Should Cities Print Their Own Currency?

Here's one possible idea to try and stimulate the economy for locally owned stores...in Southern Berkshire Mass. they are starting to distribute a local currency called the Berkshare. For $90 you get 100 Berkshares, that can only be spent at locally owned stores. Read the full story here: New England Towns Prints Up Its Own Currency

Dow Takes a Huge Hit

By now I'm sure you are all aware of the Dow dropping over 400 points today, the largest drop since September of 2001. But the question is what does this mean? Are we headed to a recession? Is the economy as strong as we think? Well the way I understand it there were three factors that really contributed to this huge loss:

• Bomb going off near Vice-President Cheney in Afghanistan (psychological effect)
• Econ number for durable goods released this week lower than expected, down over 7% (appliances, computers, and large goods like airplanes)
• 9% drop in the Shanghai Stock Exchange (huge drop...largest in a decade), some analysts are suggesting that maybe this drop is just equalizing the 130% growth the Shanghai market has experienced the past year...others suggesting it is a response to fears of the government is trying to slow down the economy.
  

Most seem unsure if this massive sell off will continue tomorrow or not (I watched Cramer describe this as a great buy opportunity). I'm not sure if this indicates a looming recession, but two points are interesting here: 1)This shows how closely we are now tied to the Chinese market (at least an appearance of what it might mean for the global economy), and 2)It is ironic this occurs a day after Alan Greenspan talks about a possible recession by the end of 2007. Click here to read this article.

How Much Do You Know About Government?

We began the Legislative session showing this video at Local Officials' Day...so I thought maybe it is appropriate to the show the video again with the session ending this Wednesday. You can read the Deseret News article regarding this video here.



Whats the point? The point is we can all become more educated on civics and government. It is easy to be disengaged when we don't understand the process or the players...think about watching a sporting event without knowledge of any of the rules. We think local government can play a part in addressing this civics ignorance. Which is why we recently published a curriculum guide for 4th and 7th grade teachers. Read more about it here. Or if you are in South Jordan City you may want to consider South Jordan University.

City Fiscal Conditions 2007

We know the State of Utah has a surplus of well over $1 billion, but what is the fiscal health of Utah's cities and towns? Each city and town is unique, which makes is difficult to assess budget health in the aggregate the way we evaluate state revenue and expenditures. In an attempt to better understand the fiscal state of municipal goverment we (ULCT) recently conducted a survey of municipal budget officers across the state of Utah.

The survey instrument used is patterned after a survey administered by the National League of Cities and adapted to address Utah's cities and towns. The survey asked respondents to assess if their city was better able or less able to address their budget needs this fiscal year versus the last. The survey also asked budget officers to measure the degree of impact a number of factors had on the budget process. Overall Utah's cities and towns are experiencing fiscal stability, led by the strong state economy, but that doesn't mean there aren't looming challenges (i.e. infrastructure needs and rising health care benefit costs). Click here to read Municipal Fiscal Conditions 2007.

I appreciate the input from staff at the University of Utah CPPA and a small group of city budget officers regarding the design of this instrument. Also, thank you to the 82 cities who responded.

Tax Incentives for Development?

Thanks to the Utah Bloghive I've recently read a couple of interesting blog posts, especially y-intercept's post on how sales tax creates self-destructive behavior by cities. The post and following comments are interesting, I agree in part, but also disagree. First, I don't think cities are providing the incentives (or "subsidies") for retail development like y-intercept or others might think. For one reason the use of sales tax incentives for retail development has been prohibited for cities and counties since 2004 (SB 124). And recent RDA legislation has decreased the use of RDA money for retail development projects.

Of course, some large retail still receive municipal incentives. But these projects amount to a simple cost benefit analysis. It is the same reason why the State of Utah recently offered nearly $2 million to try and lure a toilet paper manufacturing company to Washington County or a $1.3 million rebate to Backcountry.com, read the article here. Not all retail occurs on its own (as suggested by y-intercept and the Utah Taxpayers Assoc.). Projects like Cabela's or IKEA, are often choosing a location between a number of regional jurisdictions, and don't just develop in Lehi or Draper on their own. Governments, state and local, are always going to compete regionally in attempts to stimulate the economy. I don't think I would call this process creating a false economy.

There are two key questions here: 1) How do we get state and local government economic development on the same page? There isn't an easy answer...maybe the state and cities should begin sharing income tax revenue (just an idea). 2) How do we maintain our locally owned unique stores while also allowing larger regional development projects? There is a lot we can do here, which is why we (ULCT) recently co-sponsored a training session/forum with Local First Utah to address this very question. Read the article here.

Anyhow, I'm not a planner...but I do understand the finance side of municipal government and the financial pressures cities face to provide the services we all enjoy. Sales tax revenue, for good or bad, is a very large piece of the municipal revenue pie.

Wild Valentine's Day Love

Some cities (Tampa, San Francisco, New York, and even Boise) are providing a little extra incentive to visit the zoo around Valentine's Day...at least for adults. Wild animal sex tours seem to be catching on at zoos across the nation--that's right, people paying to watch animals mate and in some cases enjoying a candlelight dinner during the 'event'. I'm not sure I would ever attend, but I'm all for innovative revenue generation. Check out the story here or here.

Bush Delivers Federal Budget

With everyone buried in the middle of the UT Legislative Session maybe you missed that Monday President Bush delivered his FY2008 budget to Congress. Just by mentioning the federal budget most eyes droop or glaze over...it is hard to see the relevance to local politics or to relate to numbers like trillions. However, there are some real factors for us to be aware of. Here are a couple of points to note:

• Current budget deficits will likely diminish then disappear over the next decade (According the Congressional Budget Office).
• While the deficit will decrease mandatory spending (Social Security, Medicaid, Medicare) continues to rapidly grow.
• Currently Social Security, Medicaid, and Medicare amount to 8.7% of GDP or $1.1 trillion
• CBO estimates that in 20 years these programs will nearly double, resulting in 14% of GDP.
  

The question becomes...what happens to the discretionary piece of the federal budget while mandatory spending grows? Discretionary spending includes all programs that impact state, county, and municipal governments. It is important to keep on eye on this to accurately assess the future of federal, state, and local fiscal partnerships.

The Tax Policy Center is a great resource to better understand federal budget issues and the budget process. Check here.

Another bad bill

We (ULCT) have taken a formal position opposing HB233, Rep. Morley's bill that would restrict the ability of cities to zone in environmentally sensitive areas. If you've been reading Lincoln's blog you are familar with the background of this legislation. I was surprised, but pleased, this morning to see in the SL Tribune a letter to the editor also opposing HB233. Thanks Steve Glaser, I couldn't agree more. Check here.

The Daily Herald today also took a position to oppose HB282 (removal of sales tax on food). Read the editorial here. According to The Daily Herald Newbold's bill is "fraught with negative consequences." Of course I agree.

Meet Mayor Simmons...

Brian Hall in our office recently initiated a new feature to our website called Ten Big Questions. This will highlight different municipal elected officials from across the state. First up...Mayor Randy Simmons (Mayor of Providence City). Check here to read what is easier for Mayor Simmons, correcting a stack of essay exams or sitting through a city council meeting.

Why I oppose HB 282...

There has been much discussion in the media and at the Capitol regarding sales tax on food. HB 282, sponsored by Rep. Merlynn Newbold, will create a single sales tax rate of 4% on food purchases. In essence, this bill removes the sales tax on food for resort communities, transit districts, and in cities with RAP and ZAP taxes. The bill would cost these entities approximately a combined $20 million. Here are three simple reasons why I oppose this bill:

1. Bad Tax Policy – Legislators supporting this bill often express the benefit repealing the sales tax on food will have for Utah's low income families. I agree with this concern, but think there are other ways to address the need of low income households (and let's be honest, this is the same Legislature that last year cut $2 million in dental care from its Medicaid plan…plus, I don’t think anyone really believes that reducing the sales tax at grocery stores in Park City is really aiding Utah’s most needy families). Anyhow, in my opinion it is bad sales tax policy to narrow the base. I would rather lower the tax rate and expand the base. For example

• Average State sales tax rate with food taxed – 4.8%
• Average State sales tax rate with food exempt – 5.5 %
  
  The more we narrow the base the higher our rate will be pushed as soon as the State needs money to balance their budget in future years.

2. What about the voters? – Just in November voters in Salt Lake County approved (over 60% in favor) a sales tax increase to be dedicated to transit. Now the Legislature is going to cut the base and with it the revenue this tax increase can generate? I understand that some Legislators don’t respect UTA, but what about the public? It seems to me the Legislature does not respect the opinion of the 140,000 SL County residents voting for Prop 3.

3. One Size Does Not Fit All – There is a reason that we allow for resort community taxes, resort hospital taxes, transit districts, RAP and ZAP taxes. We recognize that our state is diverse and local jurisdictions need flexibility to address the needs of their area. Reducing the tax on food for these distinct taxes reduces flexibility and local control.

I should add I'm not alone in this opposition. The ULCT League Policy Committee voted unanimously on Monday to oppose this bill.

Top 10 Legislative Issues Nationwide

What is the hottest issue for the Utah State Legislature this session? I’m still trying to figure that out…I guess my vote would go to either tax cuts or education reform. While I’m still a little unclear on the top issues for the Utah Legislature, NCSL seems confident with their 2007 forecast of the top issues nationwide. Or as they put it they measure different policy issues in relation to water’s boiling point…212 degrees. Any guesses on which policy issue hit the 300 degree mark?

I’ll give you a hint…in 2006 there were 570 various immigration related bills introduced nationwide. Looks like that trend will continue. Check here for the full ranking: NCSL's Top 10 Policy Issue Forecast: Heat is on State Legislatures.

Mayoral Revenge

Entire village suspected of mayor's murder...and we think the process to change our municipal form of government can be brutal.

Need for Conversation and Correspondence

Mark Alvarez, columnists for the Salt Lake Tribune, wrote Sunday, "The greater good calls for more community conversation and correspondence about public policy that serves the common interest." I couldn't agree more. With the 07 Legislative Session in full swing it is time to start increasing our communication with each other and to our elected representatives.

Yesterday's League Policy Committee (LPC) meeting is evidence that we are already in the thick of the session. The LPC agenda was packed full of important issues, and our committee room was even more packed (I'm guessing over 80 city elected officials and staff from across the state). The LPC meeting is also evidence that a number of city officials are committed to participating in this conversation regarding public policy. There are a number of key issues we (ULCT) are tracking closely, for example:

• Food tax, municipal election reform, municipal forms of government, land use issues, and telecommunications, to name a few.
  

Most of these issues are still in a very fluid state, so it can be difficult to stay up to speed. However, let's make sure the conversation and correspondence does not break down. Please check Lincoln's blog frequently, or visit the ULCT page, or you can always call (801-328-1601). The next month should be interesting and we look forward to hearing your input.

You can read Alvarez's column here.

Bootleggers and Baptists

We all know politics makes strange bed-fellows...but do we know why? Bruce Yandle of Clemson University explains why politics often leads to these peculiar alliances of self-interested special interests with more altruistic motives. Or in his example bootleggers and baptists in the south teaming up to prohibit the sale of alcohol on Sunday. You might find this hour long podcast enlightening as the Legislative Session starts to heat up and Legislators start orchestrating deals. Or maybe you might just want to spend the weekend relaxing to some engaging EconTalk (seriously, it really is a good podcast). If interested check here.

Local Officials Day Reviewed

The ULCT Local Officials’ Day was well attended today with Governor Huntsman, ninety percent of the State Legislature, hundreds of high school youth city council participants, along with mayors, council members, and city staff from across the state, even Abe Lincoln was in attendance. I hope everyone found the speakers and presenters informative.

Those in attendance enjoyed a lighthearted video regarding basic civics and government questions. Some of their answers are humorous, but more importantly I think the entire video is a reflection of all of us or society in general. Regardless of what we think we know, we still have much to do to become a knowledgeable and engaged citizenry. Hopefully that is the point that sticks—we can all become more informed regarding government.

I enjoyed my workshop with the Youth City Council members. Please click here if you are interested in my presentation or contact me if you have questions.

Local Officials' Day 2007

Just a quick reminder regarding Local Officials' Day tomorrow at the Salt Lake City Sheraton. This cartoon here will make more sense tomorrow after our video is shown during lunch--a ULCT attempt at 'Jaywalking', but with our own local TV talent Allie Mac Kay.

I'm especially looking forward to meeting with the Youth City Council members from across the state. We should have a lively discussion about civics and what it takes to be an engaged citizen.

Do Mayors and Head Coaches Have Anything In Common?

Okay, so I’m sure I’m not the only person who felt a little bad for Marty Schottenheimer when he had another playoff game slip away, losing to the Patriots 21-24. I felt bad because I knew I would wake up this morning and hear everyone calling for Marty’s job…sure enough Chargers fan David James (along with most of the nation) is calling for Marty’s firing. Here.

But in thinking about Marty I heard Colin Cowherd on the radio comment…“NFL head coaches are like our mayors. They are visible and the easiest to rip.” So do Andy Reid, Schottenheimer, Billick, and Holmgren have anything in common with Mayors Dolan, Curtis, Seghini, or Billings? Maybe they do, think about it…when something goes bad in a city who is the first to be blamed? The Mayor.

However, the Mayor is just a piece in the puzzle, just like the Head Coach. Sometimes we need to take a step back and look at the entire picture (or puzzle) before assigning blame…but oh it is so much easier to place blame on the most visible figure.

Maybe we need to take a minute to thank these visible figures while everything goes well—instead of waiting for events to go bad and blame them. Layton residents could start with Mayor Curtis ...pictured here, taking the time to try on the fire uniform with the Layton Fire Department.

O Water, Where Art Thou?

Ever wonder exactly where your shower water comes from? Probably not...unless, of course, you turn on the shower and no water comes out. The City of Bryan, Texas put together a very clever calendar highlighting various aspects of their public works department--while also providing citizens great information regarding water uses. Check out the various calendar months in pdf form here.


My personal favorite...May 2007, Reservoir Clogs.

2007 Economic Report to the Governor

The Council of Economic Advisors to Governor Huntsman recently released the 2007 Economic Report to the Governor. We all know the economy in Utah has been good in 2006...but just how good? This report provides important data and details regarding demographic changes, tourism, jobs and wages, and overall growth in Utah. If you don't have time to read the full 226 page report I at least recommend a review of the 4 page Executive Summary. Here are a few highlights.

• 5.2% -- job growth in 2006 (compared to 1.4% nationally)
  
• 2.7% -- population growth (67,714 new residents = a city the size of St. George)
  
• 18.1% -- construction job growth led all other sectors in 2006
  
• 5.4% -- non agricultural wages increase exceeded inflation for the 3rd consecutive year
  
• 5.4 million residents are expected to live in Utah by 2050...doubling our population in the next 44 years.
  

Smart Decline vs. Smart Growth

While America continues to grow at a fast rate, some older more urban cities have declined in population. For example, Richmond VA, has lost over 50,000 residents in the last 35 years. And according to the US Census 11 of the 100 largest US cities fifty years ago now have less than 100,000 residents. There are a couple of factors that have led to this decline, primarily the use of automobile transportation and the incredible growth of suburbs.

Few Utah cities are addressing issues of population decline (however, there are some), but I found this article in USA Today interesting: As Older Cities Shrink, Some Reinvent Themselves. Ther article quotes Terry Schwarz, senior planner at Kent State University's Urban Design Center of Northeast Ohio, "Everybody's talking about smart growth, but nobody is talking about smart decline, there's nothing that says that a city that has fewer people in it has to be a bad place."