Participatory Budgeting: not just for regular budgets

The Participatory Budgeting Project has a guide for communities that want to participate in decisions about the use of funds from Tax Increment Financing districts. The governance structure associated with Tax Increment Financing varies by state (and not all states have TIF), but there are potentially significant amounts of funding at stake. TIF districts capture the increased property tax increment in a set geographic area and use it to finance private or public projects. They use of funds often lacks transparency, and is often predetermined when the district itself is created.

I’ve been following the move to participatory budgeting for a while, and this is an important acknowledgement by PBP that a lot of public money is outside even the difficult-to-engage standard budgeting process.

Download their guide here: PB with Tax Increment Finance Funds

Why is recovery taking so long—and who’s to blame?

We are enduring one of the slowest economic recoveries in recent history, and the pace can be entirely explained by the fiscal austerity imposed by Republican members of Congress and also legislators and governors at the state level.

EPI’s Josh Bivens examines the reasons beyond our slow economic recovery (one that has progressively slowed with each recession).

Given the degree of damage inflicted by the Great Recession and the restricted ability of monetary policy to aid recovery, historically expansionary fiscal policy was required to return the U.S. economy to full health. But this government spending not only failed to rise fast enough to spur a rapid recovery, it outright contracted, and this policy choice fully explains why the economy is only partially recovered from the Great Recession a full seven years after its official end.

The question of why the economic recovery has been so tepid is a vital part of the presidential election discourse. Clinton says she will increase employment through a public investment program. Trump says he will cut taxes to spark employment growth (and further limit spending).

Bivens argues that it’s federal policymakers who are most to blame, since structurally only the federal government can maintain spending levels in the face of revenue declines (through monetary policy and debt increases). State and local governments lack these tools (with some caveats around borrowing). But I think this lets state and local officials off too easily; many of them also embraced austerity as reason for pushing through tax cuts that will be almost impossible to reverse. And state lawmakers (which control the revenue options available to cities) lacked the courage to grapple with structural fiscal issues that each recession has made progressively stark.

Source: Why is recovery taking so long—and who’s to blame?

Teacher pay continues to fall relative to similar workers

A new report by Sylvia Allegretto at IRLE and Lawrence Mishell at EPI finds that in 2015, public school teachers’ weekly wages were 17% lower than those of comparable workers (a gap that has widened from 1.8% in 1994).

There are many reasons for the pay gap between public school teachers and similarly-educated workers, including the same gender pay gap that affects workers throughout the public and private sectors. But there’s no doubt that the widening gap between teachers and other college educated workers is a direct consequence of our rapid disinvestment in public services, which has hit school districts harder than any other segment of the public workforce. I’d be interested to see a similar study of other public workers and their similarly-situated private counterparts.

Source: The teacher pay gap is wider than ever: Teachers’ pay continues to fall further behind pay of comparable workers

From the annals of state austerity budgets…

To the Editor:

Thank you for your editorial about Illinois and Kansas as examples of states where policy makers do more harm than good (“Sorry Tales From Two Statehouses,” April 25).

Illinois’ record 10-month budget impasse is eroding much of its educational and social service systems. According to a poll of 444 Illinois social service providers, 85 percent are scaling back on the number of clients they serve.At least 3,200 homebound seniors have lost home-delivered hot meals.

Service agencies have laid off experienced and talented staff members, perhaps never to get them back. Lutheran Social Services of Illinois, the state’s largest social service provider, announced that it would cut 43 percent of its work force.

And all 29 Illinois agencies serving sexual assault survivors have instituted furloughs or left unfilled positions vacant, leaving survivors without essential services.

The damage is permanent, not easily or perhaps ever remedied. Even when funding is restored, we won’t simply return to business as usual. Ours is a real-life example for governments considering a similar path.

President, Sargent Shriver
National Center on Poverty Law

Source: Drastic Cutbacks in Illinois – The New York Times

Water woes could sink Flint’s property values even more

The situation in Flint only gets worse: not surprisingly, residents are now worried about their property values, which have already fallen significantly over the past decade. The inability of many residents to sell their homes will only get worse as the reputation of the city’s water supply plummets. This means not only an ongoing crisis of lack of mobility for the city’s residents, who might want to move to better work opportunities, but a looming crisis for city’s already decimated property tax base. Residents will certainly request reassessments of their property values, which are tied to the true cash value of the home.

“Given what’s going on there, I’d have to imagine there’s a plummeting in the fair market value,” said Nathan Resnick, a Bloomfield Hills lawyer who specializes in tax appeals and real estate law. “There’s going to be disparity” between what assessors say the properties are worth and what buyers are willing to pay.

Morse said lenders are already skittish about lending in Flint and are asking appraisers to find comparable homes that have sold very recently rather than, say, eight months ago.”Eight months ago was a completely different market than what’s going on now,” Morse said.

Source: Water woes could sink Flint’s property values even more

Al Jazeera has also covered the story:

Defending public pensions

I’ve written a lot about how public pensions came to be blamed for the fiscal crisis looming (or already “crippling”) many cities and states. The National Public Pension Project has been working since 2007 to change the narrative about the value of public pension plans, and has an interesting website and blog.

NPPC believes every American should be able to retire in dignity. We also know that there is no one more interested in strengthening the public pensions system than the public employees who are counting on pensions to retire. After all, public pensions are the only source of retirement for 30% of public employees since they do not receive Social Security. Pension plans also play a vital role in decreasing poverty among older Americans, according to the National Institute for Retirement Security.

Across the country, public employees – who have faithfully contributed their life savings into the pensions systems — are at the mercy of public officials unfairly targeting their financial security for political gain. The NPPC is working to preserve the financial security of all workers for generations to come.

Follow their blog or check them out on twitter:

Crowdfunding for the Public Good Is Evil | WIRED

Important article about the slippery slope from an underpaid teacher crowdfunding for classroom supplies to a bankruptcy city crowdfunding to clean up its parks. Crowdfunding is great when it funds new products that aren’t getting supported by more conventional forms of investment:

Public necessities, by contrast, are not awesome; they’re essential. Roads, health care, education: These are not the kinds of things that go viral and raise $2 million in less than a week. But if crowdfunding for the public good is allowed to continue unchecked, it’s not hard to imagine a future in which everyone votes on public works with their dollars—distorting priorities and giving those with deeper pockets more of a say.

Of all the crowdfunding appeals I’ve come across on facebook, a solid 90% of them are for healthcare expenses (and more often than not for dire conditions, like cancer or a terminal genetic disease). This is depressing not just because healthcare is also a public good (and these appeals make clear the inadequacy of our healthcare funding structure), but because it puts people in the position of begging for money at the most desperate time in their lives. Their very survival is now hitched not just to their own healthcare-employment situation, but to the wealth of their family members, classmates, and facebook connections. I’d like to call that evil too.

Source: Crowdfunding for the Public Good Is Evil | WIRED

BART gets real

Infrastructure may not be sexy, but you tend to notice when it crumbles around you. BART has been having all kinds of problems lately, and its twitter account manager isn’t pulling any punches.

We want semi-decent infrastructure without all the boring planning and funding that requires. Anyone who’s ridden a fixed rail system anywhere outside the U.S. has to suppress the shame of realizing your own country’s efforts at transportation are like a child’s haphazard train set. Do we care enough to fix it?

Source: San Francisco’s transit system stopped being polite and got real about complaints on Twitter

States fighting the minimum wage

What rights to cities have to regulate the conditions under which their residents work? If some state legislatures had their way: none.

With federal efforts to increase pay for the lowest earners stalled by Republican opposition, a slew of states, cities and towns across the country have hiked the local base pay on their own. But other states are doing the opposite, in some cases passing laws prohibiting cities and towns from changing workers’ pay and benefits on their own.

Recent weeks have seen the continuation of a substantial pushback to efforts in cities and towns around the country to raise the minimum wage. Utah and Alabama are the latest examples of states either defeating measures to increase minimum pay or overriding local efforts to hike pay.

Read: States rush to block local efforts to hike minimum pay – CBS News

Of course these states argue that minimum wage policies destroy jobs (a claim successfully debunked by many, including the great researchers at UC Berkeley’s Labor Center, where I work). Here’s an Alabama senator parroting that argument:

But even if state legislatures believe this, what are the implications of denying cities the power to pursue these policies and risk the consequences? Presumably, if wage policies are such a job killer, those firms will locate elsewhere in the state (a natural experiment in minimum wage policy). Are state legislatures really more concerned about urban workers than their own local representatives? Or are cities likely to pursue policies that might benefit the city but somehow damage the state’s economy in the long run?

I think it’s important not to just dismiss the Red-Blue political divide that pits state legislatures against their own city governments (although that is important terrain to expose, and certainly fundamental to Flint’s crisis, among other debacles). There is also an argument being implied about the proper power and economic relationship between cities and states, one that deserves real attention, both by activists and researchers. Remember that powers in our federal system often gravitate to one branch or another, and can be calcified there. What’s at stake here is the question of who has the power to implement economic policy.