m sure this is something local governments are keeping their eyes on.

 

High-powered lawyer to help sell the Milwaukee Bucks wants public money even as he lives in a McMansion

Here is an example of how looking at the personal McMansion of a wealthy individual can be pulled into commentary regarding that person’s public actions:

Marotta will certainly not be on the sidelines as a new arena is sought and fought over. He will be faced with the task of assembling a suitable building parcel as well as financing its purchase and the construction of a new facility. The $200 million promised by the seller and the new owners will not be enough to foot the bill.

Mayor Barrett and others have called for a regional tax to help pay for the stadium. If Marotta has to help this pass, he will get a taste of the struggle ahead by reading the Resolution Opposing a Tax to Fund a New Sports Arena in Downtown Milwaukee that was passed by the Executive Committee of the Ozaukee County Board of Supervisors in September 2013. Ozaukee County contributes to the 0.1 per cent Miller Park tax, and wants no part of another…

The first task is probably to find them in this cavernous dwelling, built in 2010. It has 17 rooms, of which 7 are bedrooms. There are 6 full baths and 3 half-baths in the home, along with “5 add’l fixtures”

Oh, we’ll find them later — off to the 5,605 square foot basement, of which 4,926 square feet is a finished rec room. That is a lot of recreating. Above is a first floor with 4,623 square feet of living space, surmounted by a more modestly sized 3,821 square foot second floor. Maybe it’s time to search around the 982 square foot attached garage with lake views and see if the kids are there, transfixed by the waves below…

By contrast, the visitor is encouraged to look at the orange structure to the south of the Marotta home. It could easily be overlooked, but upon closer inspection you can see a modern full-sized home dwarfed by the giant shadow cast by its neighboring McMansion.

This argument appears similar to the critique of McMansions offered by Thomas Frank several weeks ago: how can someone who has done well in life even think of asking for public money for a sports stadium? On top of this, studies suggest public tax dollars used for stadiums tend to benefit owners, not taxpayers. The McMansion discussed here (and it could be a mansion at over 10,000 square feet with the basement) is held up as an emblem of excess: it is very large, it is a teardown, it is an expensive house (in a nice location), and it is architecturally compromised. But, this analysis goes beyond speaking in generalities and links the negative qualities of the home to a particular person.

How to define “high-speed” rail in the United States

High-speed rail may be expanding in the United States – but it is not be “high-speed” according to European definitions.

Does that make the new trains high speed? It depends on who you ask. According to the European Union’s definition, high speed trains must be able to travel above 124 mph on conventional tracks, and at speeds over 155 mph on tracks specifically upgraded for high-speed rail.

Although the Charger locomotives feature the latest technology, with emission controls and on-board diagnostics, they’re relatively conventional. The “new” trains are based on a popular European design, and top out at 125 mph. That’s as fast as the Metroliner that ran between New York and Washington D.C. in 1969. By that definition, the new Siemens trains don’t qualify as “high speed.”…

“It is also necessary to take into account those railways which are making laudable efforts to provide high speed despite a basis of old infrastructure and technology which is far removed from that employed by the railways of western Europe.”

In other words, because the American passenger rail system is so far behind the rest of the world, any improvement whatsoever could be considered high speed. It’s an important step forward, despite the appearance that the U.S. is rejecting HSR.

Maybe we should add a modifier: these are American high-speed trains, not high-speed trains by global standards. So much for American exceptionalism…

The article goes on to note how high-speed rail isn’t proving too popular to taxpayers in several states where it has been proposed. Proponents say this may not be too much of a problem: once Americans see the capabilities of truly high-speed rail, they would avidly use it. But, this is a difficult chicken and egg problem: people don’t want to devote millions/billions to a new project that may or may not succeed but they can’t truly know the possibilities until one is built. Perhaps everyone would benefit from seeing one really popular, speedy, and consistent spoke of a system (outside of the dense Washington-to-Boston megapolis served by the Acela Express – which can go over 150 mph but averages more like 80 mph) before trying to build numerous links?

Look to the NFL for taypayer funded stadiums, sweet tax deals

Gregg Easterbrook provides a reminder of the amount of public money funneled to NFL owners in recent decades:

Judith Grant Long, a Harvard University professor of urban planning, calculates that league-wide, 70 percent of the capital cost of NFL stadiums has been provided by taxpayers, not NFL owners. Many cities, counties, and states also pay the stadiums’ ongoing costs, by providing power, sewer services, other infrastructure, and stadium improvements. When ongoing costs are added, Long’s research finds, the Buffalo Bills, Cincinnati Bengals, Cleveland Browns, Houston Texans, Indianapolis Colts, Jacksonville Jaguars, Kansas City Chiefs, New Orleans Saints, San Diego Chargers, St. Louis Rams, Tampa Bay Buccaneers, and Tennessee Titans have turned a profit on stadium subsidies alone—receiving more money from the public than they needed to build their facilities. Long’s estimates show that just three NFL franchises—the New England Patriots, New York Giants, and New York Jets—have paid three-quarters or more of their stadium capital costs.

Many NFL teams have also cut sweetheart deals to avoid taxes. The futuristic new field where the Dallas Cowboys play, with its 80,000 seats, go-go dancers on upper decks, and built-in nightclubs, has been appraised at nearly $1 billion. At the basic property-tax rate of Arlington, Texas, where the stadium is located, Cowboys owner Jerry Jones would owe at least $6 million a year in property taxes. Instead he receives no property-tax bill, so Tarrant County taxes the property of average people more than it otherwise would…

The insertion of professional football leagues into the definition of not-for-profit organizations was a transparent sellout of public interest. This decision has saved the NFL uncounted millions in tax obligations, which means that ordinary people must pay higher taxes, public spending must decline, or the national debt must increase to make up for the shortfall. Nonprofit status applies to the NFL’s headquarters, which administers the league and its all-important television contracts. Individual teams are for-profit and presumably pay income taxes—though because all except the Green Bay Packers are privately held and do not disclose their finances, it’s impossible to be sure.

It is more difficult to justify such public spending when it is laid out like this. But, the money spent is complicated by two factors:

1. Americans like football. What if they wanted to provide taxpayer dollars for football? The assumption Easterbrook and others make who point out the public money spent on football is that people who read the stories will get outraged and demand change. But, football is the most popular sport and the money problems aren’t just present in the NFL – look at how college football continues to be a financial juggernaut even as it struggles with issues of amateurism. If the money isn’t spent on football, would the public be confident that money would be spent effectively elsewhere?

2. Individual cities, states, and other bodies of government are put in tough spots when teams threaten to leave unless they get a good stadium deal. Even with studies that show the economic benefits tend to be primarily in the direction of the team owners and not the taxpayers, losing the team might be even worse. Who wants to be the politician who let the team go? On one hand, spending tax money on sports might be unpopular but so would be politicians who let a source of civic pride walk away.

Just thinking out loud, it seems like the main way politicians and local governments could fight back is to all band together and refuse to spend public money this way. In a time of tough economic competition between communities for jobs and prestige, all it takes is one city to be the escape hatch for teams. Look at how NFL teams in recent years have used Los Angeles as a bargaining chip. Even though no one has moved there, they can all say plans are in the works in Los Angeles unless you give us a better deal. At the same time, politicians across the board could examine cities without major football teams and how they “survive” the lack of a team. How does Portland make it? What about Los Angeles? San Antonio? Las Vegas? In other words, having a football team is not a necessity and there are other ways to spend the money that might go towards sports teams. Individually, cities have a hard time standing up to teams but collectively they might have the ability.

Marlins’ publicly-funded stadium not the exception among Major League Baseball teams

There is a lot of conversation today about the trade/fire sale undertaken by the Miami Marlins and how this relates to the team’s opening of a new stadium for the 2012 season that was largely funded by public money.Yet, this is a larger trend: 20 of the last 21 baseball stadiums built have been partly funded by public money.

And like nobody else, he hoarded massive checks from MLB while passing along the bill for the stadium to the taxpayers.

The Marlins can claim the money comes from tourism-tax dollars. Truth is, Miami-Dade County moved general-use monies from property taxes to free up the tourist cash. This is the dirtiest secret of Selig’s two decades as commissioner: The “golden era” of which he so often brags came off the taxpayer’s teat.

Of the 21 stadiums built since Camden Yards started the boom in 1992, the San Francisco Giants’ AT&T Park is the only one privately funded. Baseball’s business plan depended on new stadiums with sweetheart deals filling the coffers of ownership groups lucky enough to leverage politicians or voters into signing off on them. Cities signed deal after dreadful deal, few worse than the Marlins’, who paid for less than 20 percent of the stadium, received a $35 million interest-free loan to help and used $2.5 million more of public money to fund seizures.

Despite Loria and Samson’s protestations otherwise, this was always the endgame of their stadium gambit. Selig saw the Marlins’ audited finances every year. He knew they were lying. He went along with it anyway. That’s how he does business. He protects his friends. It’s why Fred Wilpon still owns the Mets. It’s why Frank McCourt doesn’t own the Dodgers.

As I’ve written about before (see here and here), studies show the construction of sports stadiums tends to benefit team owners and not the public. Teams are often able to hold a city hostage because no political leader wants to be the one who lets the favorite team go. Yet, the economic data would suggest it wouldn’t really hurt a city to do just that.

This leads me to a thought: what city would be most willing to let a team leave town for another locale? Even if pro sports teams don’t necessarily bring in money, they are also status symbols to show a city is “major league.” What will be the next team to go? One way to think about this is to look at cities that lack major teams. We could look at Los Angeles and the NFL; even though the metropolitan area has two baseball teams, two basketball teams, and two hockey teams, the city has not had a NFL team since 1994. Despite all the conversation about teams possible moving there (the Vikings were one of the recent teams though they got a publicly-funded stadium in a close vote last year), no one has moved yet. Seattle and the NBA is another interesting case; the city lost the Supersonics, now the Oklahoma City Thunder, after the 2007-2008 season and there have been recent conversations about a new stadium and team.

My guess is that the Marlins won’t be leaving Miami anytime soon though it would be appropriate if the city did renounce them. What an odd franchise overall: they were an expansion team that started play in 1993 presumably to take advantage of the growing city (the 8th largest metropolitan area in the United States) and its Latin American population (in recent years, 27-28% of baseball players were Latino), they have won two World Series titles (1997 and 2003, the year of Bartman), and held multiple fire sales.