Local Government – Page 63

Music for World-Class Cities

When I was in City Hall back in the late 1970s, the goal was to make Indianapolis a “world class” city. That wasn’t just the rhetoric used by the Mayor and his administration–it was echoed by the City Committee (now long defunct) and by the Lilly Endowment, which facilitated the goal with generous grants.

The decision to make Indianapolis into an amateur sports capital wasn’t made because city leaders loved sports, although many surely did. It was based on a hard-headed analysis of where we might have a comparative advantage. The goal was city-building, and sports were a means to that end.

That was then, and now is now. There is no longer a City Committee, and the Endowment–while still generous and immensely important to Indianapolis– no longer partners with elected officials to improve Indianapolis as it did then. Our current Mayor is not a visionary (to put it kindly). Making matters worse, Indianapolis has lost many of the corporate headquarters and locally-owned banks from which we used to draw private-sector civic leadership.

Now, we are in danger of seeing the Indianapolis Symphony–a symphony befitting a world-class city, a symphony of which we have been justifiably proud–become a part-time (read “second-class”) enterprise.

The Symphony is facing significant financial problems. It will obviously be important to determine the cause of those problems–poor portfolio management? Unfavorable labor contract? Other? I certainly haven’t a clue, and few outside the Board and musicians themselves are likely to have even a reasonable hypothesis.

But I do know one thing: in addition to being a beloved part of our city’s cultural scene and a point of pride, the symphony is important to our local economy.

Nationally, nonprofit arts organizations generate $135 billion in economic activity annually, supporting 4.1 million jobs and generating $22.3 billion in government revenue. Investment in the arts supports jobs, generates tax revenues, promotes tourism, and advances our increasingly creativity-based economy. The typical arts attendee spends $24.60 per person, per event, not including the cost of admission, on items such as meals, parking, and babysitters. Attendees who live outside the county in which the arts event takes place spend twice as much as their local counterparts.

A symphony season has far more impact on the local economy than football. Early in my academic career, I worked on a paper with an expert in the economic impact of sports. Such impact as exists is by virtue of intangibles–the value of raising the profile of the city with the team, that sort of thing. There was no direct dollar benefit. Despite that lack of immediate economic impact, we pump large amounts of public money into privately-owned sports teams and venues.

To the best of my knowledge, no public money flows to the symphony and a mere pittance is distributed among other arts organizations in the city. The arts have clearly not been a priority.

I am not suggesting that long-term public funding is the answer to the symphony’s current problems. Obviously, figuring out what happened, correcting missteps as possible, and developing a plan for future sustainability is critical, but that process takes time. If Indianapolis weren’t so starved for revenue, some sort of “bridge” loan or grant to keep the symphony going during that time would make a lot of sense, because keeping something important is easier and less costly than trying to rebuild it once it is gone.

Indianapolis used to understand that world-class cities require constant attention and inspired leadership. These days we don’t seem to have either.

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Our Political Charade

I’ve reluctantly concluded that self-government doesn’t work. Voters respond to vacuous platitudes and bumper-sticker slogans, and candidates are perfectly willing to pander to their uninformed biases while evading the complexities of policy.

Case in point, an egregious but certainly not the only available example: Mike Pence.

Yesterday, in the “candidate conversation” hosted by the Public Policy Institute at IUPUI, Pence said he wants Indiana to have more control over how federal dollars are spent in the state. His campaign literature features a promise to create a new state agency to “reject” federal regulations, and (an unrealistic and ridiculous) promise to return federal dollars to Washington.

A couple of days ago, he declared he would not create a state- based health insurance exchange. (The Affordable Care Act authorizes states to set up these new, competitive marketplaces to allow individuals and small businesses to choose among an array of affordable, comprehensive health insurance plans.) The ACA provides for these exchanges to be established at the state level, but if a state refuses to do so, authorizes the U.S. Department of Health and Human Services to come into the state to establish that state’s exchange.

It is obviously in Indiana’s best interests to control our own Exchange. The ACA gives states considerable flexibility to tailor these mechanisms to the needs of the people living in that state, and a locally-run Exchange is likely to be more responsive to the concerns of our elected officials and the professionals and nonprofits who serve the constituency using the Exchange. Refusing to allow the state to create an Exchange doesn’t keep the dreaded “Obamacare” from being implemented; it simply assures that it will be controlled by Washington–something Pence claims he opposes.

This pastiche of inconsistent positions makes no sense as policy. But that really isn’t the point–at least, it isn’t the point for Pence. The point is to tell voters what they want to hear–that they can get services without paying for them, that (despite substantial evidence to the contrary) further reducing taxes will create jobs, that a program to increase access to healthcare is an assault on their freedom (Pence’s website really does say that), that Indiana should control its own destiny –except where we refuse to do so and thereby hand control over to the federal government. It’s all ludicrous and incoherent, and it has kept Pence ahead in the polls.

It’s been said that we get the government we deserve.

That’s the problem.

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The Big Con

My husband and I were discussing the Council’s current standoff with the Ballard Administration–a dispute triggered by Ballard’s refusal to share budget information with the Council and other elected officials. That conversation brought back memories from our days in the Hudnut Administration; the then-Controller, Fred Armstrong, made himself available to Councilors, Department heads, the media….pretty much anyone who was interested in the intricacies of the budget. Fred would go on and on, explaining the numbers, funds, sources…

I don’t think anyone understood a word he said. I know I didn’t. It was the classic “bury them in bullshit,” and he was great at it. (He was also an incredibly competent public servant.)

Fred knew that most people don’t understand public finance. Our widespread fiscal ignorance is why Paul Ryan has been taken seriously, despite a budget that David Stockman, among others, has described as a “fantasy” and “devoid of credible math.” (Stockman, for those of you too young to remember, was Ronald Reagan’s very conservative Budget Director.)

Today’s candidates are counting on our ignorance of the most basic axioms of taxation and government revenue. It isn’t just that–as a colleague of mine put it recently–half of them clearly don’t know the difference between a marginal and effective tax rate. It’s that they engage in wishful, magical thinking.

Yesterday, I saw an ad for Mike Pence in which he promised to cut taxes “across the board,” and to establish an office of regulatory affairs that would resist federal regulations and return federal dollars.

I can’t decide if Pence is really that stupid, or he just thinks voters are.

There are legitimate issues around regulation–what is enough, what is too much. Reasonable people can differ over their assessments of particular rules. There is a pretty broad consensus that banking regulations were too lax, and that lack of oversight led to the Great Recession; there are certainly other areas where ham-handed regulatory policies have been distinctly unhelpful. But taking a position that all regulation is bad and must be resisted is insane. What about nursing home regulations that protect grandma from abuse? What about food and drug regulations that keep dog feces out of your beanie-weenies, or water purity standards, or building codes, or….Well, you get the point.

And how about that “cutting taxes across the board” and “sending the money back to the feds” promise?

Just how does our “I wanna be your governor” Pence propose to fund anything Indiana needs? Federal dollars pay for our roads, augment our (increasingly inadequate) police forces, and provide medical care for the indigent. They feed schoolchildren and support special education programs. Federal dollars fund small businesses (yes, it turns out that even the angry guy in the anti-Obama commercial who insists that he and his sons built their business all by themselves had an 800,000 SBA loan). The federal government funds 33% of Indiana’s budget; if we sent that money back and cut taxes, Indiana’s government would come to a screeching halt.

The Ryans and the Pences of this world are counting on our ignorance. They are con men, hustlers secure in their (unfortunately reasonable) belief that voters don’t know where their tax dollars go, don’t recognize when they themselves benefit from government programs, and have no idea how their government works or what it does.

Con artists are successful because they tell us what we want to hear, because they promise us we can have something for nothing. The ugly truth is that the people who fall for the con are the people who want to believe they can get something for nothing.

Pence and Ryan are as reputable as that Nigerian banker who will send you a million dollars if you can just front him a few thousand.

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Ends and Means

In my classes on Law and Public Affairs, one of the things I try to explain to my students is the importance of process. The way in which you achieve a goal is often just as important–sometimes even more important–than the goal itself.

This is, of course, a central principle of civil liberties. The effort to protect the public safety is a good example; important as that effort is, we cannot achieve it by imposing a police state, or engaging in random searches for which no probable cause exists. Eradicating racism and discrimination are important goals, but government cannot censor hateful speech as part of that effort.

The principle goes well beyond civil liberties. Economic development efforts focused on bringing new businesses into an area need to avoid recruitment incentives that privilege new enterprises at the expense of those already operating. Initiatives to redevelop blighted areas need to treat property owners and bidders on proposed projects fairly. When the public believes that government officials have favored their friends, or disregarded the rights of others, the trust essential to governance is eroded and other goals are endangered.

We have a perfect example of that scenario right now in Indianapolis.

The development of the Massachusetts Avenue corridor is one of the city’s success stories. When my husband and I were in City Hall, Mass Avenue was home to broken-down and boarded-up buildings interrupted by gaping holes where buildings no longer stood. Today, it’s the center of a vibrant arts scene, with restaurants, theaters, galleries and businesses. There are still a few gaps to be filled in, however; one of those is the block currently occupied by a fire headquarters building and Barton Towers, a senior citizen apartment complex constructed back when any structure on the Avenue was seen as an improvement. Today, those buildings are a jarring interruption of the pedestrian flow on the Avenue.

The Ballard Administration has proposed redeveloping that block, continuing the street-level activity and providing other needed amenities like parking. It’s an important and necessary initiative. But it is threatened by concerns about the way the administration has conducted business in the past.

I’ve posted before about the parking meter deal that benefited a well-connected vendor to the detriment of the city. Paul Ogden and others have blogged about the serious questions raised by the parking garage in Broad Ripple, being developed by a crony of the Mayor with public tax dollars and apparently little or no investment or risk of his own. CityWay is a great project, but most knowledgable observers charged that the financing was an unnecessary giveaway.

The Massachusetts Avenue project is supposed to be financed by the extension of an existing TIF–a tax increment financing district. Democrats on the Council are threatening to derail it until and unless the administration becomes more forthright and transparent about its use and abuse of those districts. Several councilors have charged that TIF repayments that should have gone back into the City’s General Fund have instead been diverted into a Mayoral “slush fund,” an account subject to less oversight, and with fewer controls on its use.

The Council’s concerns are valid. At the very least, the Ballard Administration has been less than transparent. But now, its chickens have come home to roost on Mass Avenue, and the failure of that project would be a setback for downtown and the whole city.

The Administration’s lack of appreciation for the importance of transparency and process has generated resistance from the Council. But while understandable, the Council’s willingness to block an important project in order to make its point would be a similar failure. The questions need to be answered, but not at the expense of city progress.

In this age of toxic partisanship, I suppose it is unrealistic to ask both sides to grow up and have a conversation in which the interests of the city come first.

“He started it!” may be true, but it isn’t the best place to start that discussion.

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The Politics of Pay

Whatever the merits of Mayor Ballard’s decision to give his staff huge pay raises, the “optics,” as they say, are terrible. The upcoming city budget will be more than painful, thanks largely to the ill-conceived “tax caps,” and the cuts to services will be draconian in some places. Giving your buddies in the Mayor’s office 20% raises at a time like this is simply tone-deaf. (Someone reminded me yesterday that former Mayor Peterson actually cut pay for his office staff at a time of tight budget constraints.)

For all I know, the raises were an effort to keep people from fleeing the administration; Michael Huber–far and away the most effective member of the Mayor’s staff–has already announced his departure, and this is the time in most second terms when people who can leave–who are actually employable elsewhere–begin their job hunting.

Whatever the calculus, this was a bone-headed move that will make it much harder for the Mayor to get the sort of political concessions he will need during the give-and-take of budget negotiations. It is one more bit of evidence–as if we needed any–that the “Mr. Smith Goes to Washington” American delusion is just that. Delusional.

Ballard may be a nice enough fellow, but he ran for office proudly proclaiming his “outsider” status. He asked people to vote for him because he wasn’t a “politician”–in other words, because he wasn’t someone who understood how the system worked. Voters bought it; they elected him over two opponents who actually did understand urban issues and politics. The results have been mixed, to put it mildly, and Ballard has relied heavily on outside “advisers” who have had their own interests to advance.

Cities can function with inept leadership when times are reasonably good–when we can afford the learning curve. But when the fiscal belt tightens, we need leadership that understands how cities work, what the priorities must be and how to achieve important goals.

It’s no time for the tone-deaf.

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