Growth & Justice Blog

Top priority for transitway development should be employers and jobs

You are a policy-maker and you have a tough choice between  two major development proposals for the same site on a major light-rail line or transitway.   All things being equal, which do you choose:  a major employer or a large housing complex?

If overall accessibility improvement and employer access to labor is the goal, take the employer, says new research presented this week at the 23rd Annual Transportation Research Conference in St. Paul this week.   

The research by University of Minnesota Humphrey School Assistant Professor Yingling Fan was complex and aimed at planning professionals.   But the bottom-line key finding was straightforward:  "Locating new jobs near transitways produces larger increases in accessibility than locating new housing near transitways.''   Getting these fundamentals right are important because by 2030 we likely will have an integrated network of 14 transitways up and running in the Twin Cities, ranging from light-rail to commuter rail to express bus lines.   Few public investments are more important for business growth than transporation infractructure.   Equally important is better access for a workforce that is increasingly comprised of low- and middle-income communities of color, and who need much better connectivity to jobs in the new economy. 

Fan's research was sponsored by the McKnight Foundation, the Jay & Rose Phillips Foundation and the Surdna Foundation.   Abstracts from the conference provide rich state-of-the-art thinking on a wide array of transportation investment issues.

 

Dane Smith

 

St. Paul resident and son inspecting Central Corridor construction in downtown St. Paul (Metropolitan Council photo)

Minneapolis Promise makes progress in getting kids on early college track

Research shows that getting kids and their parents in a post-secondary mindset as early as possible -- creating not just hope but an expectation for college attainment -- makes a big difference in whether they get credentials.

Minneapolis Mayor R.T. Rybak and his top economic development official, Mike Christenson, without a lot of fanfare, have been working this angle for years.  Every year in the fall Mayor Rybak addresses every 9th grader in the city with a message and specific programmatic inducements that encourage them to compete for summer jobs and scholarships for college, or that put them on the post-secondary track.

Christenson, director of the Minneapolis Department of Community Planning & Economic Development, and a Growth & Justice Policy Fellow, summarizes the success of those efforts in a recent MinnPost Community Voice column, key parts of which we reprint here: 

 

 

"Let's begin with the story of Alex Glaze. Alex and his twin sister grew up in poverty and were removed from their mother's home early in life. Alex quickly learned that if he needed a ride to school or school supplies, he was on his own. He began working in junior high to take care of household needs. At 18, Alex and his sister were told to leave their father's home for good.

After graduating from Southwest High School, Alex worked in the Minneapolis mayor's office as a STEP-UP intern. This summer, he joined nearly 2,000 other STEP-UP interns and dozens of employers to celebrate their summer accomplishments. For many interns, it was their first work experience. Like so many of us, they described their summer jobs as their first big break...

....The summer job is one of three parts of the Minneapolis Promise offered through Achieve Minneapolis. Mayor Rybak visits assemblies of ninth-graders in each Minneapolis public high school every fall. There, he lays out a compelling alternative to street life. Every Minneapolis youth may compete for one of 2,000 summer jobs, must complete a college and career map called "My Life Plan," and can apply for thousands of scholarships through Minneapolis Community & Technical College, Augsburg College, the University of Minnesota, Admission Possible, the Children's Defense Fund, the McGuire and Wallin and Page Foundations and many more programs.

State and city leaders from all sectors worry about the overwhelming challenges of the achievement gap in Minnesota. Populations of color trail others in measures of educational success at a nation-leading rate. We're a proud state, and national leader in so many categories, but this is a leadership position we need to vacate. After eight years, the Minneapolis Promise offers hope. A combination of summer jobs, career and college plans, and scholarships adds up to more than the sum of its parts...[and]...if the Minneapolis Promise continues to grow, the achievement gap will shrink. Here are the facts:

•    Over 82 percent of the STEP-UP and city summer interns are persons of color.
•    More than 900 students have attended MCTC under the Power of You program, and the number of Minneapolis high-school graduates has more than doubled at MCTC in five years.
•    The University of Minnesota has admitted 166 STEP-UP interns since 2006. 
•    ACT testing and college participation rates from the Minneapolis high schools continue to grow.

...Minnesota's future work-force challenge will be to inspire populations not likely to attend college to hear this promise. In Minneapolis, we have found that summer jobs join with college supports to boost college participation. Let's hope that miracle can go to work, first through a summer job, for all Minnesota youth like Alex. And let's hope that the business community, which has kept this promise in Minneapolis, will inspire others as well. One last thing: Alex Glaze is in the freshman class at Stanford this fall." (Bold italics added).

The punchline, about an impoverished Minneapolis child, benefiting from broad community support, smart taxpayer investments combined with private-sector partnerships, entering prestigious Stanford University, tells it all.

--Dane Smith

"More Bang for Your Buck" should be required reading for Minnesota policy types

Peter Heegaard is a former executive for a financial firm, and he's well-known in Minnesota public policy circles as a leader with a strong social conscience, a great combination of heart and  passion for progressive change and hard-headed analytical sense on dollars and cents.  His new book, "More Bang for Your Buck,'' should be required reading for policy wonks in Minnesota who want to be on the cutting edge of what works in human services, and more important, how to tell.  Two subtitles on the cover summarize the contents: "Good News for Taxpayers, Public Officials, Philanthropists & Non-profit Managers,'' and "How Cost/Benefit Analysis Can More Effectively Promote the Public Good."

The book brings state-of-the-art thinking and many actual case-by-case calculations to the emerging efforts to show the return from public and nonprofit invesments in human capital, primarily education, workforce preparation and other human services.  Heegaard's book explains with lively detail how leading Minnesota nonprofit groups, such as Admission Possible and Twin Cities Rise, and others, many of which benefit from taxpayer support, have been able to document with cost-benefit analysis that their work with human capital is in fact returning an investment to the economy and to society.

I like this passage in the introduction: "Enough examples of high payoff civic investments now exist to make a very strong case that the art of giving or philanthropic investing, including government budget decision-making, can create new solutions to age-old problems, while at the same time improving the returns on our taxable income.''  The book is available at Nodin Press.

--Dane Smith 

Growing together: using equity to spur growth

Speakers at an event last week made a powerful and compelling case for equity as a growth strategy.

Minnesota stands out for some striking inequities tied to race – embarrassing disparities when it comes to educational attainment, unemployment rates, income levels, poverty and other important measures of both individual well-being and the economy.

A problem? Yes. A challenge? Yes. An opportunity? Absolutely!

Speaking at an Anchoring Equity presentation, coordinated by the Metropolitan Council, the Northwest Area Foundation and others, john a. powell noted that Minnesota tapped the potential of women in the state decades ago by advancing opportunities at a time when women faced barriers and many argued, for example, that education was wasted on women.

As a result of increased equity for women, a whole new segment of the population put its talents to work and helped move forward the Minnesota economy and the prosperity of the state’s families and households. The United States did likewise, well ahead of most countries worldwide.

The issue, said Ohio State University’s powell, is not redistribution but growth.

Angela Glover Blackwell from PolicyLink, another speaker at the event, defined the term. Equity is “just and fair inclusion into a society where all can reach their full potential.”

Glover Blackwell pointed out the moral imperative for addressing inequities. But she, too, emphasized the potential for economic growth that results from doing just that. “Equity is the superior growth model,” she said.

Growth & Justice makes the same argument in its recent report and policy brief, We’re All in This Together: Educational Achievement and Attainment by Minnesotans of Color.

As the report notes, “With Minnesota’s population becoming increasingly diverse, we as a state have the chance to address and overcome these educational inequities, tap the talent and potential of all Minnesotans, and secure the Minnesota advantage well into the future.”

We’re certainly not there yet. Nekima Levy-Pounds from the University of St. Thomas’ Law School cataloged many of the disturbing inequities in Minnesota, focusing on differences in situations and outcomes for black and white Minnesotans.

Minnesotans must awaken to the sense of urgency, build the political will to change the situation, and ensure that Minnesotans of color are at the table leading these efforts from the start, she said.

Speaking after Levy-Pounds outlined the disparities, Glover Blackwell gently asked if the audience was embarrassed by the inequities in the state and, for that matter, in the nation.

“These disparities are horrible. They are troubling. And something needs to be done about them,” she concluded.

Indeed. They affect us all.

 – Matt Kane

Happy 10th Anniversary, Tax Cuts! But Where's the Fruit?

Watch for some ironic hoopla this week on the 10th anniversary (June 7) of President Bush's tax cuts, the largest federal income tax rate reductions in modern history, which were preceded in Minnesota by similarly historic cuts in the state's income taxes.

The main "celebrants" are progressive policy groups who are critical of those tax cuts, and considering the economic picture of the last decade, it's obvious why the anti-tax, anti-government zealots are not lighting the candles. Chuck Collins, an heir of the Oscar Mayer fortune and co-founder of Wealth for the Common Good, makes the case in a recent op-ed that the "magical'' conservative "one-point plan'' for everything has been an abysmal failure on every front, except the enrichment of the already rich.

As outlined in a 10-point analysis published by the Economic Policy Institute, the Bush income tax cuts were overhwelmingly "expensive, ineffective and unfair.'' The United States budget went from black ink to red ink in short order, suffered two downturns and twice as many recessions as previous decades, and folks in the top 1 percent got 38 percent of the tax breaks, even as their take of total income and wealth increased dramatically. And you don't have to take the word of progressive policy groups on ranking the decade. A recent report by Investors Business Daily ranks the last decade as the worst for private-sector wage growth since the 1930s.    

Tax cuts can have a positive effect on private-sector growth and no serious liberal economists would argue that tax increases, by themselves, have zero effect on business decisions. But reasonable conservatives also know that the right kinds of taxes and government  investments in human capital, research and physical infrastructure are a foundation for long-term growth. Relatively high income taxes and smart investments in those business-building goods and services has been Minnesota's formula for success, endorsed by moderate Republicans and DFLers for decades.

At the state level, a very insightful take on the subject recently was offered by one of Minnesota's prominent local economists, Paul Anton, who in a Star Tribune op-ed suggested that marginal differences between the states in tax increases and spending cuts have little effect on jobs and economic growth. Recent articles by business columnist Eric Wieffering offer similar hard-headed wisdom on the value of public investments over tax cuts as a business stimulant.

The case for repealing those trillions (at the federal level) and billions (at the state level) of accumulated tax cuts for top incomes seems to grow daily, as federal and state budget shortfalls escalate.

- Dane Smith

 

 

Budget lessons from Arizona

One great thing about having 50 different states trying to balance budgets is that Minnesota can learn from the mistakes of others. Arizona, for instance.

A year ago, 64% of Arizona voters approved Proposition 100, a three-year, one-percent sales tax increase to fund education, which was to receive two-thirds of the proceeds; health care and public safety would split the other third.

The tax produced less revenue than expected, but that wasn't the biggest snag.

Although the money is directed into specific spending areas, there was nothing in the law to prevent lawmakers from cutting other funds that pay for education, health care and public safety.

And that's what they did as they approved a fiscal 2012 budget.

Gov. Jan Brewer promised early in the session she would "protect" total education funding at the State’s FY 2006 funding levels. In effect, that meant a reduction of $72 million in K-12. Higher education spending for FY 2012 would be "protected" with a $170 million cut.

The Arizona Republic reported then that some high-tech businesses were not too pleased. 

Gov. Jan Brewer and the state’s top lawmakers got a reality check Tuesday from former Intel Chief Executive and Board Chairman Craig Barrett, who told them Arizona’s education system is hindering economic-development efforts. “Quality education is extremely important to a place like Intel,” Barrett said. “(The) education cutbacks don’t bode well for that.”

Barrett said if Intel were starting anew, Arizona likely wouldn’t be in the running for its business. “I hate to say it, but I think Arizona would not be in the top 10 locales to make that investment,” he said.

It got worse. The "compromise" Republican Brewer made with her Republican legislative majorities resulted in a $183 million reduction for K-12 and $198 million less for universities plus a $72.8 million cut in aid for community colleges.

In all, $1 billion of the $1.1 billion in reductions made by the Arizona legislature — beyond the governor's own cuts to close the gap — came from education and health care.

So, to recap the lessons from Arizona:

• Voter initiatives to preserve spending can backfire
• It's hard to protect education if legislators don't believe in the system
• Smart corporations look for quality education over low taxes
• Legislative "compromise" on the budget means the same thing it means here.

— Charlie Quimby

 

Antidote for cynicism: Celebrate the Happy Warrior on May 27th, Humphrey Birthday Centennial Reunion & Policy Discussions

For a bracing antidote to the current cynicism about our ability to solve problems with our own democracy, mark your calendars and reserve your spot for May 27 and particpate in an all-day commemoration of the life of Minnesota's own immortal Hubert H. Humphrey (details at bottom of post).

That date will mark the 100th anniversary of the birthday of "The Happy Warrior," as he frequently was called.  An enriching and rather cerebral celebration is being planned at Minneapolis City Hall.  That's where Humphrey began his political career, as mayor, more than 60 years ago.  The agenda is policy-centered and forward-looking with breakouts for discussions on future directions for progressive policy.

Humphrey, who became vice-president in the 1960s and who came within a whisker of the presidency himself, should forever be a point of pride for all Minnesotans.  He was so beloved by friend and foe that he lay in state in the national Capitol Rotunda on his death.  And in hindsight his legacy can be apprecated by citizens of all political hues, not just his liberal admirers.  Humphrey improved our Twin Cities and our nation and our world -- starting with his battles against rank corruption and anti-Semitism in Minneapolis, continuing with his epochal co-leadership of the Civil Rights movement in the U.S. Senate, his steadfast Cold War resolve against brutal communist dictatorships, and his seminal roles in initiatives ranging from Medicare, to the Peace Corps, to workplace safety and the Occupational Safety and Health Act.  (An authoritative and balanced mini-biography, one of the better treatments I've seen, is on the official U.S. Senate website.)  Conservative think-tanker Mitch Pearlstein and I wrote about parallels between Humphrey and Ronald Reagan (whose birthday centennial also occurs this year) in the Star Tribune a couple months ago.

Humphrey until his death from cancer in 1978 absolutely defined the role of the optimistic, practical and constructive political leader.  These are the qualities we want to develop not only in our elected officials, but ourselves.

-Dane Smith

P.S. Opening soon will be a website,  www.humphreycenntennial.org for registration and if you can't wait, reserve by sending an e-mail to humphreycentennial@hotmail.com.  Participants will be asked to provide, names (first & last), e-mail addresses, phone numbers and street address.  Checks should be written to "Humphrey Centennial" and snail mail address is Humphrey Centennial, 1600 University Avenue W., Suite 309B, Saint Paul, MN 55104.  Registering guests will be asked to name their top 3 discussion group issues from a list of:  The Future of American Workers; Citizens in Politics; U.S. in the World; Jobs; Family Farms;  Energy; Health & Aging; Learning & Information; 21st Century Governing; Liberty & Equality; News & Privacy.  Another option is to contact one of two organizers, Diane O'Brien, dianeobrien@me.com (651-261-4173) or Bob Meek, bmeek@tunheim.com, (651-239-7820).  Also, check out Facebook for Hubert H. Humphrey Birthday Centennial Reunion & Policy Discussions, http://www.facebook.com/event.php?eid=314995135445.

 

 

 

Check out "Soul of the Community,'' to see how Minnesotans love their amenities and aesthetics and public stuff

It's sometimes hard to get top business executives to locate to Minnesota -- what with the cold weather and progressive income taxes -- but once they've lived here awhile, it's even harder to get them to leave.  I've heard some version of that story many times in business quarters, most recently at a BioBusiness event in Rochester.

Those of us who have lived elsewhere have theories about this.  And my own conviction is that our attractiveness and our affection for this place is built on a stronger sense of community, inclusiveness and economic fairness than exists in other places.  We simply have had better public stuff, better schools, better parks and trails, better infrastructure overall, more publicly supported arts and cultural amenities, which all adds up to a state and cities that are classier and cooler than other places, not just colder (but I like that bracing climate too).  And in the end, it makes for a better business climate too, owing to a more productive and creative workforce.  More clues as to how this is true can be found in the Knight Foundation's lastest study, The Soul of the Community, which measures 26 U.S. cities from this refreshingtly distinct perspective:  how attached citizens are to their place, and why.  News articles on the study were published in the Star Tribune and the St. Paul Pioneer Press and the two papers offer interesting variations on the essential findings of the study.  Here's the bottom line of the report summary itself, as to why people become attached to their community:

While the economy is obviously the subject of much attention, the study has found that perceptions of the local economy do not have a very strong relationship to resident attachment.  Instead, attachment is most closely related to how accepting a community is of diversity, its wealth of social offerings, and its aesthetics.

And this excerpt from Chris Havens' STrib story adds a little texture to the analysis. 

St. Paul is a city that has welcomed poetry stamped into its sidewalks, a photography exhibit along bustling University Avenue and various music and ethnic festivals.  "It's a cool place to live," (Mayor Chris) Coleman said. "It's a unique place to live."  Sue Buchholz walked her Yorkie, Pandy, in downtown St. Paul's Rice Park on Monday. She moved into a downtown condo within the last year. "I knew this is where I wanted to be," she said. "There's always something to do."  She made a sweeping motion with her arm, pointing to the Central Library, Ordway Center for Performing Arts and Landmark Center.  A few blocks away runs the Mississippi River, which attracts joggers, bicyclists and others interested in the nature along the banks. There are more bike lanes and trails than ever before in the Twin Cities and suburbs.

We've known about this comparative advantage from our better public stuff  for some time.  We hope our new leaders in the governor's office and the Legislature do not lose sight of this bedrock economic asset when they begin to balance the budget shortfall next year.  (And by the way, the Knight report suggests that we are not that high in our regard for our leaders).

Dane Smith

 

 

 

 

Labor Day, economic justice, and progressive capitalists

For a second consecutive year on Labor Day Sunday, I had the privilege of delivering the sermon at my Unity Church in St. Paul (Unitarian Universalist).   I focused on the the great tradition of progressive capitalism in Minnesota,  embodied by people like William Drew Washburn, the founder of the forerunner of General Mills and the founder of the First Universalist Society of Minneapolis, and the subject of a new biography, "Prairie Ligthtning.''    Reviewing Washburn's enormous contributions and his serious shortcomings, I made this point: 

 There are a couple of key points in all this on Labor Day weekend, when we celebrate the vast majority of Americans and Minnesotans who labor for a living, and who mostly don’t OWN OR INVEST for a living, and with whose perspiration our  civilizations have been built.     The first point is a reminder, that some of our direct (Unitarian Universalist) intellectual and spiritual ancestors valued the “me’’ every bit as much or more than the “we.’’   They were intensely self-interested people, empire builders and capitalists, who also tried to balance that side with a conscience and recognition that public stuff, the things we do together for our common good with our  democratic governments, were every bit as valuable as the things we do for ourselves for own profit and enrichment.    Elites like the Washburns and Pillsburys and the Daytons passionately and personally invested in public interest,  and as the decades wore on Minnesota’s capitalists earned a reputation as among the world’s most generous and enlightened, unafraid of social experimentation and democracy, generally supportive of the idea of public-sector growth and  intelligent and humane distribution of an often unfair redistribution imposed by capitalism and the marketplace, on the sound theory that more sharing would be good for private-sector growth in the long run.

 Among the most eloquent and authentic Labor Day op-eds during  the last week was Janice Thurn's excellent commentary ("America Can't Rise Without Its Workers")in the Star Tribune Op-Ed section, and this very clear and compelling  answer to the question "What Does Organized Labor Want?", by AFSCME Council 5 Executive Director Eliot Seide.

It will take a few days to process my latest Unity Church  sermon so that it's available online,  but here is a link to "She Works Hard for the Money (So You'd Better Treat her Right)", the Labor Day sermon I gave last year, focused in particular on the struggle for justice by women workers.

Solidarity Forever!

Dane Smith 

Some tax reforms fit theory & ideology — but reality?

In a forum for gubernatorial candidates early this week, I heard GOP candidate Tom Emmer extol tax reform efforts in Rhode Island as a possible model for encouraging economic development under an Emmer administration. In June, I wrote about the Rhode Island measure, pointing out its tax reforms were positive but any economic impact claims were unproven.

To hear such praise for the Rhode Island reforms, you'd think the nation's tiniest state was already on the way to recovery and worthy of emulation by our lawmakers.

In fact, Gov. Carcieri only signed the Rhode Island bill in June. About the only "measure" of its success so far is a declaration by the right-leaning Tax Foundation that Rhode Island now ranks 41st on its index of business tax climate, compared to 44th before the reforms passed. Minnesota ranks 43rd. (As of July, the Bureau of Labor Statistics reports Rhode Island's seasonally adjusted unemployment rate at 11.9%; Minnesota is at 6.8%.)

The Tax Foundation also said:

[Rhode Island] puts heavy reliance on the usual corporate giveaways through the tax code (job credits, research-and-development credits, investment credits, film credits, etc.). These programs are generally more about photo-ops and handouts to the politically connected than broad-based economic development.

In other words, a state that has resorted to cosmetic job creation measures in the past has marginally improved its low ranking on a scale that largely exists to browbeat states into favoring businesses in their tax codes.    It's highly questionable whether we should emulate a state that has absolutely no track record of improved job results.

Lowering taxes as an economic development strategy may not fit reality, but it fits hardcore conservative ideology.

Also this week, Craig Westover published an op/ed that headed off in a similar direction. In criticizing proposals to raise the marginal income tax rate on the state's top earners, Westover says, and we don't disagree:

High wage earners tend to be individuals with unique skills and knowledge highly sought after in the marketplace. A nationally known college professor, a talented engineer, a successful school superintendent, a CEO with a proven track record, an entrepreneur with a great idea looking for a place to start a business — such people are highly mobile and can live and work just about anywhere they choose.

In fact, most economists would agree with his statement of economic theory. The problem, though, is they have a hard time finding a way to prove it in the real world.

As Westover says, "All other things being equal, they choose to work where net income (after taxes), not gross income, is competitive."

All other things are not equal. If they were, no state would have a reason to tinker with its tax code. And the North Dakota Dodgers might be playing the Pawtucket Red Sox in the World Series.

Growth & Justice has been studying the literature on tax studies that might shed a light on how much state taxes make a difference in fiscal policy and economic growth.

Watch for it this fall.

— Charlie Quimby