The stimulus first-time homebuyer credit is set to expire on November 30th of this year. For those of you who are not familiar with this credit, it is an $8000 refundable tax credit for anyone with an AGI less than $150,000.
This credit has cost approximately $15 Billion and over the course of the past year home prices have started to stabilize nationally and sales have begun to outpace listings.
However, nationally, home prices are down about 11% over the last year, and a recent study by Brookings Institute found that 85% of the home sales would have occurred regardless of the credit. This means that the government spent roughly $43,000 a piece for the additional 350,000 home sales. This is a hefty subsidy for these additional sales, and represents a windfall for the other 2M home buyers this past year who claimed the credit.
Senator Johnny Isakson (R-GA), who incidentally made his fortune in selling real estate and has remained a friend of the National Association of Realtors, along with Chris Dodd (D-CT) have proposed extending the credit into 2010, doubling it to $15,000 and raise the income limits to $300,000. The cost of this credit is expected to be approximately $30B.
Raising the income limit only adds an additional 5M households into the mix, therefore, it is unlikely to drive a large number of increased housing sales (beyond those whom would already buy a house anyways in 2010) simply because of the small pool of additional people. Furthermore, as indicated above, housing prices have year-to-year fallen on average of 11%. This is roughly $14,000 of free, market based, subsidy that has already been built in and is arguably driving as much sales growth as the smaller credit over the past year. Finally, despite housing prices falling $14,000 over the last year, this includes the $8000 subsidy built in in the form of an inflated price. As soon the subsidy ends (and it will have to at some point), all housing prices will in effect drop by the subsidy amount. Therefore, by extending the credit for a year, this drop in actual home prices will come just as prices may be turning around.
If those receiving the credit are facing artificially inflated housing prices, who is seeing the benefit of this subsidy. Well, and additional $8000 in sale price results in roughly $500 in additional real estate agent commission. Thats certainly why NAR is behind extending the credit, who cares if the country goes an additional $30B in the hole, I made an extra $500 on a sale. The rest of the subsidy is going to current home owners, through an inflated sale price. But this whole problem is that there are too many houses on the market in the first place. This subsidy is therefore encouraging more homes on the market rather than removing the backlog of homes currently for sale.
If the government is committed to spending 30B in 2010 to increase home sales and home prices, why not invest that in immigration? Part of the problem is that many regions are overbuilt and home ownership (home borrowership) had been inflated to higher than sustainable levels. We don't need a government handout to turn renters into buyers, we need MORE buyers in the first place and the only way to quickly achieve this is through immigration.
Immigrants, and particularly the highly skilled H1B visa immigrants are one of the most entrepreneurial demographic groups. They come to the US to fill highly skilled and technical jobs that simply can't be filled by people already here, work for a few years, establishing families and friends along the way, before often leaving those original companies to form spin-offs or new technological ventures.
This year (2009) the US spend 151M on citizenship and immigration. http://www.whitehouse.gov/omb/rewrite/budget/fy2009/homeland.html
A fraction of 30B could be spent to streamline citizenship and visa programs, as well as expand them to enable to make US immigration attractive not only for the opportunities offered here, but for the ease and speed of our immigration and visa process.
Thursday, November 5, 2009
Saturday, September 19, 2009
Development Quick Hits
The City of Milwaukee has apparently adopted the strategy of publicly assisting proposed construction/buildout projects so that they will be done or hitting the market in 2011 and beyond, assuming that the recession will be past and demand will have increased by then.
Examples of recently approved projects include:
Tower Automotive Site Industrial Park
http://www.biztimes.com/daily/2009/9/1/council-approves-purchase-of-tower-automotive-site
Reed Street Yards Water Technology Business Park
http://www.jsonline.com/business/54639117.html
The Moderne - Condos/Apartments
http://www.themoderne.net/
Crisp (Restaurant/Retail)
http://www.jsonline.com/blogs/business/59231767.html
Lena's Supermarket on Capitol (on site of former Lena's Supermarket)
The Development Map has been updated to include these developments.
In other development news, St. Johns on the Lake is moving towards breaking ground on its proposed 21 story addition to Milwaukee's "Gold Coast" - albeit this development will be considerably greyer than others.
With 75% of the leases signed and still unable to find the necessary lenders, St. Johns is turning to a bond sale to complete the financing of the project, which is projected to be completed by the end of 2011.
http://www.biztimes.com/realestateweekly/2009/9/16/st-johns-selling-bonds-for-tower-hopes-for-october-groundbreaking
The breaking ground of St. Johns is one more reason that an East Side streetcar loop should extend up to North Avenue.
Examples of recently approved projects include:
Tower Automotive Site Industrial Park
http://www.biztimes.com/daily/2009/9/1/council-approves-purchase-of-tower-automotive-site
Reed Street Yards Water Technology Business Park
http://www.jsonline.com/business/54639117.html
The Moderne - Condos/Apartments
http://www.themoderne.net/
Crisp (Restaurant/Retail)
http://www.jsonline.com/blogs/business/59231767.html
Lena's Supermarket on Capitol (on site of former Lena's Supermarket)
The Development Map has been updated to include these developments.
In other development news, St. Johns on the Lake is moving towards breaking ground on its proposed 21 story addition to Milwaukee's "Gold Coast" - albeit this development will be considerably greyer than others.
With 75% of the leases signed and still unable to find the necessary lenders, St. Johns is turning to a bond sale to complete the financing of the project, which is projected to be completed by the end of 2011.
http://www.biztimes.com/realestateweekly/2009/9/16/st-johns-selling-bonds-for-tower-hopes-for-october-groundbreaking
The breaking ground of St. Johns is one more reason that an East Side streetcar loop should extend up to North Avenue.
Friday, September 18, 2009
Streetcar Route
It appears that the City is moving away from the proposed "Downtown Circulator" route and instead focusing on a more commuter oriented route, attempting to service the densest parts of the city and Downtown.
http://www.jsonline.com/news/milwaukee/59689692.html
I think that this is the correct move and I like to see that they look similar to the proposed streetcar route alternatives that I created a while ago.
http://maps.google.com/maps/ms?client=firefox-a&hl=en&ie=UTF8&msa=0&msid=107292549626428610164.00046349b761eb5a87519&ll=43.044178,-87.887535&spn=0.068624,0.179043&t=h&z=13
My only concern with these is that they don't extend up Prospect/Farwell to North Ave. I really think that that extension of the route is what makes it economically feasible because it actually connects quality, high density housing with downtown (and presumably the jobs that support that housing). These are the people that are most likely to be converted to riders on the route and should be targeted with this starter system. Even in the state of the economy, this area has continued to see development - Latitude (Under Construction), Park Lafyette (still under construction), St. Johns (soon under construction), Transera and an unnamed apartment building (both proposed by New Land).
Looking at the distance, with reference to my streetcar route map, unidirectional track up Prospect and down Farwell is a similar distance of track as the original downtown circulator in bidirectional track. Therefore, I feel that it should be economically feasible to extend the route to North Avenue.
http://www.jsonline.com/news/milwaukee/59689692.html
I think that this is the correct move and I like to see that they look similar to the proposed streetcar route alternatives that I created a while ago.
http://maps.google.com/maps/ms?client=firefox-a&hl=en&ie=UTF8&msa=0&msid=107292549626428610164.00046349b761eb5a87519&ll=43.044178,-87.887535&spn=0.068624,0.179043&t=h&z=13
My only concern with these is that they don't extend up Prospect/Farwell to North Ave. I really think that that extension of the route is what makes it economically feasible because it actually connects quality, high density housing with downtown (and presumably the jobs that support that housing). These are the people that are most likely to be converted to riders on the route and should be targeted with this starter system. Even in the state of the economy, this area has continued to see development - Latitude (Under Construction), Park Lafyette (still under construction), St. Johns (soon under construction), Transera and an unnamed apartment building (both proposed by New Land).
Looking at the distance, with reference to my streetcar route map, unidirectional track up Prospect and down Farwell is a similar distance of track as the original downtown circulator in bidirectional track. Therefore, I feel that it should be economically feasible to extend the route to North Avenue.
Friday, August 28, 2009
Name Explanation
Some people might wonder the meaning behind the blog name Rectanus Milwaukee. Although it sounds like the aftermath of having Real Chili at bar time, it has more of a meaning.
I originally registered this site either when I was still in law school, or soon after I moved to Milwaukee, and as you will notice the subheading is a blog about Intellectual Property and the City of Milwaukee, which was my original intended format, and I might still write some articles about IP should I get the itch.
Getting back to the name, "Rectanus" is the name of one of my favorite trademark law cases - United Drug Co. v. Theodore Rectanus. It is a supreme court case from 1918. Rectanus combined with Hannover Star Milling v. Metcalf, (the "Tea Rose" case) forms the grounding for the "Tea Rose-Rectanus Doctrine" which lays out the interplay between common law trademark rights and federal trademark registration rights.
In short, the Tea Rose-Rectanus Doctrine says that common law trademarks grow through actual use and therefore are territorially limited only to the locations that the common law trademark has been actually used. However, federal registration gives the registrant constructive use everywhere in the country.
In Rectanus, Theodore Rectanus operated a drug store in Kentucky called "Rex Drug". Unknowingly, United Drug Company started a chain of drug stores under the name of "Rex Drug" in New England, sometime after Theodore Rectanus' Kentucky drug store was founded. Over time, United Drug registered the trademark REX and expanded their chains down the East Coast and eventually into Kentucky. Meanwhile Rectanus didn't expand to any new locations, but had acquired a well known reputation through a greater part of Kentucky. The Supreme Court found that United Drug could not enjoin Rectanus' use of Rex Drug as he had established trademark rights in that territory before the federal registration gave the trademark rights to United Drug in all other locations across the country.
So now you know the meaning behind Rectanus Milwaukee, but Real Chili is certainly to blame as well...
I originally registered this site either when I was still in law school, or soon after I moved to Milwaukee, and as you will notice the subheading is a blog about Intellectual Property and the City of Milwaukee, which was my original intended format, and I might still write some articles about IP should I get the itch.
Getting back to the name, "Rectanus" is the name of one of my favorite trademark law cases - United Drug Co. v. Theodore Rectanus. It is a supreme court case from 1918. Rectanus combined with Hannover Star Milling v. Metcalf, (the "Tea Rose" case) forms the grounding for the "Tea Rose-Rectanus Doctrine" which lays out the interplay between common law trademark rights and federal trademark registration rights.
In short, the Tea Rose-Rectanus Doctrine says that common law trademarks grow through actual use and therefore are territorially limited only to the locations that the common law trademark has been actually used. However, federal registration gives the registrant constructive use everywhere in the country.
In Rectanus, Theodore Rectanus operated a drug store in Kentucky called "Rex Drug". Unknowingly, United Drug Company started a chain of drug stores under the name of "Rex Drug" in New England, sometime after Theodore Rectanus' Kentucky drug store was founded. Over time, United Drug registered the trademark REX and expanded their chains down the East Coast and eventually into Kentucky. Meanwhile Rectanus didn't expand to any new locations, but had acquired a well known reputation through a greater part of Kentucky. The Supreme Court found that United Drug could not enjoin Rectanus' use of Rex Drug as he had established trademark rights in that territory before the federal registration gave the trademark rights to United Drug in all other locations across the country.
So now you know the meaning behind Rectanus Milwaukee, but Real Chili is certainly to blame as well...
Sunday, August 23, 2009
New Name, New Format
After much thought and input, I decided to make the move over to Blogger. This way, people will no longer have to register to view posts and can subscribe to an rss feed.
Also, its been real busy at work, so I haven't had the opportunity to put up any new content in quite a while, I'll try to change that and I would think that once it starts getting colder out it will be easier to spend some quality time in front of the computer to put together some posts. I am going to move content over from the other site, but will probably edit entire threads into a single post. For those people who contributed to the development of those threads I thank you for the input and will try to accurately convey your points in the new combined posts.
Besides the RSS feeds, Blogger offers a lot more convienent tools for putting stuff on the web. For instance, the Milwaukee Development Map has its own link on the sidebar rather than being embedded in the Milwaukee Development thread.
A few quick thoughts:
Frankly the debate over healthcare reform is a mess, there is so much noise out there that frankly, I couldn't even tell you 1% of what is being proposed and what it is aimed to do. For that reason alone, I can't say that I support it, but the strategy of introducing it now is that it doesn't matter what I know or support, there are only 540 people, whose re-election bids depend on what is in it. By 2010 or 2012 I'll know what is in it and get to make my decision then.
The Stimulus Package was nearly a Trillion dollars of wasteful spending. The problem was that back in January, the public needed to be shown that the government was "doing something" for "main street" and it needed to do something big, with a big number. The problem is that now we have to actually spend that money on a bunch of questionably needed projects and subsidies. What should have been done was to cram as many spending items that would have already been proposed and passed into the package, so that the number was higher, but the actual impact was smaller. This was done to some extent with the inclusion of the annual AMT patch and unemployment insurance extensions into the bill. My latest project complaint - rural broadband. There are places where there is unlimited broadband access, hell, even nearly continuous wireless access. They are called cities. By having the public support extending every convenience of being in a city to every farm, dale, and desert of the US, it only further encourages our governments on their unsustainable paths of spending to continue to support these conveniences in the future.
Also, its been real busy at work, so I haven't had the opportunity to put up any new content in quite a while, I'll try to change that and I would think that once it starts getting colder out it will be easier to spend some quality time in front of the computer to put together some posts. I am going to move content over from the other site, but will probably edit entire threads into a single post. For those people who contributed to the development of those threads I thank you for the input and will try to accurately convey your points in the new combined posts.
Besides the RSS feeds, Blogger offers a lot more convienent tools for putting stuff on the web. For instance, the Milwaukee Development Map has its own link on the sidebar rather than being embedded in the Milwaukee Development thread.
A few quick thoughts:
Frankly the debate over healthcare reform is a mess, there is so much noise out there that frankly, I couldn't even tell you 1% of what is being proposed and what it is aimed to do. For that reason alone, I can't say that I support it, but the strategy of introducing it now is that it doesn't matter what I know or support, there are only 540 people, whose re-election bids depend on what is in it. By 2010 or 2012 I'll know what is in it and get to make my decision then.
The Stimulus Package was nearly a Trillion dollars of wasteful spending. The problem was that back in January, the public needed to be shown that the government was "doing something" for "main street" and it needed to do something big, with a big number. The problem is that now we have to actually spend that money on a bunch of questionably needed projects and subsidies. What should have been done was to cram as many spending items that would have already been proposed and passed into the package, so that the number was higher, but the actual impact was smaller. This was done to some extent with the inclusion of the annual AMT patch and unemployment insurance extensions into the bill. My latest project complaint - rural broadband. There are places where there is unlimited broadband access, hell, even nearly continuous wireless access. They are called cities. By having the public support extending every convenience of being in a city to every farm, dale, and desert of the US, it only further encourages our governments on their unsustainable paths of spending to continue to support these conveniences in the future.
Tuesday, June 2, 2009
Rethinking Metro Milwaukee
The economic development group Milwaukee 7 was formed to create a regional entity to promote economic development in Southeastern Wisconsin.
http://www.choosemilwaukee.com/
Similarly SEWRPC (South Eastern Wisconsin Regional Planning Commission) was created in 1960 to address regional transportation and infrastructural issues in the largest urbanized region of the state.
http://www.sewrpc.org
Both the Milwaukee 7 and SEWRPC include the counties of Milwaukee, Ozaukee, Washington, Waukesha, Walworth, Racine, and Kenosha.
Together, these seven counties account for 35.6% of Wisconsin’s population (2,003,218), but account for 52.5% of the income earned. (WI per capita - $25742, SEW - $38056)
In many ways, SE Wisconsin operates as a single economic entity, with a fair amount of integration and connection between these counties. However, the Census Bureau defines metro areas based upon commuting statistics as solicited during the decennial census. Therefore, as defined by the US, Milwaukee’s Metro, or Metropolitan Statistical Area (MSA) is only Milwaukee, Ozaukee, Washington, and Waukesha counties. The more expansive analysis of a Combined Statistical Area (CSA) adds Racine into the area. On the other hand, Kenosha is part of Chicago’s MSA.
While classifications are simply that, the shortchanging of the Metro area harms the region in statistical measures and regional perception. It fails to include counties experiencing higher growth, but are connected to the region (Racine, Walworth, Kenosha) as well as Western counties becoming more connected to the metro through Waukesha county’s growth (Jefferson and Dodge). As an example of this impact, the City of Milwaukee has an estimated population of 602,191- 23rd in the country; however, with a MSA population of 1,549,308 it falls to 39th largest Metro, looking at CSA, Milwaukee metro moves back up to 32nd.
Therefore, in terms of regional marketing, Milwaukee City is in population league with peers Denver (26), Seattle (24), Boston (21), and Baltimore (20), while in metro areas is compared to Jacksonville (40) and Providence, RI (37).
There are a few problems with the Census’ definition of the Milwaukee metro area. First, it fails to acknowledge the longstanding interconnection between all of the counties of SE Wisconsin. Secondly, it fails to acknowledge the growth of Waukesha County as an economically significant location in the state. This growth was possible through Waukesha’s interrelation with the rest of the metro region.
As mentioned before, the Census Bureau defines MSAs and CSAs through its Core Based Statistical Areas (CBSA) Analysis. Bear with me for a minute while I explain in a nutshell, this analysis.
For ease of understanding CBSAs are basically counties.
A CBSA is included in an MSA if either 25% of its workforce commuting to work in an MSA, or has 25% of its employment with workers commuting from an MSA.
A CSA adds to the MSA any additional CBSA with an Employment Integration Measure (EIM) of 25 or more. The EIM is the sum of the % of the CBSA workforce commuting into the MSA from the CBSA and the % of the employment filled b workers commuting from the MSA into the CBSA.
Finally, A CBSA may be included in a CSA if the EIM is greater than 15 and there is public support for the combination, as reflected by the federal representatives representing the CSA and the CBSA in question.
As The CBSAs are generally only redefined every 10 years, based upon commuting data, most of the commuting data that I was able to find was from the 2000 census.
http://www.dwd.wisconsin.gov/oea/pdf/commuting2000.pdf
However, referring to this document I was able to calculate the EIM scores for myself for this outer ring of counties that were not included in Milwaukee’s CSA, as well as to see how close Racine county was to falling within the Milwaukee MSA.
In 2000, 19.8% of the Racine County workforce worked in the Milwaukee MSA and 8% of the employment in Racine County was from people commuting from the Milwaukee MSA. Therefore, while Racine was still about 5% short from qualifying for the MSA, Racine scored an EIM of 27.8 and automatically qualified for the Milwaukee CSA.
The commuting statistics for the other counties are as follows:
Commute from County / Commute into County / EIM
Walworth 11.4% / 5.4% / 16.8
Jefferson 17% / 5.7% / 22.7
Dodge 18.2% / 4.6% / 22.8
Therefore, all three of Walworth, Jefferson, and Dodge Counties qualified in 2000 to be included in the Milwaukee CSA based on local opinion. The strength of the connection of these counties is not only to Milwaukee (with over 1000 people commuting to Milwaukee County from each of these counties), but the strength of the Waukesha County economy which drew over 3,000 commuters from each from Dodge and Walworth Counties and 5400 commuters from Jefferson County.
Jefferson and Dodge Counties nearly met the EIM threshold of 25 for automatic inclusion in the Milwaukee CSA, but none of these counties were included under the public opinion provision. My question is whether there is no public support, or no public knowledge of these designations?
But 2000 is long and gone, and the country is gearing up for census 2010, how will new data affect these determinations?
The Wisconsin Department of Workforce Development tracks the employment numbers around the state. http://www.dwd.wisconsin.gov/oea/county_profiles/current.htm Looking a job growth between 2002 and 2007 (as reported in the downloadable spreadsheet) was strongest in the region in Waukesha County, which added 15,000 jobs (+6.6%). Meanwhile, Milwaukee County lost 10,000 (-2%), but by 2007 was up off of a loss of 16,500 jobs from 2002-2005. Washington County added 5,000 (+9.9%) jobs and Walworth County added 2,000 (+4.3%) jobs, while Racine and Ozaukee Counties were flat. Therefore, the region added jobs in the three Western Counties, while job growth in the three Eastern Counties was negative or flat. This further contributes to the shifting of the Economic center of the Region westward, at least in terms of job growth.
The other aspect to look at is population growth. People may keep their job in Milwaukee County, but move to one of the surrounding counties and choose to commute into the City, further strengthening commuting ties. Once again Milwaukee County was the only loser of population, losing 3,700 (.4%) people between 2002 and 2007. Waukesha (13,500 3.7%), Washington (9,000 7.4%), Ozaukee (3000 3.2%), Walworth (6,000 6.5%), and Racine (4,700 2.4%) all gained in population over this time period. As each county’s population growth was greater than its job growth, an increase in commuting is probably necessary for the new residents of working age to be employed.
Therefore, as job growth indicators for the middle part of the last decade show population and job growth in the western counties of the Milwaukee MSA, I predict that the commuting numbers also show a similar shift with increased commuting into Waukesha and Washington counties. As commuting tends to center between adjacent counties, I would especially expect increased commuting statistics between Waukesha and Washington Counties with the surrounding Dodge, Jefferson, and Walworth Counties. These increased commuting statistics may be enough to increase the EIM for each of these counties above 25 such that they are automatically included into the CSA.
However, if they are not, then I feel that our representatives in congress should be made aware of this issue, such that the most fitting definition of the Milwaukee-Waukesha-Racine CSA is put forth by the government. Looking at the congressional Map, this could be a trick in itself. As 5 congress men and women represent the area with which we are concerned.
http://www.legis.state.wi.us/ltsb/redistricting/Maps/con2007.pdf
While there are only definitions at stake, it is the larger reflection of the economic development and success of SE Wisconsin that is the issue.
Looking back at the relative metro sizes, if Walworth, Jefferson, and Dodge Counties were included in the Milwaukee CSA, then it would move the CSA into the same range as Portland, Kansas City, and Indianapolis, all cities considered to be peers of Milwaukee, rather than Salt Lake City, Virginia Beach, and Raleigh-Durham which currently have comparable CSAs to Milwaukee.
Once again, it is about an improved reflection of SE Wisconsin, and recognition of the interrelationships between the counties of this metro area. If the new census data do not automatically qualify these counties for inclusion in the metro area, then we must press upon our representatives to accurately define our metro region.
http://www.choosemilwaukee.com/
Similarly SEWRPC (South Eastern Wisconsin Regional Planning Commission) was created in 1960 to address regional transportation and infrastructural issues in the largest urbanized region of the state.
http://www.sewrpc.org
Both the Milwaukee 7 and SEWRPC include the counties of Milwaukee, Ozaukee, Washington, Waukesha, Walworth, Racine, and Kenosha.
Together, these seven counties account for 35.6% of Wisconsin’s population (2,003,218), but account for 52.5% of the income earned. (WI per capita - $25742, SEW - $38056)
In many ways, SE Wisconsin operates as a single economic entity, with a fair amount of integration and connection between these counties. However, the Census Bureau defines metro areas based upon commuting statistics as solicited during the decennial census. Therefore, as defined by the US, Milwaukee’s Metro, or Metropolitan Statistical Area (MSA) is only Milwaukee, Ozaukee, Washington, and Waukesha counties. The more expansive analysis of a Combined Statistical Area (CSA) adds Racine into the area. On the other hand, Kenosha is part of Chicago’s MSA.
While classifications are simply that, the shortchanging of the Metro area harms the region in statistical measures and regional perception. It fails to include counties experiencing higher growth, but are connected to the region (Racine, Walworth, Kenosha) as well as Western counties becoming more connected to the metro through Waukesha county’s growth (Jefferson and Dodge). As an example of this impact, the City of Milwaukee has an estimated population of 602,191- 23rd in the country; however, with a MSA population of 1,549,308 it falls to 39th largest Metro, looking at CSA, Milwaukee metro moves back up to 32nd.
Therefore, in terms of regional marketing, Milwaukee City is in population league with peers Denver (26), Seattle (24), Boston (21), and Baltimore (20), while in metro areas is compared to Jacksonville (40) and Providence, RI (37).
There are a few problems with the Census’ definition of the Milwaukee metro area. First, it fails to acknowledge the longstanding interconnection between all of the counties of SE Wisconsin. Secondly, it fails to acknowledge the growth of Waukesha County as an economically significant location in the state. This growth was possible through Waukesha’s interrelation with the rest of the metro region.
As mentioned before, the Census Bureau defines MSAs and CSAs through its Core Based Statistical Areas (CBSA) Analysis. Bear with me for a minute while I explain in a nutshell, this analysis.
For ease of understanding CBSAs are basically counties.
A CBSA is included in an MSA if either 25% of its workforce commuting to work in an MSA, or has 25% of its employment with workers commuting from an MSA.
A CSA adds to the MSA any additional CBSA with an Employment Integration Measure (EIM) of 25 or more. The EIM is the sum of the % of the CBSA workforce commuting into the MSA from the CBSA and the % of the employment filled b workers commuting from the MSA into the CBSA.
Finally, A CBSA may be included in a CSA if the EIM is greater than 15 and there is public support for the combination, as reflected by the federal representatives representing the CSA and the CBSA in question.
As The CBSAs are generally only redefined every 10 years, based upon commuting data, most of the commuting data that I was able to find was from the 2000 census.
http://www.dwd.wisconsin.gov/oea/pdf/commuting2000.pdf
However, referring to this document I was able to calculate the EIM scores for myself for this outer ring of counties that were not included in Milwaukee’s CSA, as well as to see how close Racine county was to falling within the Milwaukee MSA.
In 2000, 19.8% of the Racine County workforce worked in the Milwaukee MSA and 8% of the employment in Racine County was from people commuting from the Milwaukee MSA. Therefore, while Racine was still about 5% short from qualifying for the MSA, Racine scored an EIM of 27.8 and automatically qualified for the Milwaukee CSA.
The commuting statistics for the other counties are as follows:
Commute from County / Commute into County / EIM
Walworth 11.4% / 5.4% / 16.8
Jefferson 17% / 5.7% / 22.7
Dodge 18.2% / 4.6% / 22.8
Therefore, all three of Walworth, Jefferson, and Dodge Counties qualified in 2000 to be included in the Milwaukee CSA based on local opinion. The strength of the connection of these counties is not only to Milwaukee (with over 1000 people commuting to Milwaukee County from each of these counties), but the strength of the Waukesha County economy which drew over 3,000 commuters from each from Dodge and Walworth Counties and 5400 commuters from Jefferson County.
Jefferson and Dodge Counties nearly met the EIM threshold of 25 for automatic inclusion in the Milwaukee CSA, but none of these counties were included under the public opinion provision. My question is whether there is no public support, or no public knowledge of these designations?
But 2000 is long and gone, and the country is gearing up for census 2010, how will new data affect these determinations?
The Wisconsin Department of Workforce Development tracks the employment numbers around the state. http://www.dwd.wisconsin.gov/oea/county_profiles/current.htm Looking a job growth between 2002 and 2007 (as reported in the downloadable spreadsheet) was strongest in the region in Waukesha County, which added 15,000 jobs (+6.6%). Meanwhile, Milwaukee County lost 10,000 (-2%), but by 2007 was up off of a loss of 16,500 jobs from 2002-2005. Washington County added 5,000 (+9.9%) jobs and Walworth County added 2,000 (+4.3%) jobs, while Racine and Ozaukee Counties were flat. Therefore, the region added jobs in the three Western Counties, while job growth in the three Eastern Counties was negative or flat. This further contributes to the shifting of the Economic center of the Region westward, at least in terms of job growth.
The other aspect to look at is population growth. People may keep their job in Milwaukee County, but move to one of the surrounding counties and choose to commute into the City, further strengthening commuting ties. Once again Milwaukee County was the only loser of population, losing 3,700 (.4%) people between 2002 and 2007. Waukesha (13,500 3.7%), Washington (9,000 7.4%), Ozaukee (3000 3.2%), Walworth (6,000 6.5%), and Racine (4,700 2.4%) all gained in population over this time period. As each county’s population growth was greater than its job growth, an increase in commuting is probably necessary for the new residents of working age to be employed.
Therefore, as job growth indicators for the middle part of the last decade show population and job growth in the western counties of the Milwaukee MSA, I predict that the commuting numbers also show a similar shift with increased commuting into Waukesha and Washington counties. As commuting tends to center between adjacent counties, I would especially expect increased commuting statistics between Waukesha and Washington Counties with the surrounding Dodge, Jefferson, and Walworth Counties. These increased commuting statistics may be enough to increase the EIM for each of these counties above 25 such that they are automatically included into the CSA.
However, if they are not, then I feel that our representatives in congress should be made aware of this issue, such that the most fitting definition of the Milwaukee-Waukesha-Racine CSA is put forth by the government. Looking at the congressional Map, this could be a trick in itself. As 5 congress men and women represent the area with which we are concerned.
http://www.legis.state.wi.us/ltsb/redistricting/Maps/con2007.pdf
While there are only definitions at stake, it is the larger reflection of the economic development and success of SE Wisconsin that is the issue.
Looking back at the relative metro sizes, if Walworth, Jefferson, and Dodge Counties were included in the Milwaukee CSA, then it would move the CSA into the same range as Portland, Kansas City, and Indianapolis, all cities considered to be peers of Milwaukee, rather than Salt Lake City, Virginia Beach, and Raleigh-Durham which currently have comparable CSAs to Milwaukee.
Once again, it is about an improved reflection of SE Wisconsin, and recognition of the interrelationships between the counties of this metro area. If the new census data do not automatically qualify these counties for inclusion in the metro area, then we must press upon our representatives to accurately define our metro region.
Revisiting Miller Park
The Brewers are currently underway in their eighth season in Miller Park and as local residents, we have been paying a .1% sales tax to help pay for the stadium for thirteen years, with an estimated five more to go.
The new stadium for the Brewers was a controversial deal both due to the large percentage of the funding that has come from the public, and the decision by the Selig family to build the stadium in the parking lot of County Stadium, rather than an alternative proposed site in Downtown Milwaukee.
Since the opening of Miller Park, the Brewers have been sold to new ownership which has guided the team to relative success, making the playoffs for the first time in 25 years in 2008.
Not surprisingly, this on-field success has brought with it off-field success in the form of record attendance (3,000,000+ ) last season, good for 9th best home attendance in the league. Not bad for being the smallest Metro area with an MLB team. (however, look for a post coming shortly with respect to that)
With the success has brought new and intensified rivalries. Most notably with the Chicago Cubs and the St. Louis Cardinals. These rivalries have brought about all manners of comparisons between these teams competing for the Central Division crown - on the field etiquette (players), off the field etiquette (fans), fan baseball knowledge, attractiveness of fans, which side of the bread you should butter, - and of course the Home Stadiums themselves.
Miller Park differs from Wrigley Field (Cubs) and Busch Stadium (Cardinals) in two obvious ways - 1. It has a retractable roof (but that would have to be another post) and 2. Wrigley and Busch are located downtown or within densely developed neighborhoods, while Miller Park is built outside of downtown and is surrounded by parking lots.
Did Milwaukee and the Brewers miss out on an opportunity to build their stadiums downtown? Are either or both worse off for it? Is there any hope for the future?
Urban Milwaukee recently wrote their take on the subject:
http://urbanmilwaukee.com/2009/05/28/mil....kee-vs-st-louis
Thursday Associates, a Chicago design firm specializing in large, urban developments was contracted by the City to provide renderings and plans for a downtown stadium.
http://www.thursdayassociates.net/Baseball%20Projects/milwaukee.htm
Looking at the site plan, the Downtown Stadium would have combined three blocks by closing off McKinley at Water Street.
Even with the combination of these blocks, the footprint of the stadium is still pretty small, much smaller than the footprint of Miller Park. As the Bradley Center will attest to, much of the revenue from a stadium comes from the ability to generate alternative forms of revenue while people are at the games - concessions, restaurants, attractions, stores, games, and a modern stadium needs room for all of these amenities.
Looking at Thursday's renderings, the pictured stadium looks rather "quaint" - kind of like if you rebuilt Wrigley using basically the same plans. It doesn't look like it has the space for the wide concession areas, ample bathrooms and good sight lines that make Miller Park a much more enjoyable experience for watching baseball.
The proposed Downtown Stadium was to be located at a mostly currently undeveloped block in the area made available through the demolition of the Park East Freeway Spur. Looking to the Parking Plan from Thursday, the rest of the Park East would be devoted to parking through a combination of "Temporary" lots, Parking Structures, and Mixed use Parking Structures. Some of these areas that would have been parking are now buildings - Trostel Square, MSOE's Kern Center, a local church expansion, Part of the Manpower Headquarters, Park East Enterprise Lofts, and Aloft Hotel, or have currently pending development proposals - North End Phase Three, Eco Square, Park East Square Phase 1.
Therefore, to accommodate the parking needs to move 40,000 people in and out of the downtown, what the City would have gained in one big development, the City would have already lost in substantial other developments. But, it should also be noted that much of the Park East currently sits undeveloped, nearly 15 years after this was proposed. Clearly a mixed used parking garage is a higher current use than a vacant lot.
This ties into another issue regarding large scale entertainment developments in Downtown. While Miller Park attracts an average of over 37,000 people to each game, it is only used 81 times a year. The remaining 284 days, it sits basically unused. It took Downtown 10+ years to begin to turn the corner from Downtown being a "ghost town" after 5 pm as everyone returned home to the suburbs after work. An entertainment venue provides large spikes of activity, but this can be hard on infrastructure (see the large number of required parking structures above) that while necessary for game day, would flood the downtown parking market the rest of the year. In addition to this required infrastructure, when there is not a game, it reduces street activation, the development of neighborhoods any extension of Downtown to the North. In effect, we would have replaced the Park East barrier with a newer one.
I seem to remember (I was only 14 at the time this was debated) that tailgating was an issue that weighed against a downtown location. A lot of people like to tailgate. Looking at Thursday's Parking Plan, there would be "Temporary" surface lots - sounds like a good tailgating location to me. Additionally, parking structures could sell tickets to the top decks (which could allow grilling) for a premium, creating additional space for 'wursts to be grilled.
But I would submit that if unable to tailgate, those same people would do alright at one of the many bars on Water Street, with undoubtedly a few more springing up due to the stadium. But how many more? The Bradley Center, while half the size of Miller Park, but holding more events per year, doesn't seem to support much of any of a bar district on its own. Certainly 3rd street has seen a resurgence as of late, and it gains from BC activity, but I don't think that 3rd street exists due to the BC.
Urban Milwaukee derides the short-sightedness of Miller Parks' vast Parking lots in an age when people are driving less, and touts Bush Stadium's proposed "Ballpark Village" mixed use development as the type of development that Miller Park is/will be unable to generate. However, right now "Ballpark Village" is itself and undeveloped parking lot.
http://maps.google.com/maps?client=firef....011201&t=h&z=17
Miller Park has lots of those. If car ridership ever dropped to the level whereby Miller Park had too much parking, then just as easily as the development of "Ballpark Village," the furthest West Portions of the Dodgers Lot, or the Northern Lot, Giants, could be developed into a higher use.
All in all, while I think that a Downtown Stadium would have been good for my current enjoyment, and initial development within the Downtown, the development costs that would have come with the downtown stadium taking up much of the Park East, and creating a barrier to Downtown expansion, make the ultimate location of Miller Park probably better for the ongoing development of the region and downtown as well.
The new stadium for the Brewers was a controversial deal both due to the large percentage of the funding that has come from the public, and the decision by the Selig family to build the stadium in the parking lot of County Stadium, rather than an alternative proposed site in Downtown Milwaukee.
Since the opening of Miller Park, the Brewers have been sold to new ownership which has guided the team to relative success, making the playoffs for the first time in 25 years in 2008.
Not surprisingly, this on-field success has brought with it off-field success in the form of record attendance (3,000,000+ ) last season, good for 9th best home attendance in the league. Not bad for being the smallest Metro area with an MLB team. (however, look for a post coming shortly with respect to that)
With the success has brought new and intensified rivalries. Most notably with the Chicago Cubs and the St. Louis Cardinals. These rivalries have brought about all manners of comparisons between these teams competing for the Central Division crown - on the field etiquette (players), off the field etiquette (fans), fan baseball knowledge, attractiveness of fans, which side of the bread you should butter, - and of course the Home Stadiums themselves.
Miller Park differs from Wrigley Field (Cubs) and Busch Stadium (Cardinals) in two obvious ways - 1. It has a retractable roof (but that would have to be another post) and 2. Wrigley and Busch are located downtown or within densely developed neighborhoods, while Miller Park is built outside of downtown and is surrounded by parking lots.
Did Milwaukee and the Brewers miss out on an opportunity to build their stadiums downtown? Are either or both worse off for it? Is there any hope for the future?
Urban Milwaukee recently wrote their take on the subject:
http://urbanmilwaukee.com/2009/05/28/mil....kee-vs-st-louis
Thursday Associates, a Chicago design firm specializing in large, urban developments was contracted by the City to provide renderings and plans for a downtown stadium.
http://www.thursdayassociates.net/Baseball%20Projects/milwaukee.htm
Looking at the site plan, the Downtown Stadium would have combined three blocks by closing off McKinley at Water Street.
Even with the combination of these blocks, the footprint of the stadium is still pretty small, much smaller than the footprint of Miller Park. As the Bradley Center will attest to, much of the revenue from a stadium comes from the ability to generate alternative forms of revenue while people are at the games - concessions, restaurants, attractions, stores, games, and a modern stadium needs room for all of these amenities.
Looking at Thursday's renderings, the pictured stadium looks rather "quaint" - kind of like if you rebuilt Wrigley using basically the same plans. It doesn't look like it has the space for the wide concession areas, ample bathrooms and good sight lines that make Miller Park a much more enjoyable experience for watching baseball.
The proposed Downtown Stadium was to be located at a mostly currently undeveloped block in the area made available through the demolition of the Park East Freeway Spur. Looking to the Parking Plan from Thursday, the rest of the Park East would be devoted to parking through a combination of "Temporary" lots, Parking Structures, and Mixed use Parking Structures. Some of these areas that would have been parking are now buildings - Trostel Square, MSOE's Kern Center, a local church expansion, Part of the Manpower Headquarters, Park East Enterprise Lofts, and Aloft Hotel, or have currently pending development proposals - North End Phase Three, Eco Square, Park East Square Phase 1.
Therefore, to accommodate the parking needs to move 40,000 people in and out of the downtown, what the City would have gained in one big development, the City would have already lost in substantial other developments. But, it should also be noted that much of the Park East currently sits undeveloped, nearly 15 years after this was proposed. Clearly a mixed used parking garage is a higher current use than a vacant lot.
This ties into another issue regarding large scale entertainment developments in Downtown. While Miller Park attracts an average of over 37,000 people to each game, it is only used 81 times a year. The remaining 284 days, it sits basically unused. It took Downtown 10+ years to begin to turn the corner from Downtown being a "ghost town" after 5 pm as everyone returned home to the suburbs after work. An entertainment venue provides large spikes of activity, but this can be hard on infrastructure (see the large number of required parking structures above) that while necessary for game day, would flood the downtown parking market the rest of the year. In addition to this required infrastructure, when there is not a game, it reduces street activation, the development of neighborhoods any extension of Downtown to the North. In effect, we would have replaced the Park East barrier with a newer one.
I seem to remember (I was only 14 at the time this was debated) that tailgating was an issue that weighed against a downtown location. A lot of people like to tailgate. Looking at Thursday's Parking Plan, there would be "Temporary" surface lots - sounds like a good tailgating location to me. Additionally, parking structures could sell tickets to the top decks (which could allow grilling) for a premium, creating additional space for 'wursts to be grilled.
But I would submit that if unable to tailgate, those same people would do alright at one of the many bars on Water Street, with undoubtedly a few more springing up due to the stadium. But how many more? The Bradley Center, while half the size of Miller Park, but holding more events per year, doesn't seem to support much of any of a bar district on its own. Certainly 3rd street has seen a resurgence as of late, and it gains from BC activity, but I don't think that 3rd street exists due to the BC.
Urban Milwaukee derides the short-sightedness of Miller Parks' vast Parking lots in an age when people are driving less, and touts Bush Stadium's proposed "Ballpark Village" mixed use development as the type of development that Miller Park is/will be unable to generate. However, right now "Ballpark Village" is itself and undeveloped parking lot.
http://maps.google.com/maps?client=firef....011201&t=h&z=17
Miller Park has lots of those. If car ridership ever dropped to the level whereby Miller Park had too much parking, then just as easily as the development of "Ballpark Village," the furthest West Portions of the Dodgers Lot, or the Northern Lot, Giants, could be developed into a higher use.
All in all, while I think that a Downtown Stadium would have been good for my current enjoyment, and initial development within the Downtown, the development costs that would have come with the downtown stadium taking up much of the Park East, and creating a barrier to Downtown expansion, make the ultimate location of Miller Park probably better for the ongoing development of the region and downtown as well.
Friday, May 15, 2009
Replace the Bradley Center or Let the Bucks Bolt?
In 1988 the Bradley Center was constructed, paid for by an $80M gift by the Jane Bradley-Petit in honor of her father, co-founder of Allen-Bradley. Currently home to the Milwaukee Bucks (NBA), Marquette Golden Eagles (NCAA), Milwaukee Admirals (IHL), and Milwaukee Iron (AF2).
Currently the Bradley Center is the 4th oldest arena used by an NBA team. This is soon to change when the New Jersey Nets move to Brooklyn in 2011. The other two older facilities are Madison Square Garden and a heavily remodeled Oracle Center in Oakland, CA.
The Bradley Center's facility problems come from three directions. First, the stadium was constructed with the hopes of obtaining an NHL team. This never came to fruition, but the layout and the sightlines of the stadium are designed for a much different event than for its current predominant use (basketball).
Second, The arena is now over twenty years old and faces substantial deferred maintenance issues, including a highly outdated scoreboard/sounds system and need for a new HVAC system.
Finally, the BC was designed at a time when it was generally thought that suburban, monolithic, single-use facilities would also work in urban settings (see Grand Avenue Mall). However, current development trends and consumer preferences call for mixed use development with additional room for retail, dining, business activity within the complex to not only enhance the experience before/after events, but to promote activity/revenue when the facility is not host to a big event.
The Bucks have threatened nearly every year for recent memory of leaving if concessions aren't made or improvements to the arena made. However, when push came to shove, the Bucks owner, Sen. Kohl, in 2003 pulled back from selling the team to a group of investors, including Michael Jordan, as he was committed to keeping the team in Wisconsin and it was widely speculated that the new ownership would move the team. However, that may have had more to do with his reelection campaign than desire to keep the team.
All of this leads to the question - Should the public of Milwaukee (or Wisconsin) pony up for improvements to, or replacement of, the Bradley Center. What if it can be guaranteed that without this public investment, the Bucks will be moved by a new owner within 5 years? - Herb Kohl is currently 74 and is up for reelection in 2012. He hasn't indicated one way or another regarding running for another term at the age of 77.
Many economists write against the claim of economic benefits provided to a city by the existence of professional sports, especially professional sports with publicly funded stadiums. Here are two examples:
http://www.cato.org/pubs/regulation/regv23n2/coates.pdf
http://www.cato.org/pubs/briefs/bp89.pdf
Furthermore, other studies have found that entertainment spending is a relatively inelastic amount, with a local population's entertainment dollars being spread out amongst the available entertainment venues. Therefore, spending on professional sports are generally dollars that are not spent on other amenities. While the case can be made that professional sports attract people from the whole region, the same can be said for the transfer of those dollars within the region as well.
This was one of the argument made by the Seattle Supersonics in their legal fight to break their lease in order to move to Oklahoma City.
http://seattletimes.nwsource.com/html/nba/2004131860_sonics18m.html
Coates, in the articles above, also identifies a net negative impact between the presence of professional sports and local personal income. He attributes this to the fact that professional sports are highly vertical organizations in terms of compensation. Also, while a franchise may be located locally, many of the people at the top of the compensation (players, coaches, management, owners) may have little or no connection to the local area. Many do not even live in the local area. Therefore, the professional sports team becomes a conduit transferring wealth out of a region. Other more locally centered forms of entertainment have better economic multiplying effects for each dollar spent.
However, there is one harder to quantify benefit that professional sports franchises provide, a civic/local pride, status type benefit. Anyone who has been a part of a local team's championship/success understands that a local professional team can provide a type of common ground that brings a community together, and provides a positive image/positive community marketing to the country.
But what is this worth? Once again it is hard to quantify, but the question is whether it is worth the opportunity cost of the public portion of the financing of the team.
Which all brings us back to the Bradley Center and the Milwaukee Bucks. Recent events in this analysis include the Bradley Center board deciding against selling the naming rights.
http://www.jsonline.com/news/milwaukee/29583809.html
But the Governor included bonding authorization for up to $5M in his budget to put towards the estimated $23M in repairs/maintenance. So initial amounts of public financing are already in the works.
Finally, the Bradley Center owns considerable devlopable land. The Bradley Center sits on a 4 city block block, which includes an underutilized NE corner, a surface parking lot on the NW corner and a large parking structure on the West side, not to mention a large plaza area on the SW corner and plaza area on the East side. Bradley Center officials have hired a developer and consultant to create and pitch a development proposal to retail, restaurant, and hotel tenants for such a project.
http://www.bizjournals.com/milwaukee/stories/2009/01/19/story4.html
This type of a redevelopment of the Bradley Center would reconfigure the arena as part of a mixed use development that would offer the types of amenities that the current facility is lacking.
Currently the Bradley Center is the 4th oldest arena used by an NBA team. This is soon to change when the New Jersey Nets move to Brooklyn in 2011. The other two older facilities are Madison Square Garden and a heavily remodeled Oracle Center in Oakland, CA.
The Bradley Center's facility problems come from three directions. First, the stadium was constructed with the hopes of obtaining an NHL team. This never came to fruition, but the layout and the sightlines of the stadium are designed for a much different event than for its current predominant use (basketball).
Second, The arena is now over twenty years old and faces substantial deferred maintenance issues, including a highly outdated scoreboard/sounds system and need for a new HVAC system.
Finally, the BC was designed at a time when it was generally thought that suburban, monolithic, single-use facilities would also work in urban settings (see Grand Avenue Mall). However, current development trends and consumer preferences call for mixed use development with additional room for retail, dining, business activity within the complex to not only enhance the experience before/after events, but to promote activity/revenue when the facility is not host to a big event.
The Bucks have threatened nearly every year for recent memory of leaving if concessions aren't made or improvements to the arena made. However, when push came to shove, the Bucks owner, Sen. Kohl, in 2003 pulled back from selling the team to a group of investors, including Michael Jordan, as he was committed to keeping the team in Wisconsin and it was widely speculated that the new ownership would move the team. However, that may have had more to do with his reelection campaign than desire to keep the team.
All of this leads to the question - Should the public of Milwaukee (or Wisconsin) pony up for improvements to, or replacement of, the Bradley Center. What if it can be guaranteed that without this public investment, the Bucks will be moved by a new owner within 5 years? - Herb Kohl is currently 74 and is up for reelection in 2012. He hasn't indicated one way or another regarding running for another term at the age of 77.
Many economists write against the claim of economic benefits provided to a city by the existence of professional sports, especially professional sports with publicly funded stadiums. Here are two examples:
http://www.cato.org/pubs/regulation/regv23n2/coates.pdf
http://www.cato.org/pubs/briefs/bp89.pdf
Furthermore, other studies have found that entertainment spending is a relatively inelastic amount, with a local population's entertainment dollars being spread out amongst the available entertainment venues. Therefore, spending on professional sports are generally dollars that are not spent on other amenities. While the case can be made that professional sports attract people from the whole region, the same can be said for the transfer of those dollars within the region as well.
This was one of the argument made by the Seattle Supersonics in their legal fight to break their lease in order to move to Oklahoma City.
http://seattletimes.nwsource.com/html/nba/2004131860_sonics18m.html
Coates, in the articles above, also identifies a net negative impact between the presence of professional sports and local personal income. He attributes this to the fact that professional sports are highly vertical organizations in terms of compensation. Also, while a franchise may be located locally, many of the people at the top of the compensation (players, coaches, management, owners) may have little or no connection to the local area. Many do not even live in the local area. Therefore, the professional sports team becomes a conduit transferring wealth out of a region. Other more locally centered forms of entertainment have better economic multiplying effects for each dollar spent.
However, there is one harder to quantify benefit that professional sports franchises provide, a civic/local pride, status type benefit. Anyone who has been a part of a local team's championship/success understands that a local professional team can provide a type of common ground that brings a community together, and provides a positive image/positive community marketing to the country.
But what is this worth? Once again it is hard to quantify, but the question is whether it is worth the opportunity cost of the public portion of the financing of the team.
Which all brings us back to the Bradley Center and the Milwaukee Bucks. Recent events in this analysis include the Bradley Center board deciding against selling the naming rights.
http://www.jsonline.com/news/milwaukee/29583809.html
But the Governor included bonding authorization for up to $5M in his budget to put towards the estimated $23M in repairs/maintenance. So initial amounts of public financing are already in the works.
Finally, the Bradley Center owns considerable devlopable land. The Bradley Center sits on a 4 city block block, which includes an underutilized NE corner, a surface parking lot on the NW corner and a large parking structure on the West side, not to mention a large plaza area on the SW corner and plaza area on the East side. Bradley Center officials have hired a developer and consultant to create and pitch a development proposal to retail, restaurant, and hotel tenants for such a project.
http://www.bizjournals.com/milwaukee/stories/2009/01/19/story4.html
This type of a redevelopment of the Bradley Center would reconfigure the arena as part of a mixed use development that would offer the types of amenities that the current facility is lacking.
Thursday, May 14, 2009
Wisconsin the "Tax Hell"
If you have spent any time living in Wisconsin, you undoubtedly will have heard the phrase that Wisconsin is a "Tax Hell." Now, I've often wondered just what this so called tax hell looked like, and what a "tax heaven" in a US state looks like.
Referencing taxfoundation.org, Wisconsin ranks 41st in terms of state/local tax burden (taxes paid as a % of income) at 10.2% of income. Of all 50 states, New Jersey ranks highest at 11.8%, while Alaska is the lowest at 6.4%. Removing the outliers, 46 states fall between 7% and 11.1%, with the national average being 9.7%
http://www.taxfoundation.org/files/sr163.pdf
Now that we have a few numbers to work from, Wisconsin ranks in the bottom quintile for tax burden. Is this "Tax Hell?" Even compared to other states Wisconsin is much closer to the national average (+.5%) than to the highest tax burden (-1.6%). Twenty-five states fall within +/- .5% of the national average. This means that a Wisconsin tax payer making $100k a year pays about $500 more in state and local taxes than an average tax payer nationwide. Does that .5% place the Wisconsin tax payer in Hell?
Especially once the outliers are removed, Wisconsin is certainly on the high end of tax burden, but I would consider to be still within an average range.
In fact, while the Tax Foundation lists Wisconsin at 41st, other such rankings place Wisconsin in the 30's, which is even closer to "slightly above average" rather than "Tax Hell." the Tax Foundation's similar report regarding business tax bumps Wisconsin down to 38th.
http://www.taxfoundation.org/files/bp58.pdf
At what ranking does it shift from "Tax Hell" to "not enough of a difference to be blamed as a negative impact?"
Looking at a much less transparent report that ranks states based on various factors, but doesn't identify methodology or ranking definitions, CNBC.com ranked Wisconsin #15 for Transportation costs; #9 for Population Education; #22 for Cost of Living; and #25 for Quality of Life. All of those place Wisconsin in the top half of states on those measures.
http://www.cnbc.com/id/25501924
These are also important factors when evaluating a place to live or work. If Wisconsin's extra tax costs are returning to the state in the form of increased quality of life aspects, then higher taxes do not necessarily equal "Tax Hell." In a quick comparison to Alaska, with a very low tax burden (#1), but very high costs of living (#47). In one respect, the money that you save from lower tax burden is still taken out of your wallet in higher living costs and you are no better off individually.
So what makes Wisconsin a high tax state? The Wisconsin Taxpayers Alliance undertook answering this question and published an informative report five years ago.
http://www.wistax.org/news_releases/2003/why%20high%20taxes.pdf
While the numbers may be a little different in 2009, the same basic aspects still hold true. Wisconsin was founded (generally by Germans and Scandinavians) on a tradition of having a bigger, more centralized government, than in other states. Having a larger, more involved government, inherently requires higher taxes.
Specifically this is seen in two areas of State spending - highway construction and education (both K-12 and College). Wisconsin spends above average amounts compared to the rest of the country on these two programs, while spending around the average on basically all other expenditures. According to Taxpayers' Alliance, these two programs account for over 70% of the difference in spending between Wisconsin and the national average.
However, it is interesting to note back to the CNBC rankings, that Transportation costs and Population Education were the two categories that Wisconsin ranked the highest in. I submit that this didn't happen by chance, but rather by Wisconsin's commitment to these two areas.
But this isn't the whole story. According to Taxpayers' Alliance, Wisconsin also collects its revenue differently than the national averages. Specifically, Wisconsin relies more upon income and property taxes, than fees and Federal Government assistance than most states.
I have addressed Federal Government assistance elsewhere(see Federal Government ROTing our Country), so I won't go into detail about it here. However, I feel that the fees are another form of culture decision that Wisconsin has made. I would attribute it to the "progressive" side in Wisconsin history, desiring to make the government funded in a more progressive manner, thereby limiting fee costs which are viewed as a form of regressive taxation.
So how does Wisconsin become less of a "Tax Hell?" The answer is relatively simple, spend less - although changes in state revenue collection - more Federal money would reduce the burden paid by the state's citizens. Higher permit/user fees would also reduce the income/property tax burden, but may also reduce the quality of life aspects by limiting access to the state's amenities.
If Wisconsin is shooting to be not a "Tax Hell," then it would seem logical to start by cutting those areas in which Wisconsin spends more than average - Transportation and Education. On the one hand, this also eliminates two factors that actually weigh in Wisconsin's favor in comparison to other places, do we want to eliminate things that make us stand out in an effort to be more mediocre on tax rate?
On the other hand, Wisconsin couldn't have picked two worse areas to make its mark. Wisconsin invests its money in transportation and education, increasing the rate at which its educated and mobile population leaves. If education is the number one factor in increasing the likelihood that someone will move out of their home state, then investing so much in education in Wisconsin is in some respects driving economic growth elsewhere. Top notch transportation systems allow those people to leave while being able to return to conveniently visit family and friends left behind.
To those ends, I think that Wisconsin can afford to decrease spending (or increase fees) on both of these areas. Rather, I am more in favor of reducing direct state support while increasing the fee that users pay for these services. Tuition at our state universities is insanely low, especially given the quality of the institutions. Similarly, Wisconsin's populace's loathing of tollways is something that they need to get over. These types of fees are now widely used, accurately allocate contribution based upon use, and allow for innovative infrastructure utilization such as congestion based pricing to improve the overall quality of the experience of the system.
I find it interesting that the two areas of spending that Wisconsin outpaces the nation are one traditionally "Democratic" pet - education; and one traditionally "Republican" pet - highway construction. Let's see some "bipartisanship" and reduce spending on both of these areas.
Tom Still of the Wisconsin Technology Counsel identifies the current budget crisis as an opportunity for Wisconsin to implement policies that address the current budget deficit as well as to improve Wisconsin's competitiveness once the current economic problems pass.
http://www.biztimes.com/blogs/milwaukee-....eas-for-ch ange
Some the suggestions Still presents, I would have to agree with.
Wisconsin does have way too many layers of government, between 72 counties, cities, townships, school districts. Some serious consolidation of governments would go a long way to reducing the cost of government in Wisconsin.
Eliminating the State Highway Patrol - ever since I had to change a flat tire on a narrow stretch of I-94 where I had to stand in the right hand lane to change the tire and the State Patrol refused to park a car behind me to warn traffic because "they saw no need to write me a ticket" - I have no support of the SHP. Their function can be adequately served by local law enforcement.
Is Wisconsin a "Tax Hell?" The real answer is does it really matter, as long as the actual rate doesn't place Wisconsin at too much of a disadvantage, but the additional funds allows Wisconsin to stand out in other areas. I guess that I am questioning the ROI that Wisconsin receives for its increased tax rate specifically to fund its above-average transportation and education systems.
Looking at each of these a little closer:
Transportation:
The Transportation Development Association of Wisconsin commissioned this study in 2003 that performed a cost/benefit analysis of investment in Wisconsin transportation.
Study:
http://www.tdawisconsin.org/data/publications/CambridgeComplete.pdf
TDA Info:
http://www.tdawisconsin.org/
"The primary goal of the Transportation Development Association of Wisconsin is to help Wisconsin expand its economy by building on the state’s transportation strengths and addressing its transportation weaknesses."
So while this certainly isn't what can be considered to be a study without its predetermined interests (but really what study isn't) - it does outline and identify the benefits of transportation investment. A distinction can be drawn between transportation investments that improve commerce in the state versus transportation investments that improve travel/leisure time. The gains in commerce come from elimination of choke points, while the travel/leisure benefits come secondarily. Basically commerce improves with increasing capacity at peak travel periods (ie rush hour) while that additional capacity may make traveling to grandma's (not peak travel) somewhat quicker, as pleasant as the visit might be, its not really improving our economy.
However, when it comes to cost saving and therefore reducing taxes, then it seems that transit infrastructure investment is stuck in an inefficient development model where the only solution to congestion is paving more lanes. This is analogous to building a bigger factory because you can't make any more product during first shift, rather than adding a second a third shift, and thereby using your infrastructure more efficiently.
For example, we will be spending $50M to create a western bypass of Waukesha.
http://www.jsonline.com/news/waukesha/44788327.html
How long will it take to see a return on this investment? Is this bypass going to help commerce in the State of Wisconsin? I don't know.
Wisconsin should implement toll roads. If only for the sole reason that it will enable the congestion based pricing that makes more efficient use of the existing highway infrastructure. I guess see a lot of state funds spent on investments that don't improve state commerce. On the other hand, more investments in Wisconsin's ports should be made.
http://milwaukee.bizjournals.com/milwaukee/stories/2009/05/11/daily48.html
Therefore, I guess that while transportation infrastructure is of vital importance to economic development, I think that the same or better level of transportation service can be achieved through more innovative and efficient investments.
Education:
I am going to focus on college education, which is only a fraction of the overall education spending in the State.
When it comes to subsidizing undergraduate (and graduate) tuition to state colleges, once again, I'm not sure that Wisconsin is getting the best ROI. For the just finishing academic year, UW ranks as second lowest for in state undergraduate tuition.
http://apa.wisc.edu/images/tables/BigTentuition.pdf
Northwestern isn't included because it is private, but is undoubtedly highest for undergraduate tuition (but out of state undergrad is probably competitive).
According to those numbers, UW charges $2500 per year less than average. In other terms, the average Big Ten tuition is 33% higher than UW's. Assuming that there are 36,000 undergrads, and 2/3 of these undergrads are in-state (complete speculation), UW requires $60M (24,000 undergrads X $2500) more tax money to operate with this in state tuition subsidy than the average Big Ten school. This only counts UW-Madison - the University of Wisconsin System has a total enrollment of 175,000.
http://www.wisconsin.edu/news/2009/r090316.htm
Of course, some of these enrollments are out of state or part time, and not all University System schools have the same type of subsidy as UW-Madison, but I think that some form of subsidy can be assumed. Along the same lines, UW's out of state tuition is 3rd lowest in the Big Ten and similarly is $2000 lower than the Big Ten average. This could go either way, in that a lower out of state tuition, may help in gaining more out of state undergrads, thereby increasing the tuition dollars for the same number of enrolled students.
As an aside, the large difference between in-state and out of state, creates an incentive for the state schools to adopt admission policies that favor increased enrollment by out of state students, thereby countering State initiatives to increase the education level of state residents.
Now, in-state tuition is a great benefit to in-state students, I myself benefited from in-state tuition and I can't deny the additional freedom that having a comparatively low student loan debt burden is. But once again, my low debt burden in theory makes me more mobile, and therefore more likely to move out of the state.
The attainment of higher education does increase your mobility away from where you grew up. The key is to make the state more attractive to highly educated people, the industries that employ them, and the entrepreneurial climate that allows business creation and growth.
In one quick example:
That same $60M subsidy to in-state undergraduates, could instead fund a lot of economic development. A $60M yearly angel investment fund for start-up companies would have much more impact on the state economy, making it a more attractive place for grads of higher education to work (UW or from out of state), thus giving UW grads an incentive to stay, as well as creating an incentive for an educated workforce to migrate into Wisconsin, the cheapest way to a highly educated populace.
Referencing taxfoundation.org, Wisconsin ranks 41st in terms of state/local tax burden (taxes paid as a % of income) at 10.2% of income. Of all 50 states, New Jersey ranks highest at 11.8%, while Alaska is the lowest at 6.4%. Removing the outliers, 46 states fall between 7% and 11.1%, with the national average being 9.7%
http://www.taxfoundation.org/files/sr163.pdf
Now that we have a few numbers to work from, Wisconsin ranks in the bottom quintile for tax burden. Is this "Tax Hell?" Even compared to other states Wisconsin is much closer to the national average (+.5%) than to the highest tax burden (-1.6%). Twenty-five states fall within +/- .5% of the national average. This means that a Wisconsin tax payer making $100k a year pays about $500 more in state and local taxes than an average tax payer nationwide. Does that .5% place the Wisconsin tax payer in Hell?
Especially once the outliers are removed, Wisconsin is certainly on the high end of tax burden, but I would consider to be still within an average range.
In fact, while the Tax Foundation lists Wisconsin at 41st, other such rankings place Wisconsin in the 30's, which is even closer to "slightly above average" rather than "Tax Hell." the Tax Foundation's similar report regarding business tax bumps Wisconsin down to 38th.
http://www.taxfoundation.org/files/bp58.pdf
At what ranking does it shift from "Tax Hell" to "not enough of a difference to be blamed as a negative impact?"
Looking at a much less transparent report that ranks states based on various factors, but doesn't identify methodology or ranking definitions, CNBC.com ranked Wisconsin #15 for Transportation costs; #9 for Population Education; #22 for Cost of Living; and #25 for Quality of Life. All of those place Wisconsin in the top half of states on those measures.
http://www.cnbc.com/id/25501924
These are also important factors when evaluating a place to live or work. If Wisconsin's extra tax costs are returning to the state in the form of increased quality of life aspects, then higher taxes do not necessarily equal "Tax Hell." In a quick comparison to Alaska, with a very low tax burden (#1), but very high costs of living (#47). In one respect, the money that you save from lower tax burden is still taken out of your wallet in higher living costs and you are no better off individually.
So what makes Wisconsin a high tax state? The Wisconsin Taxpayers Alliance undertook answering this question and published an informative report five years ago.
http://www.wistax.org/news_releases/2003/why%20high%20taxes.pdf
While the numbers may be a little different in 2009, the same basic aspects still hold true. Wisconsin was founded (generally by Germans and Scandinavians) on a tradition of having a bigger, more centralized government, than in other states. Having a larger, more involved government, inherently requires higher taxes.
Specifically this is seen in two areas of State spending - highway construction and education (both K-12 and College). Wisconsin spends above average amounts compared to the rest of the country on these two programs, while spending around the average on basically all other expenditures. According to Taxpayers' Alliance, these two programs account for over 70% of the difference in spending between Wisconsin and the national average.
However, it is interesting to note back to the CNBC rankings, that Transportation costs and Population Education were the two categories that Wisconsin ranked the highest in. I submit that this didn't happen by chance, but rather by Wisconsin's commitment to these two areas.
But this isn't the whole story. According to Taxpayers' Alliance, Wisconsin also collects its revenue differently than the national averages. Specifically, Wisconsin relies more upon income and property taxes, than fees and Federal Government assistance than most states.
I have addressed Federal Government assistance elsewhere(see Federal Government ROTing our Country), so I won't go into detail about it here. However, I feel that the fees are another form of culture decision that Wisconsin has made. I would attribute it to the "progressive" side in Wisconsin history, desiring to make the government funded in a more progressive manner, thereby limiting fee costs which are viewed as a form of regressive taxation.
So how does Wisconsin become less of a "Tax Hell?" The answer is relatively simple, spend less - although changes in state revenue collection - more Federal money would reduce the burden paid by the state's citizens. Higher permit/user fees would also reduce the income/property tax burden, but may also reduce the quality of life aspects by limiting access to the state's amenities.
If Wisconsin is shooting to be not a "Tax Hell," then it would seem logical to start by cutting those areas in which Wisconsin spends more than average - Transportation and Education. On the one hand, this also eliminates two factors that actually weigh in Wisconsin's favor in comparison to other places, do we want to eliminate things that make us stand out in an effort to be more mediocre on tax rate?
On the other hand, Wisconsin couldn't have picked two worse areas to make its mark. Wisconsin invests its money in transportation and education, increasing the rate at which its educated and mobile population leaves. If education is the number one factor in increasing the likelihood that someone will move out of their home state, then investing so much in education in Wisconsin is in some respects driving economic growth elsewhere. Top notch transportation systems allow those people to leave while being able to return to conveniently visit family and friends left behind.
To those ends, I think that Wisconsin can afford to decrease spending (or increase fees) on both of these areas. Rather, I am more in favor of reducing direct state support while increasing the fee that users pay for these services. Tuition at our state universities is insanely low, especially given the quality of the institutions. Similarly, Wisconsin's populace's loathing of tollways is something that they need to get over. These types of fees are now widely used, accurately allocate contribution based upon use, and allow for innovative infrastructure utilization such as congestion based pricing to improve the overall quality of the experience of the system.
I find it interesting that the two areas of spending that Wisconsin outpaces the nation are one traditionally "Democratic" pet - education; and one traditionally "Republican" pet - highway construction. Let's see some "bipartisanship" and reduce spending on both of these areas.
Tom Still of the Wisconsin Technology Counsel identifies the current budget crisis as an opportunity for Wisconsin to implement policies that address the current budget deficit as well as to improve Wisconsin's competitiveness once the current economic problems pass.
http://www.biztimes.com/blogs/milwaukee-....eas-for-ch ange
Some the suggestions Still presents, I would have to agree with.
Wisconsin does have way too many layers of government, between 72 counties, cities, townships, school districts. Some serious consolidation of governments would go a long way to reducing the cost of government in Wisconsin.
Eliminating the State Highway Patrol - ever since I had to change a flat tire on a narrow stretch of I-94 where I had to stand in the right hand lane to change the tire and the State Patrol refused to park a car behind me to warn traffic because "they saw no need to write me a ticket" - I have no support of the SHP. Their function can be adequately served by local law enforcement.
Is Wisconsin a "Tax Hell?" The real answer is does it really matter, as long as the actual rate doesn't place Wisconsin at too much of a disadvantage, but the additional funds allows Wisconsin to stand out in other areas. I guess that I am questioning the ROI that Wisconsin receives for its increased tax rate specifically to fund its above-average transportation and education systems.
Looking at each of these a little closer:
Transportation:
The Transportation Development Association of Wisconsin commissioned this study in 2003 that performed a cost/benefit analysis of investment in Wisconsin transportation.
Study:
http://www.tdawisconsin.org/data/publications/CambridgeComplete.pdf
TDA Info:
http://www.tdawisconsin.org/
"The primary goal of the Transportation Development Association of Wisconsin is to help Wisconsin expand its economy by building on the state’s transportation strengths and addressing its transportation weaknesses."
So while this certainly isn't what can be considered to be a study without its predetermined interests (but really what study isn't) - it does outline and identify the benefits of transportation investment. A distinction can be drawn between transportation investments that improve commerce in the state versus transportation investments that improve travel/leisure time. The gains in commerce come from elimination of choke points, while the travel/leisure benefits come secondarily. Basically commerce improves with increasing capacity at peak travel periods (ie rush hour) while that additional capacity may make traveling to grandma's (not peak travel) somewhat quicker, as pleasant as the visit might be, its not really improving our economy.
However, when it comes to cost saving and therefore reducing taxes, then it seems that transit infrastructure investment is stuck in an inefficient development model where the only solution to congestion is paving more lanes. This is analogous to building a bigger factory because you can't make any more product during first shift, rather than adding a second a third shift, and thereby using your infrastructure more efficiently.
For example, we will be spending $50M to create a western bypass of Waukesha.
http://www.jsonline.com/news/waukesha/44788327.html
How long will it take to see a return on this investment? Is this bypass going to help commerce in the State of Wisconsin? I don't know.
Wisconsin should implement toll roads. If only for the sole reason that it will enable the congestion based pricing that makes more efficient use of the existing highway infrastructure. I guess see a lot of state funds spent on investments that don't improve state commerce. On the other hand, more investments in Wisconsin's ports should be made.
http://milwaukee.bizjournals.com/milwaukee/stories/2009/05/11/daily48.html
Therefore, I guess that while transportation infrastructure is of vital importance to economic development, I think that the same or better level of transportation service can be achieved through more innovative and efficient investments.
Education:
I am going to focus on college education, which is only a fraction of the overall education spending in the State.
When it comes to subsidizing undergraduate (and graduate) tuition to state colleges, once again, I'm not sure that Wisconsin is getting the best ROI. For the just finishing academic year, UW ranks as second lowest for in state undergraduate tuition.
http://apa.wisc.edu/images/tables/BigTentuition.pdf
Northwestern isn't included because it is private, but is undoubtedly highest for undergraduate tuition (but out of state undergrad is probably competitive).
According to those numbers, UW charges $2500 per year less than average. In other terms, the average Big Ten tuition is 33% higher than UW's. Assuming that there are 36,000 undergrads, and 2/3 of these undergrads are in-state (complete speculation), UW requires $60M (24,000 undergrads X $2500) more tax money to operate with this in state tuition subsidy than the average Big Ten school. This only counts UW-Madison - the University of Wisconsin System has a total enrollment of 175,000.
http://www.wisconsin.edu/news/2009/r090316.htm
Of course, some of these enrollments are out of state or part time, and not all University System schools have the same type of subsidy as UW-Madison, but I think that some form of subsidy can be assumed. Along the same lines, UW's out of state tuition is 3rd lowest in the Big Ten and similarly is $2000 lower than the Big Ten average. This could go either way, in that a lower out of state tuition, may help in gaining more out of state undergrads, thereby increasing the tuition dollars for the same number of enrolled students.
As an aside, the large difference between in-state and out of state, creates an incentive for the state schools to adopt admission policies that favor increased enrollment by out of state students, thereby countering State initiatives to increase the education level of state residents.
Now, in-state tuition is a great benefit to in-state students, I myself benefited from in-state tuition and I can't deny the additional freedom that having a comparatively low student loan debt burden is. But once again, my low debt burden in theory makes me more mobile, and therefore more likely to move out of the state.
The attainment of higher education does increase your mobility away from where you grew up. The key is to make the state more attractive to highly educated people, the industries that employ them, and the entrepreneurial climate that allows business creation and growth.
In one quick example:
That same $60M subsidy to in-state undergraduates, could instead fund a lot of economic development. A $60M yearly angel investment fund for start-up companies would have much more impact on the state economy, making it a more attractive place for grads of higher education to work (UW or from out of state), thus giving UW grads an incentive to stay, as well as creating an incentive for an educated workforce to migrate into Wisconsin, the cheapest way to a highly educated populace.
Thursday, May 7, 2009
Milwaukee River Central Park
A group called Milwaukee River Keepers has spearheaded efforts to formalize and protect the corridor of the Milwaukee River from North Avenue to Silver Spring Drive.
Here is their original Vision Paper, I think from 2007:
http://www.protectmilwaukeeriver.org/mrwg-vision.pdf
The River Keepers propose 7 specific goals for protecting the River.
1. Permanently protect existing natural areas along the Milwaukee River primary environmental corridor.
2. Protect the “viewshed” of the greenway
corridor so that persons enjoying the river
or engaging in activities will have a natural experience.
3. Establish building setbacks and design
guidelines for new multi-lot construction
within a buffer zone.
4. Establish enhanced guidelines to control
erosion and runoff entering the river.
5. Preserve and enhance native vegetation, fisheries and wildlife habitat along the river corridor.
6. Encourage land uses and activities that maintain a natural greenway corridor without altering present uses.
7. Create a Milwaukee River Central Park Trust Fund to finance land and water stewardship into the future.
As I live in the Cambridge Woods Neighborhood along the Milwaukee River, I have been following this as it develops. I have to admit that the proximity to the River, Cambridge Woods Park, and the Oak Leaf Bike Trail all contributed to the reasons why we chose our house. I agree that it is a tremendous asset and really combines provides something that distinguishes Milwaukee from many of its regional competitors in terms of quality of life.
I've written about the Milwaukee River previously under the "Estabrook Dam" Thread as well as here:
http://www.iofthenorth.com/2008/10/milwaukee-river.html
However, I have two problems with the efforts of Milwaukee River Keepers. The first one is #2 on their list above. They want to "protect the viewshed" from the river valley. This basically means zoning height restrictions on properties outside of the protected river area. I have two main issues with this, first the "viewshed" has no environmental purpose. It doesn't make the water cleaner, the trails better, the wildlife more diverse. It only restricts building heights on locations outside of the river corridor. Along with this, having spent a fair amount of time in this park area, there are very few locations, if any, where you can't see sign of development. Frankly, its part of what I think makes the area interesting. There are old dams, and dock pilings from when the river was used for swimming schools in the summer and ice harvesting in the winter. The major, now paved, recreation trails are on the old railroad beds that serviced these industries. Its a reflection of what makes this park an asset to Milwaukee, its location right in the middle of the built environment and is a testament to the rejuvinational powers of nature to transform former industrial land into a park that people want to once more use for recreation. To restrict building heights because they may be seen from the park is to deny the very location of the park itself.
Secondly, I get the overarching opinion from MRK that they want the area to be a public park, only to be enjoyed by those who already use it. Restrictions such as "viewshed" protection deny other people's ability to use the park in different ways than MRK members use the park. Some people can't enjoy a "natural" park due to health, age, mobility, whatever reasons, but that doesn't mean that they can't enjoy the view of said park. The MRK member view that is free of buildings is no more important than the ability of another to view the park from the outside.
In a built, city environment, height = density. If money and efforts are going to be expended to make the Milwaukee River Corridor the asset that it could be for the City, people need to be able to enjoy it, that means more people than currently use it. If you can't build densly around this developing asset, then the City will not see the return on its investment.
I recall a seeing a study from a few years ago with recommendations as to how the new park should be used and developed. Unfortunately, I cannot currently find a link. The conclusion of the study was that the only development in the park should be natural development. Another part of the study was opposed to formalizing the mountain bike path because "interest in this sport will continue to decline as the population ages and the younger generation continues its sedentary lifestyle" - that's not research, that's old hippies wanting the public to pay to keep a huge natural asset just as it is for their personal enjoyment, rather than leveraging it into something that can help drive population growth and economic development.
Additionally, MRK is against the development of more access points across the River and down to the river, including a marsupial bridge at Locust Street. Once again, MRK is using "protection of nature" as a sword to restrict people's access to this new public park. They cite crime, garbage, and safety as reasons for concern. But currently there is only one at-river crossing - Below North Ave. You can't even walk a loop around the park without climbing back out of the River Corridor, to cross at one of the major E-W streets.
Furthermore, if there is any group that could benefit from improved access to this park, it would be populations West of the River, that may not have access to other "natural" areas. I can hop in my car and drive to Northern Wisconsin, so can the MRK members, a lot of people in the city cannot.
For these reasons, I cannot fully support the efforts of Milwaukee River Keepers, because they are moving forward with a narrow view of what a park is in a way that will ultimately be harmful to the region, and my own neighborhood.
The Milwaukee City Counsel must vote on any zoning changes associated with the Milwaukee River Corridor in May 2009. This next month the City will make important decisions as to whether the natural asset of the Milwaukee River will be leveraged to improve the quality of life in the city and promote economic development, or whether we will just use public money so a few old people can enjoy their own huge park in the city.
I'm not alone locally in thinking that this is a problem.
http://urbanmilwaukee.com/2008/12/23/protecting-the-milwaukee-river-or-overreaching-zoning/
If you have an opinion regarding this, I suggest that you take the River Keeper Survey:
http://www.protectmilwaukeeriver.org/survey1.html
Feel free to send them comments too, although the survey says:
"If you agree... please weigh in."
Here is their original Vision Paper, I think from 2007:
http://www.protectmilwaukeeriver.org/mrwg-vision.pdf
The River Keepers propose 7 specific goals for protecting the River.
1. Permanently protect existing natural areas along the Milwaukee River primary environmental corridor.
2. Protect the “viewshed” of the greenway
corridor so that persons enjoying the river
or engaging in activities will have a natural experience.
3. Establish building setbacks and design
guidelines for new multi-lot construction
within a buffer zone.
4. Establish enhanced guidelines to control
erosion and runoff entering the river.
5. Preserve and enhance native vegetation, fisheries and wildlife habitat along the river corridor.
6. Encourage land uses and activities that maintain a natural greenway corridor without altering present uses.
7. Create a Milwaukee River Central Park Trust Fund to finance land and water stewardship into the future.
As I live in the Cambridge Woods Neighborhood along the Milwaukee River, I have been following this as it develops. I have to admit that the proximity to the River, Cambridge Woods Park, and the Oak Leaf Bike Trail all contributed to the reasons why we chose our house. I agree that it is a tremendous asset and really combines provides something that distinguishes Milwaukee from many of its regional competitors in terms of quality of life.
I've written about the Milwaukee River previously under the "Estabrook Dam" Thread as well as here:
http://www.iofthenorth.com/2008/10/milwaukee-river.html
However, I have two problems with the efforts of Milwaukee River Keepers. The first one is #2 on their list above. They want to "protect the viewshed" from the river valley. This basically means zoning height restrictions on properties outside of the protected river area. I have two main issues with this, first the "viewshed" has no environmental purpose. It doesn't make the water cleaner, the trails better, the wildlife more diverse. It only restricts building heights on locations outside of the river corridor. Along with this, having spent a fair amount of time in this park area, there are very few locations, if any, where you can't see sign of development. Frankly, its part of what I think makes the area interesting. There are old dams, and dock pilings from when the river was used for swimming schools in the summer and ice harvesting in the winter. The major, now paved, recreation trails are on the old railroad beds that serviced these industries. Its a reflection of what makes this park an asset to Milwaukee, its location right in the middle of the built environment and is a testament to the rejuvinational powers of nature to transform former industrial land into a park that people want to once more use for recreation. To restrict building heights because they may be seen from the park is to deny the very location of the park itself.
Secondly, I get the overarching opinion from MRK that they want the area to be a public park, only to be enjoyed by those who already use it. Restrictions such as "viewshed" protection deny other people's ability to use the park in different ways than MRK members use the park. Some people can't enjoy a "natural" park due to health, age, mobility, whatever reasons, but that doesn't mean that they can't enjoy the view of said park. The MRK member view that is free of buildings is no more important than the ability of another to view the park from the outside.
In a built, city environment, height = density. If money and efforts are going to be expended to make the Milwaukee River Corridor the asset that it could be for the City, people need to be able to enjoy it, that means more people than currently use it. If you can't build densly around this developing asset, then the City will not see the return on its investment.
I recall a seeing a study from a few years ago with recommendations as to how the new park should be used and developed. Unfortunately, I cannot currently find a link. The conclusion of the study was that the only development in the park should be natural development. Another part of the study was opposed to formalizing the mountain bike path because "interest in this sport will continue to decline as the population ages and the younger generation continues its sedentary lifestyle" - that's not research, that's old hippies wanting the public to pay to keep a huge natural asset just as it is for their personal enjoyment, rather than leveraging it into something that can help drive population growth and economic development.
Additionally, MRK is against the development of more access points across the River and down to the river, including a marsupial bridge at Locust Street. Once again, MRK is using "protection of nature" as a sword to restrict people's access to this new public park. They cite crime, garbage, and safety as reasons for concern. But currently there is only one at-river crossing - Below North Ave. You can't even walk a loop around the park without climbing back out of the River Corridor, to cross at one of the major E-W streets.
Furthermore, if there is any group that could benefit from improved access to this park, it would be populations West of the River, that may not have access to other "natural" areas. I can hop in my car and drive to Northern Wisconsin, so can the MRK members, a lot of people in the city cannot.
For these reasons, I cannot fully support the efforts of Milwaukee River Keepers, because they are moving forward with a narrow view of what a park is in a way that will ultimately be harmful to the region, and my own neighborhood.
The Milwaukee City Counsel must vote on any zoning changes associated with the Milwaukee River Corridor in May 2009. This next month the City will make important decisions as to whether the natural asset of the Milwaukee River will be leveraged to improve the quality of life in the city and promote economic development, or whether we will just use public money so a few old people can enjoy their own huge park in the city.
I'm not alone locally in thinking that this is a problem.
http://urbanmilwaukee.com/2008/12/23/protecting-the-milwaukee-river-or-overreaching-zoning/
If you have an opinion regarding this, I suggest that you take the River Keeper Survey:
http://www.protectmilwaukeeriver.org/survey1.html
Feel free to send them comments too, although the survey says:
"If you agree... please weigh in."
Wednesday, May 6, 2009
Paul Ryan's "Alternative Budget"
Rep. Paul Ryan (R - Wis.) is the ranking Republican on the House Budget Committee. He has introduced his "alternative" budget in competition to the one requested by the President. Now this budget (along with the president's) doesn't have much meaning as the actual budget is generally hammered out through the appropriations bills that will be passed over the coming year.
His WSJ op ed from introducing the budget is here:
The GOP's Alternative Budget: President Obama offers us the option of European big government
http://online.wsj.com/article/SB123854083982575457.html
A summary of the proposed budget is here:
http://www.house.gov/budget_republicans/press/2007/pr20090401_gopbudget.pdf
A brief review of Rep. Ryan's plan includes the following main points
1) Capping spending to a set % of GDP (specifically 18.3% - which I think comes from some study that found this to be an optimal balance for economic development)
2) Reforming Social Security/Medicare
3)Increasing Domestic Oil, NG, and Coal production, but earmarking the funds from those leases for research and building of wind, nuclear, and other non-fossil fuel energy
4) Simplifying the Tax code to have three brackets 0% (personal and standard deductions) <$15,000, 10% <$50,000, everything else %25. (double for married) Reducing the corporate tax rate from 35% to 25%.
A lot of this is a watered down version of Ryan's "Roadmap for America" that he put out a year ago.
http://www.house.gov/budget_republicans/....ntirereport.pdf
Frankly, the "Roadmap" was much more interesting proposing things such as eliminating the income tax completely in favor of a European style VAT.
-But I suppose that wouldn't have meshed well with his WSJ subtitle.
It will be interesting to see if any of these ideas take hold, and become parts of a new Republican fiscal policy.
Ryan's budget plan is an extension of the recently released "Republican Road to Recovery" plan.
http://www.gop.gov/solutions/budget/road-to-recovery-final
This budget plan has received a fair amount of criticism and even comparisons to "underpants gnomes" for its lack of explanation of how these goals will be accomplished.
http://en.wikipedia.org/wiki/Underpants_gnomes
http://business.theatlantic.com/2009/04/paul_ryans_crazy_budget_graph.php
I can never figure out why people resort to hyperbole or misinformation to make their points. If the situation is as bad as you claim it to be, then just use the actual numbers that you know. Its looking more like Ryan has cost himself some credibility by making his projections out 60 years.
Now to be fair to Ryan, I think that his basis for the "Democratic Budgets*" is projected escalation of Social Security and Medicare spending. These are real potential costs and something that must be corrected, but the graph is really a reflection of the pending problems with our Social Security/Medicare system rather than a reflection of specific budget decisions by D's or R's.
Personally, I like the proposed cap to spending tied to GDP. If the budget process involved defining specific number and dividing that number amongst each budgetary concern, it would be more understandable to the public and a more straightforward debate. Rather, each budget is [seemingly] negotiated in a vacuum, and it doesn't really matter if you trim a billion from the education bill if you add an extra billion to the ag bill, rather divide up the baby upfront and determine what can be done with it later.
I'm not really with Ryan on his Energy policy proposal. I'm all for increasing domestic oil production if it is economically feasible, I'm not for selling oil leases that aren't going to be tapped for decades at a loss just to get them sold. Furthermore, "Energy Independence" is one of the worst public policy tag lines of the last decade (along with "brain drain"). Rather, as a matter of national security we need to keep buying cheap oil from the Middle East and buying up Chavez's sour reserves.
Others have picked up on the wider implications of increased US Spending as a % of GDP.
http://network.nationalpost.com/np/blogs....pportunity.aspx
Ouch. That hurts coming from a Canadian.
But serves once again as a reminder that nothing requires the US to stay on top of the heap, and if we don't take action to resolve our budget problems, more and more countries will gain a competitive advantage.
His WSJ op ed from introducing the budget is here:
The GOP's Alternative Budget: President Obama offers us the option of European big government
http://online.wsj.com/article/SB123854083982575457.html
A summary of the proposed budget is here:
http://www.house.gov/budget_republicans/press/2007/pr20090401_gopbudget.pdf
A brief review of Rep. Ryan's plan includes the following main points
1) Capping spending to a set % of GDP (specifically 18.3% - which I think comes from some study that found this to be an optimal balance for economic development)
2) Reforming Social Security/Medicare
3)Increasing Domestic Oil, NG, and Coal production, but earmarking the funds from those leases for research and building of wind, nuclear, and other non-fossil fuel energy
4) Simplifying the Tax code to have three brackets 0% (personal and standard deductions) <$15,000, 10% <$50,000, everything else %25. (double for married) Reducing the corporate tax rate from 35% to 25%.
A lot of this is a watered down version of Ryan's "Roadmap for America" that he put out a year ago.
http://www.house.gov/budget_republicans/....ntirereport.pdf
Frankly, the "Roadmap" was much more interesting proposing things such as eliminating the income tax completely in favor of a European style VAT.
-But I suppose that wouldn't have meshed well with his WSJ subtitle.
It will be interesting to see if any of these ideas take hold, and become parts of a new Republican fiscal policy.
Ryan's budget plan is an extension of the recently released "Republican Road to Recovery" plan.
http://www.gop.gov/solutions/budget/road-to-recovery-final
This budget plan has received a fair amount of criticism and even comparisons to "underpants gnomes" for its lack of explanation of how these goals will be accomplished.
http://en.wikipedia.org/wiki/Underpants_gnomes
http://business.theatlantic.com/2009/04/paul_ryans_crazy_budget_graph.php
I can never figure out why people resort to hyperbole or misinformation to make their points. If the situation is as bad as you claim it to be, then just use the actual numbers that you know. Its looking more like Ryan has cost himself some credibility by making his projections out 60 years.
Now to be fair to Ryan, I think that his basis for the "Democratic Budgets*" is projected escalation of Social Security and Medicare spending. These are real potential costs and something that must be corrected, but the graph is really a reflection of the pending problems with our Social Security/Medicare system rather than a reflection of specific budget decisions by D's or R's.
Personally, I like the proposed cap to spending tied to GDP. If the budget process involved defining specific number and dividing that number amongst each budgetary concern, it would be more understandable to the public and a more straightforward debate. Rather, each budget is [seemingly] negotiated in a vacuum, and it doesn't really matter if you trim a billion from the education bill if you add an extra billion to the ag bill, rather divide up the baby upfront and determine what can be done with it later.
I'm not really with Ryan on his Energy policy proposal. I'm all for increasing domestic oil production if it is economically feasible, I'm not for selling oil leases that aren't going to be tapped for decades at a loss just to get them sold. Furthermore, "Energy Independence" is one of the worst public policy tag lines of the last decade (along with "brain drain"). Rather, as a matter of national security we need to keep buying cheap oil from the Middle East and buying up Chavez's sour reserves.
Others have picked up on the wider implications of increased US Spending as a % of GDP.
http://network.nationalpost.com/np/blogs....pportunity.aspx
Ouch. That hurts coming from a Canadian.
But serves once again as a reminder that nothing requires the US to stay on top of the heap, and if we don't take action to resolve our budget problems, more and more countries will gain a competitive advantage.
Thursday, April 30, 2009
"Brain Drain" vs "Net Migration"
"Brain Drain" is a plague of a political catch phrase. It leads to ill conceived public policy resulting in wasted efforts without incremental improvement.
The problem with "Brain Drain" is that it is very expensive to educate someone. This costs both private resources as we are reminded every month when we write our student loan checks as well as public funds that subsidized what we outlayed out of pocket. All of this comes with the eventual price that an individual becomes more mobile with more education. Therefore, the more that Wisconsin spends on educating people, the more likely they are to be able to take advantage of opportunities outside of Wisconsin, the more that the United States spends on education, the more likely they are able to take advantage of opportunities outside of our borders.
Now, there are lots of advantages that locally come from investment in education as well, undoubtedly some percentage (and probably a significant one) do stay to take advantage of local opportunities. However, programs aimed at retaining people locally after graduation from the local university, or aimed at increasing local enrollment in local public universities are misguided efforts as if any of these people become the type of high level talent that drives economic development, the same migration opportunities open up to them as well.
Rather, the focus should be on net migration of educated population, and more specifically high-level educated talent. The efforts should be made to create the employment and business opportunities for people to migrate here after being educated elsewhere to now seek their economic fortunes. These people were much cheaper to educate because their educations weren't locally subsidized and they introduce new thoughts, culture, and ideas that may not have been cultivated at Local U.
As an example Local U may be a great university, it may even have national or world renowned programs. To eliminate the "Brain Drain" from Local U grads leaving the state, the State government could spend public dollars to guaranty a job to every graduate of Local U by subsidizing companies that hire a Local U grads. However, the elite of Local U grads can already get jobs anywhere they want and State government's actions supress Elite grad's pay because the applicant pool is so deep with Local U grads.
Furthermore, State government's actions suppress the pay for non-Local U grads, decreasing the incentive for in-migration of talent educated at Far Away University. Elite grad wants to start a business to operate in the innovative way envisioned by Elite grad. However, because Elite grad's business wants the top people it can attract, it wants to hire the best from Local U's best programs and the best from Far Away U's best programs. Because Elite Grad wants the best access to the best talent, Elite Grad moves out of the state to create a new company.
Now this was a very convoluted example and a pretty extreme one at that. But my point is that efforts to maximize local population and the specific retention of all of those grads, may marginally improve educated out-migration, but harms educated in-migration. As educated in-migration is a much cheaper work force (costing fewer public subsidies), at the very least state programs shouldn't make it harder for this in-migration to happen.
I am also suggesting that rather than broad, unspecified retention programs, public dollars are better spend creating the resources for the Elite Grads of a program to create their economic development here through collaborative offices integrated with the universities such that Elite Grad is able to transition from Local U to the Local Economy.
The Urbanophile recently (and much more articulately) expressed similar thoughts:
http://theurbanophile.blogspot.com/2009/04/detroit-out-migration-devastates.html
Michigan seems to be at the epicenter of many of these discussions, as it is sporting the trifecta of net out migration, job losses, and housing destabilization.
However, it should be noted that Detroit had less gross out-migration last year than Chicago, but Chicago had more than enough gross in-migration to compensate for those losses and then some.
It becomes a case of chicken or the egg, do you improve conditions to attract more people, or do you attract more people to improve conditions?
While Wisconsin's diploma privilege creates a huge incentive for its grads to stay in the state, does this Draconian approach actually harm the quality and growth of the legal profession in Wisconsin because the state is saturated with lawyers from only two law schools. What is the incentive for a grad of a better law school than Marquette and Wisconsin (30 some law schools out there) to practice in Wisconsin? In theory, wages are somewhat suppressed because of the saturation of lawyers willing to stay in the state.
However, this may have the unintended (but good) effect of allowing law firms here to offer more competitive rates compared nationally, assuming that there is a suppressive effect on associate wages, partners can still make the same amount of profit on lower billable rates. Clients in turn see lower billable rates and become willing to direct their legal work here.
Along those lines, I have always thought that professional services such as lawyers, financial advising, accounting could be a growth industry for the Midwest, as they are becoming more easily practiced remotely and offer lower billable rates than on the coasts.
The problem with "Brain Drain" is that it is very expensive to educate someone. This costs both private resources as we are reminded every month when we write our student loan checks as well as public funds that subsidized what we outlayed out of pocket. All of this comes with the eventual price that an individual becomes more mobile with more education. Therefore, the more that Wisconsin spends on educating people, the more likely they are to be able to take advantage of opportunities outside of Wisconsin, the more that the United States spends on education, the more likely they are able to take advantage of opportunities outside of our borders.
Now, there are lots of advantages that locally come from investment in education as well, undoubtedly some percentage (and probably a significant one) do stay to take advantage of local opportunities. However, programs aimed at retaining people locally after graduation from the local university, or aimed at increasing local enrollment in local public universities are misguided efforts as if any of these people become the type of high level talent that drives economic development, the same migration opportunities open up to them as well.
Rather, the focus should be on net migration of educated population, and more specifically high-level educated talent. The efforts should be made to create the employment and business opportunities for people to migrate here after being educated elsewhere to now seek their economic fortunes. These people were much cheaper to educate because their educations weren't locally subsidized and they introduce new thoughts, culture, and ideas that may not have been cultivated at Local U.
As an example Local U may be a great university, it may even have national or world renowned programs. To eliminate the "Brain Drain" from Local U grads leaving the state, the State government could spend public dollars to guaranty a job to every graduate of Local U by subsidizing companies that hire a Local U grads. However, the elite of Local U grads can already get jobs anywhere they want and State government's actions supress Elite grad's pay because the applicant pool is so deep with Local U grads.
Furthermore, State government's actions suppress the pay for non-Local U grads, decreasing the incentive for in-migration of talent educated at Far Away University. Elite grad wants to start a business to operate in the innovative way envisioned by Elite grad. However, because Elite grad's business wants the top people it can attract, it wants to hire the best from Local U's best programs and the best from Far Away U's best programs. Because Elite Grad wants the best access to the best talent, Elite Grad moves out of the state to create a new company.
Now this was a very convoluted example and a pretty extreme one at that. But my point is that efforts to maximize local population and the specific retention of all of those grads, may marginally improve educated out-migration, but harms educated in-migration. As educated in-migration is a much cheaper work force (costing fewer public subsidies), at the very least state programs shouldn't make it harder for this in-migration to happen.
I am also suggesting that rather than broad, unspecified retention programs, public dollars are better spend creating the resources for the Elite Grads of a program to create their economic development here through collaborative offices integrated with the universities such that Elite Grad is able to transition from Local U to the Local Economy.
The Urbanophile recently (and much more articulately) expressed similar thoughts:
http://theurbanophile.blogspot.com/2009/04/detroit-out-migration-devastates.html
Michigan seems to be at the epicenter of many of these discussions, as it is sporting the trifecta of net out migration, job losses, and housing destabilization.
However, it should be noted that Detroit had less gross out-migration last year than Chicago, but Chicago had more than enough gross in-migration to compensate for those losses and then some.
It becomes a case of chicken or the egg, do you improve conditions to attract more people, or do you attract more people to improve conditions?
While Wisconsin's diploma privilege creates a huge incentive for its grads to stay in the state, does this Draconian approach actually harm the quality and growth of the legal profession in Wisconsin because the state is saturated with lawyers from only two law schools. What is the incentive for a grad of a better law school than Marquette and Wisconsin (30 some law schools out there) to practice in Wisconsin? In theory, wages are somewhat suppressed because of the saturation of lawyers willing to stay in the state.
However, this may have the unintended (but good) effect of allowing law firms here to offer more competitive rates compared nationally, assuming that there is a suppressive effect on associate wages, partners can still make the same amount of profit on lower billable rates. Clients in turn see lower billable rates and become willing to direct their legal work here.
Along those lines, I have always thought that professional services such as lawyers, financial advising, accounting could be a growth industry for the Midwest, as they are becoming more easily practiced remotely and offer lower billable rates than on the coasts.
Wednesday, April 29, 2009
Federal Government ROTing our Country
I found a chart (albeit from 2005) that listed federal expenditures per state based on the amount of federal taxes paid by that state. I used this to produce a Return of Federal Dollars index. I'll call it ROT for Return on Taxes.
http://www.nemw.org/taxburd.htm
An examination of the ROT index identified that certain states were "givers" taking in less federal money than it paid in taxes while other states were "receivers," taking in more federal money that they put in. There were 17 total "giving" states, in order of ROT:
New Jersey .65
Nevada .67
Connecticut .73
Minnesota .73
New Hampshire .75
Illinois .78
Delaware .80
California .80
New York .82
Colorado .83
Massachusetts .85
Wisconsin .88
Washington .89
Michigan .94
Oregon .93
Florida .95
Texas .97
I'll compare this to the top 17 "receiving states"
Mississippi 2.02
New Mexico 2.00
Louisiana 1.85
Alaska 1.83
West Virginia 1.75
North Dakota 1.65
Alabama 1.63
Kentucky 1.51
Virginia 1.51
South Dakota 1.48
Hawaii 1.43
Montana 1.43
Maine 1.41
Arkansas 1.40
Oklahoma 1.35
South Carolina 1.35
Missouri 1.32
When the states are grouped by geographical region:
Northeast .89
Midwest .91
South 1.19
West .95
In all, the South as a region received an additional $120B in federal spending than it contributed through taxes. Therefore, on a per-capita basis, the Federal Government is undergoing a massive redistribution of wealth from the rest of the country into the South.
http://www.nemw.org/taxburd.htm
An examination of the ROT index identified that certain states were "givers" taking in less federal money than it paid in taxes while other states were "receivers," taking in more federal money that they put in. There were 17 total "giving" states, in order of ROT:
New Jersey .65
Nevada .67
Connecticut .73
Minnesota .73
New Hampshire .75
Illinois .78
Delaware .80
California .80
New York .82
Colorado .83
Massachusetts .85
Wisconsin .88
Washington .89
Michigan .94
Oregon .93
Florida .95
Texas .97
I'll compare this to the top 17 "receiving states"
Mississippi 2.02
New Mexico 2.00
Louisiana 1.85
Alaska 1.83
West Virginia 1.75
North Dakota 1.65
Alabama 1.63
Kentucky 1.51
Virginia 1.51
South Dakota 1.48
Hawaii 1.43
Montana 1.43
Maine 1.41
Arkansas 1.40
Oklahoma 1.35
South Carolina 1.35
Missouri 1.32
When the states are grouped by geographical region:
Northeast .89
Midwest .91
South 1.19
West .95
In all, the South as a region received an additional $120B in federal spending than it contributed through taxes. Therefore, on a per-capita basis, the Federal Government is undergoing a massive redistribution of wealth from the rest of the country into the South.
| Alternatively, we can look at the generic political makeup of the states on the "giving" list versus the "receiving" list. The "giving" list is made up of predominantly Democratic leaning states (exceptions: Nevada, Florida - Purple; Texas - Republican) while the "receiving" list is made up of predominantly Republican leaning states (exeption: New Mexico, Virginia - Purple; Maine - Democratic). Now to draw more accurate conclusions, I would need to compare a few years of data to evaluate if this was based upon the Republican control of government in 2005, or if there is something more structural regarding this wealth transfer. However, the strength of the line drawn between the recent political leanings of a state and its share of government money is compelling. If the size and expense of government is a defining difference between D and R politics (I know a lot of people would disagree that there is any distinction in this matter between the two, but go with me for a second), the political leaning of the states may actually reflect this, whereby the "giving" states see comparatively less federal government investment than they pay for and therefore have the belief that the federal government is not doing enough, while the "receiving" states see the generous returns of federal money into their states and feel that the government spending should be reined in. | ||||||||
| Two possible sources of the additional money may be federal highway and agricultural subsidies. Typically, our largest states are also our least populated, or at least have the lowest population densities and have large agricultural systems. With our ever expanding federal highway system, it simply costs more per person for federal highway construction and maintenance in large states than in small states. The government spends a lot on agricultural subsidies and as agriculture requires land, it is reasonable to assume that these tend to be correlated to land area, rather than population. I couldn't find any statistics, but this article seems to support the federal highway system theory. http://www.redorbit.com/news/technology/....for/index .html At least it supports the idea that California, New York, and Texas received less per capita (all listed as "givers") in federal highway funds than Alaska, Wyoming, Montana, North and South Dakota and Vermont. (Alaska, Montana, North and South Dakota are all in the "biggest receivers" category). However, Federal Highway expenditures are funded through the separate $0.184/gal. Federal Gas Tax. However, assuming that the highest population states are going to buy the most gallons of gas, States' returns on federal gas tax should be similar to the returns on income tax. |
Tuesday, April 28, 2009
Milwaukee Designated UN Water Technology Hub
http://www.jsonline.com/business/43835922.html
JS Online is reporting that Milwaukee will be the 13th city to be designated a UN Global Compact City. The UN Global Compact City Program is directed to promoting and facilitating the research and development of techniques and technologies that address the large scale problems faced by the world's urban areas. Each city is designated as a research center for for a particular problem. Milwaukee's designation is Water Technology and the treatment of drinking water.
While the Global Compact City program will allow researchers and companies in Milwaukee greater access to resources and promote worldwide connections in other Global Compact Cities, perhaps the biggest impact of this program is the worldwide recognition of Milwaukee as a center of freshwater technology. This plays into the Milwaukee Water Counsel's efforts to brand/market Milwaukee as such a place, but this type of outside recognition is much more valuable than marketing coming from within Milwaukee.
Milwaukee joins the 12 other current Global Compact Cities:
San Francisco, USA - Climate Change
Puerto Alegre, Brazil - Housing
Berlin, Germany - Healthcare
La Havre, France - Sustainable Tourism
Asker, Norway - Corruption
Plock, Poland - Climate Change
As-Salt, Jordan - The Environmental Street Project
Tshwane, South Africa - Rosyln Strategic Development Program
Ulan Bator, Mongolia - Urban Development
Jinan, China - Reducing Traffic Fatalities
Jamshedpur, India - Industrial Sewage Treament
Melbourne, Australia - Sustainable Urban Development
Projects pledged in Milwaukee's application include:
• Studying aquaculture to breed edible fish on the assumption that seafood offers cheaper animal protein than livestock.
• Doing research to reduce algae in Lake Michigan and use algae as a biofuel.
• Disinfecting storm-water runoff and desalination of winter road salt.
• Seeking new efficiencies in wastewater treatment.
• Removing radium from groundwater, advancing a pilot project that began last year in Waukesha.
JS Online is reporting that Milwaukee will be the 13th city to be designated a UN Global Compact City. The UN Global Compact City Program is directed to promoting and facilitating the research and development of techniques and technologies that address the large scale problems faced by the world's urban areas. Each city is designated as a research center for for a particular problem. Milwaukee's designation is Water Technology and the treatment of drinking water.
While the Global Compact City program will allow researchers and companies in Milwaukee greater access to resources and promote worldwide connections in other Global Compact Cities, perhaps the biggest impact of this program is the worldwide recognition of Milwaukee as a center of freshwater technology. This plays into the Milwaukee Water Counsel's efforts to brand/market Milwaukee as such a place, but this type of outside recognition is much more valuable than marketing coming from within Milwaukee.
Milwaukee joins the 12 other current Global Compact Cities:
San Francisco, USA - Climate Change
Puerto Alegre, Brazil - Housing
Berlin, Germany - Healthcare
La Havre, France - Sustainable Tourism
Asker, Norway - Corruption
Plock, Poland - Climate Change
As-Salt, Jordan - The Environmental Street Project
Tshwane, South Africa - Rosyln Strategic Development Program
Ulan Bator, Mongolia - Urban Development
Jinan, China - Reducing Traffic Fatalities
Jamshedpur, India - Industrial Sewage Treament
Melbourne, Australia - Sustainable Urban Development
Projects pledged in Milwaukee's application include:
• Studying aquaculture to breed edible fish on the assumption that seafood offers cheaper animal protein than livestock.
• Doing research to reduce algae in Lake Michigan and use algae as a biofuel.
• Disinfecting storm-water runoff and desalination of winter road salt.
• Seeking new efficiencies in wastewater treatment.
• Removing radium from groundwater, advancing a pilot project that began last year in Waukesha.
Monday, April 20, 2009
Milwaukee Connector or (Trains v. BRT)
I will start out by saying that am skeptical to tepid regarding the use of a fixed rail system in Milwaukee Kenosha , and Rail connection to Madison
Despite all of the venom that comes forth from people when you discuss it, with respect to the decision between rail v. BRT v. Busses, it has always seemed like this is just a matter of vehicle selection and could be pretty easily identified with an economic study of the available vehicles/systems.
I am going to try to take a look at the proposed technology options, as well as how the proponents of such technology are trying to sell that theirs is the correct choice.
One of the problems, as noted by Renn ( http://theurbanophile.blogspot.com/2007/11/why-rail-transit-is-bad-idea-for.html ) is that rail proponents define the benefits of rail in terms of externalities - reduced pollution, Transit Oriented Development, "coolness"/image, rather than the merits of a rail based system itself.
This self-selection of benefits raises a flag, and to the minimal extent is a reflection of the much greater cost to implement a rail system versus other public transit system options. “Sure, you are paying more, but you are also getting TOD! and saving the Earth!” However, I don't subscribe to the Wal-Mart brand of government, and believe that if there is value, then the increased expenditure can be worthwhile.
This is where rail proponents have lost me. There has been little effort to explain what makes the increased investment in rail worthwhile over the other public transit options. Where is an analysis of maintenance/operational costs?, fuel costs?, train set operational lifetime?, are people willing to pay higher fares to ride a train? - are there advantages found in any of these areas?
With respect to the external factors given in support of rail, I would submit that any public transit meets whatever "environmental" goals are established, and I would venture that with proper design, a BRT system could be pretty d**n cool. The last point, TOD, may have an impact in favor of rail, but I feel that the present discussion of it hasn't been accurate thus far.
TOD (Transit Oriented Developent) recognizes that property values, and increased investment in residential/commercial development increases around new/improved transit stops. There seems to be a much higher correlation of this between rail transit, than is found with other forms of public transit (buses).
However, I think that the point that is overlooked is the infrastructural investment that is made. Generally any public infrastructural investment that is compatible with the surrounding area is going to improve demand and property value. This would be true for brownfield remediation, parks, riverwalks, transit, even public parking structures and commercial developments (see TIF's) therefore, TOD seems more to me to be a reflection of the heavy infrastructural investment in the area (transit only really benefits those areas with access points) rather than specifically tied to the transit itself. The transit (specifically rail transit) concentrates the economic benefit at specific locations, maximizing the return found at those locations.
One of the problems, as noted by Renn ( http://theurbanophile.blogspot.com/2007/11/why-rail-transit-is-bad-idea-for.html ) is that rail proponents define the benefits of rail in terms of externalities - reduced pollution, Transit Oriented Development, "coolness"/image, rather than the merits of a rail based system itself.
This self-selection of benefits raises a flag, and to the minimal extent is a reflection of the much greater cost to implement a rail system versus other public transit system options. “Sure, you are paying more, but you are also getting TOD! and saving the Earth!” However, I don't subscribe to the Wal-Mart brand of government, and believe that if there is value, then the increased expenditure can be worthwhile.
This is where rail proponents have lost me. There has been little effort to explain what makes the increased investment in rail worthwhile over the other public transit options. Where is an analysis of maintenance/operational costs?, fuel costs?, train set operational lifetime?, are people willing to pay higher fares to ride a train? - are there advantages found in any of these areas?
With respect to the external factors given in support of rail, I would submit that any public transit meets whatever "environmental" goals are established, and I would venture that with proper design, a BRT system could be pretty d**n cool. The last point, TOD, may have an impact in favor of rail, but I feel that the present discussion of it hasn't been accurate thus far.
TOD (Transit Oriented Developent) recognizes that property values, and increased investment in residential/commercial development increases around new/improved transit stops. There seems to be a much higher correlation of this between rail transit, than is found with other forms of public transit (buses).
However, I think that the point that is overlooked is the infrastructural investment that is made. Generally any public infrastructural investment that is compatible with the surrounding area is going to improve demand and property value. This would be true for brownfield remediation, parks, riverwalks, transit, even public parking structures and commercial developments (see TIF's) therefore, TOD seems more to me to be a reflection of the heavy infrastructural investment in the area (transit only really benefits those areas with access points) rather than specifically tied to the transit itself. The transit (specifically rail transit) concentrates the economic benefit at specific locations, maximizing the return found at those locations.
To expand this thought, Milwaukee has $100M to spend on public transit, if that $100M is used to make a rail route from downtown (Wisconsin/Water) to the East Side (North/Prospect) with a stop in the middle (Brady/Van Buren). That $100M investment is only useful to properties at those three intersections and I would guess exponentially decays the further away you get. I would guess that at 5+ blocks from the intersection there is minimal incremented value. So those three locations get, to use a legal concept, a 1/3 undivided interest in the $100M investment. This is a lot of incentive to develop at those three locations. On the other hand if you used $100M to buy the best bus system in the world for that same route, but it stopped every block along the way. You still get added value to the area, but it is distributed across the entire route, and so the development is more spread out and likely less aggregated.
This is one of the areas where I think that proponents of BRT have failed. We understand that it is cheaper, that part is implicit. However, BRT proponents have failed to address its advantages beyond costing less and being "flexible" in its routes. I think that the route "flexibility" argument isn't as strong as BRT proponents think it is. Any transit system design would reflect near-term growth projections, or its a poorly designed system. Additionally, the often touted statistic of BRT proponents that many of the current transit system routes have changed little in the last 100 years (cited as evidence of bus route permanence) inherently argues against the "flexibility" advantage.
Furthermore, many of the advantages of a new BRT system come with investments in improving infrastructure. Traffic signals that adjust to allow oncoming buses to pass are an infrastructure investment, improved bus shelters/sidewalk "bump-outs" that allow passengers to board buses at grade without the buses pulling over and "kneeling" are an infrastructure investment, improved ticket sales kiosks (there are currently none) and LED indicators of wait time for the next bus are infrastructure investments. These are many of the features that any transit system an attractive system to riders, and would be included in any BRT system. All of these are significant infrastructure investments that both discourage route "flexibility," but also reflect the infrastructure investments that allow for TOD over the current transit system.
Other infrastructure improvements for a BRT system, like dedicated lanes (or bus/bike lanes) on some route portions are further infrastructure investments that help to maximize the benefits of the BRT vehicle. Add design elements to all of these infrastructure improvements, and you would have a BRT system that rivals any train set in the "coolness" factor as well.
Even with all of these improvements, BRT is likely much less expensive than rail, so the cost factor is weighs in BRT's favor; however, by focusing on the "cheap" and "flexible" portions of the argument, BRT proponents sell themselves short in the potential benefits of BRT. The same “cheap” and “flexible” concepts could be presented and argued for more persuasively if they were couched as broader coverage, more service for the same price.
This is one of the areas where I think that proponents of BRT have failed. We understand that it is cheaper, that part is implicit. However, BRT proponents have failed to address its advantages beyond costing less and being "flexible" in its routes. I think that the route "flexibility" argument isn't as strong as BRT proponents think it is. Any transit system design would reflect near-term growth projections, or its a poorly designed system. Additionally, the often touted statistic of BRT proponents that many of the current transit system routes have changed little in the last 100 years (cited as evidence of bus route permanence) inherently argues against the "flexibility" advantage.
Furthermore, many of the advantages of a new BRT system come with investments in improving infrastructure. Traffic signals that adjust to allow oncoming buses to pass are an infrastructure investment, improved bus shelters/sidewalk "bump-outs" that allow passengers to board buses at grade without the buses pulling over and "kneeling" are an infrastructure investment, improved ticket sales kiosks (there are currently none) and LED indicators of wait time for the next bus are infrastructure investments. These are many of the features that any transit system an attractive system to riders, and would be included in any BRT system. All of these are significant infrastructure investments that both discourage route "flexibility," but also reflect the infrastructure investments that allow for TOD over the current transit system.
Other infrastructure improvements for a BRT system, like dedicated lanes (or bus/bike lanes) on some route portions are further infrastructure investments that help to maximize the benefits of the BRT vehicle. Add design elements to all of these infrastructure improvements, and you would have a BRT system that rivals any train set in the "coolness" factor as well.
Even with all of these improvements, BRT is likely much less expensive than rail, so the cost factor is weighs in BRT's favor; however, by focusing on the "cheap" and "flexible" portions of the argument, BRT proponents sell themselves short in the potential benefits of BRT. The same “cheap” and “flexible” concepts could be presented and argued for more persuasively if they were couched as broader coverage, more service for the same price.
However, there is a growing body of evidence that rail does attract higher levels of ridership than bus transit. This is an offshoot of the coolness/image factor. Friends attest to this from their personal experience and anecdotal evidence in Mpls. Looking to Mpls. rail infrastructure appears to have a shown a transformative power (TODs, people giving up cars, the middle classes choosing city neighborhoods as a place to invest) that is not nearly as realized by BRT precisely because of the coolness factor or the “flexibility” issue, perceived or otherwise. The rationale (at least on a gut level) is that once fixed rail is in, it's going to be maintained. The Hiawatha light rail corridor in Mpls has radically changed the equation for many in Southeast Mpls. Attorneys who would not be gung ho to ride the bus (BRT from the suburbs, maybe) make purchasing decisions to invest in homes in SE Mpls (Longfellow neighborhood, in particular), because the LRT drops them off a a couple blocks from work.
They not against a BRT component to Mke's transit system, but they feel that the denser, neighborhoods of Milwaukee (East Side, Third Ward to Bayview) are better served by rail and could be transformative. You want to seeWalker
They not against a BRT component to Mke's transit system, but they feel that the denser, neighborhoods of Milwaukee (East Side, Third Ward to Bayview) are better served by rail and could be transformative. You want to see
If we are looking at what might best serve current demand, and enhance that level of service, then BRT might perform admirably. Take an existing transit corridor, look and the ridership and trip times, provide a dramatically improved trip time and stronger connections, and shazam: the people who already ride the bus have found a dramatic improvement to their quality of life. Perhaps you'll even get some people who found the previous bus service too slow or unreliable to be relied upon will start using the BRT. Generally, this will be people that already live in the transit corridor. However, rail will actually attract different people to live on and near the route. Often a more affluent demographic, who would never consider making that purchase based upon a bus connection. That's what is meant by transformative.
Rail can transform a neighborhood and a route, by attracting a new ridership, a new demographic, and thereby changing neighborhoods (encouraging the middle class/creative classes that prefer that type of life style to invest in the city) vs. BRT which, I submit, simply is an enhancement to the service which already exists and, according to Scott Walker and the like, is there solely to serve the poor (those who can't afford a car).
Two reasons, two visions. Call me an elitist, but I think that the benefits of attracting the middle/creative classes to further invest in Mke and in order to make the city seem "cool" enough for UW grads and others to want to come an live in, investments in rail (not a circle) are very wise and will, in the long run, allow Mke to reap much greater benefits through growth and innovation (and corresponding tax revenues, be them sales or property) than incremental transit improvements in poor neighborhoods. However, ideally, I'd like to see both.
Rail can transform a neighborhood and a route, by attracting a new ridership, a new demographic, and thereby changing neighborhoods (encouraging the middle class/creative classes that prefer that type of life style to invest in the city) vs. BRT which, I submit, simply is an enhancement to the service which already exists and, according to Scott Walker and the like, is there solely to serve the poor (those who can't afford a car).
Two reasons, two visions. Call me an elitist, but I think that the benefits of attracting the middle/creative classes to further invest in Mke and in order to make the city seem "cool" enough for UW grads and others to want to come an live in, investments in rail (not a circle) are very wise and will, in the long run, allow Mke to reap much greater benefits through growth and innovation (and corresponding tax revenues, be them sales or property) than incremental transit improvements in poor neighborhoods. However, ideally, I'd like to see both.
I do have to admit that my perceptions are coming as someone who already uses the bus system 2-3 times a week and the proximity to a bus line was noted in the desirability of the location of our house. Therefore, as someone who is already a transit user, the efficiencies of an improved transit system that are the biggest factors in improving my ride and ride experience (traffic light priority, notification of "next bus" times, automated ticketing, smoother ride, more efficient boarding through bump outs and at grade doors) are all provided as what I consider to be infrastructural improvements.
And yes, there is a real "cool" factor, and as I wrote somewhere before, increasing transit riders is about gaining new ridership plain and simple. The new transit system has to be designed with an eye to attracting new riders. As strong as TOD has been, when you are starting/replacing with a new transit system, its not a matter of "build it and they will come" without having a plan of what route (vehicles, amenities, stops, route) is going to be targeted/attract what riders.
I agree with your skepticism of the downtown circle streetcar versus one new line connecting downtown (intermodal) to theEast Side . I would personally rather see a streetcar line that would extend to at least Shorewood, and more preferably, to Bayshore Mall. I feel that that route would get you the most bang for your buck, service the densest parts of the city. Connect current transit users to jobs, retail, and entertainment. Plus target some of the most easily convertable new transit riders. Why not go for the low hanging fruit?
And yes, there is a real "cool" factor, and as I wrote somewhere before, increasing transit riders is about gaining new ridership plain and simple. The new transit system has to be designed with an eye to attracting new riders. As strong as TOD has been, when you are starting/replacing with a new transit system, its not a matter of "build it and they will come" without having a plan of what route (vehicles, amenities, stops, route) is going to be targeted/attract what riders.
I agree with your skepticism of the downtown circle streetcar versus one new line connecting downtown (intermodal) to the
Wednesday, April 15, 2009
Tax Day Thoughts
Death and Taxes, right? Well, it seems that any solution to our country's looming fiscal problems (current economic downturn aside) will require not only rethinking government spending, but also government revenue collection.
I understand the benefits of our progressive income taxation system. It helps to balance the burdens of other flat, or regressive, taxation systems currently in place such as sales taxes and vehicle registration fees. Also, on a dollar for dollar basis, the those tax dollars paid, even in a smaller amount, cause more burden on those at the bottom of the pay scale as opposed to those at the top.
However, my biggest complaints regarding the tax code come from the sheer number of people who are now exempted from the tax code. Early estimated numbers for 2009 indicate that over 40% of the population will pay no or negative federal income taxes. Interestingly, a recent poll found that 56% of Americans thought that their taxes were too high. This means that basically everyone who paid taxes this year thought that they had to pay too much. In a setting where nearly half of the population is paying no or negative taxes, It is understandable that those that do pay taxes thought they were asked to pay too much.
With such a large segment of the population having no "skin in the game" of funding our federal government, how can their priorities be aligned with a fiscally responsible government? The federal government becomes one big entitlement program that much of the population doesn't have to pay for, but receives benefit from.
In that situation it is easy to support increased government spending - I'm not paying for it, but I get the benefit from it - why would you turn down something free?
Ari Fleischer, whom you can agree or disagree with his politics but can't deny his talents at spin, recently had similar comments in the WSJ.
http://online.wsj.com/article/SB123958260423012269.html
I would have preferred that he focused on effective tax burden of the bottom half of wage earners, rather than percentage of total federal revenue, as I think that those data are more reflective of the actual situation, since wage percentile isn't as important as actual income.
My other thought is against refundable tax credits. This seems like a very inefficient way of providing redistribution of wealth. First of all, assuming that we want a direct redistribution such as this (big if), it comes in the form of a single payment, rather than throughout the year when it can be integrated into someone's budget and it requires the completion of an overly complex 1040 income tax form. If the money is going to be distributed anyways, why not send it out like social security or reduce payroll taxes?
Second, combining with the first point, it is paying people to be a part of the country, without any restrictions on its use. The same dollar amounts directed into job training, primary education, health charity, or nutrition programs would serve a directed purpose and further a country wide goal of moving people into a situation where they no longer need these support services.
I understand the benefits of our progressive income taxation system. It helps to balance the burdens of other flat, or regressive, taxation systems currently in place such as sales taxes and vehicle registration fees. Also, on a dollar for dollar basis, the those tax dollars paid, even in a smaller amount, cause more burden on those at the bottom of the pay scale as opposed to those at the top.
However, my biggest complaints regarding the tax code come from the sheer number of people who are now exempted from the tax code. Early estimated numbers for 2009 indicate that over 40% of the population will pay no or negative federal income taxes. Interestingly, a recent poll found that 56% of Americans thought that their taxes were too high. This means that basically everyone who paid taxes this year thought that they had to pay too much. In a setting where nearly half of the population is paying no or negative taxes, It is understandable that those that do pay taxes thought they were asked to pay too much.
With such a large segment of the population having no "skin in the game" of funding our federal government, how can their priorities be aligned with a fiscally responsible government? The federal government becomes one big entitlement program that much of the population doesn't have to pay for, but receives benefit from.
In that situation it is easy to support increased government spending - I'm not paying for it, but I get the benefit from it - why would you turn down something free?
Ari Fleischer, whom you can agree or disagree with his politics but can't deny his talents at spin, recently had similar comments in the WSJ.
http://online.wsj.com/article/SB123958260423012269.html
I would have preferred that he focused on effective tax burden of the bottom half of wage earners, rather than percentage of total federal revenue, as I think that those data are more reflective of the actual situation, since wage percentile isn't as important as actual income.
My other thought is against refundable tax credits. This seems like a very inefficient way of providing redistribution of wealth. First of all, assuming that we want a direct redistribution such as this (big if), it comes in the form of a single payment, rather than throughout the year when it can be integrated into someone's budget and it requires the completion of an overly complex 1040 income tax form. If the money is going to be distributed anyways, why not send it out like social security or reduce payroll taxes?
Second, combining with the first point, it is paying people to be a part of the country, without any restrictions on its use. The same dollar amounts directed into job training, primary education, health charity, or nutrition programs would serve a directed purpose and further a country wide goal of moving people into a situation where they no longer need these support services.
Wednesday, March 25, 2009
H1-B Visas and "Stimulus"
Immigration is highly regulated by the federal government, not that you would know it from the headlines or your favorite cable news network.
One specific type of visa is the H1-B visa which is specifically available for "workers in short supply" meaning highly skilled technical employees that perform jobs that there are literally unable to be filled because there are not enough US citizen employees with the necessary high-tech skill sets. Often the foreign workers that fill these visas are in fact the products of our own US Universities.
However, the capped limit of these visas has not increased in years from its current level of 85,000. Applications for these visas are submitted every year on April 1st and are often filled within a matter of days.
But with the current downturn, lawmakers are easily succumbing to the urge to pass protectionist measures at every turn. One such measure limited any companies receiving TARP funds from applying for H1-B Visas.
Now the problem with this is that the highly skilled workers represented by the H1-B Visas perform the jobs that will pull us out of recession. For every highly skilled worker that a company employs, it generally employs multiple lower skilled employees as support. These aren't crap jobs either, these are lab technician, computer programming, grant writing, office management positions, intellectual property jobs.
But it goes beyond a strict calculus of jobs, H1-B Visa employees are also much more entrepreneurial than the average American worker. Therefore, after they have worked in these high tech positions and learned from their employers it is highly likely that they will spin off from their employer to create a new business venture. This is a function not of their nationality, but of their high level of education and specialized (and valuable) skill sets. Thus, with these workers, our country is importing economic development. This is the last import that we want to be restricting during a recession.
Now the current worldwide downturn has leveled some of the playing fields, the first worldwide economies to get going again will undoubtedly be working from a position of strength for possibly the next 50 years. At the same time that the US is shutting these valuable workers out, other countries, often their home countries, are developing the resources to put them to work elsewhere. The longer that the US pushes these workers away, not only do they forgo the economic development caused in the short term by these workers, but they undermine the US's position in the world of where the best and brightest want to be to seek their fortunes.
While in general, immigration restrictions should be opened up to more individuals, this specific type of immigration is far more necessary than our leaders seem to acknowledge.
Jeffery Joerres, CEO of Manpower, Inc. apparently agrees with me.
http://www.ft.com/cms/s/0/63c190a6-4f0b-....?nclick_check=1
One specific type of visa is the H1-B visa which is specifically available for "workers in short supply" meaning highly skilled technical employees that perform jobs that there are literally unable to be filled because there are not enough US citizen employees with the necessary high-tech skill sets. Often the foreign workers that fill these visas are in fact the products of our own US Universities.
However, the capped limit of these visas has not increased in years from its current level of 85,000. Applications for these visas are submitted every year on April 1st and are often filled within a matter of days.
But with the current downturn, lawmakers are easily succumbing to the urge to pass protectionist measures at every turn. One such measure limited any companies receiving TARP funds from applying for H1-B Visas.
Now the problem with this is that the highly skilled workers represented by the H1-B Visas perform the jobs that will pull us out of recession. For every highly skilled worker that a company employs, it generally employs multiple lower skilled employees as support. These aren't crap jobs either, these are lab technician, computer programming, grant writing, office management positions, intellectual property jobs.
But it goes beyond a strict calculus of jobs, H1-B Visa employees are also much more entrepreneurial than the average American worker. Therefore, after they have worked in these high tech positions and learned from their employers it is highly likely that they will spin off from their employer to create a new business venture. This is a function not of their nationality, but of their high level of education and specialized (and valuable) skill sets. Thus, with these workers, our country is importing economic development. This is the last import that we want to be restricting during a recession.
Now the current worldwide downturn has leveled some of the playing fields, the first worldwide economies to get going again will undoubtedly be working from a position of strength for possibly the next 50 years. At the same time that the US is shutting these valuable workers out, other countries, often their home countries, are developing the resources to put them to work elsewhere. The longer that the US pushes these workers away, not only do they forgo the economic development caused in the short term by these workers, but they undermine the US's position in the world of where the best and brightest want to be to seek their fortunes.
While in general, immigration restrictions should be opened up to more individuals, this specific type of immigration is far more necessary than our leaders seem to acknowledge.
Jeffery Joerres, CEO of Manpower, Inc. apparently agrees with me.
In a reluctant foray into politics, Mr Joerres says the US is shooting itself in the foot by having too low a limit on the number of non-immigrant visas it issues, meaning that the work permits tend to run out by May every year.
"That's just wrong," he says. "The growth of this country came from people who were not American but were classically American - who came here from another country with an idea, developed it and created employment. Two-thirds of Silicon Valley companies were started by people not born in the US."
http://www.ft.com/cms/s/0/63c190a6-4f0b-....?nclick_check=1
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