mholdri.....I pose the question(s) to you, how do you fix things then? What do you think is the best way to go about making Toledo better and reversing the declining tax base? I'm just curious, that's all.
posted by avinsurer at 09:07 P.M. EST on Mon May 07, 2007 #
Since we live in a Free Market Economy (not Socialism), Regional growth must be accomplished via leadership from the private sector, with support from the public sector.
A successful model of regional growth exsists in North Carolina. There, the Research Triangle just celebrated its 50th anniversary by strategically planning for the next 50 years. (Look it up on the internet). This effort was , and continues to be led, by the Universities in the Raleigh, Durham, and Chapel Hill area.
Regional growth is on the agenda in our area. Dial up www.lakeeriewest.com "Building a Region", and click on "Support", to see what the private sector is doing.
Also, dial up LEWIKI to get the latest updates on progress.
posted by lew at 04:02 A.M. EST on Tue May 08, 2007 #
Cities don't need to struggle to maintain their tax base if their voters and politicians were rational and logical.
You can't force a business to come or stay. When they flee in such a wholesale way as seen in Toledo, there's essentially nothing to be done.
However, you CAN go the corrupt and elitist route, by handing out tax abatements to preferred businesses, loading up ever fewer taxpayers with ever larger taxes, and by failing to cut the local government budgets in line with anticipated fall in tax revenue. This means that as such a politician, you CAN play favorites, increase the victimization of less-able taxpayers, and keep yourself in caviar.
Well, I do suppose you could go the boring, honorable route of cutting the expenses of local government, in line with falling revenue. Crazy idea, huh? I'm just stupid that way.
posted by GuestZero at 04:36 A.M. EST on Tue May 08, 2007 #
The reasons a business will come or go hinges on the following:
1. The cost of taxation.
2. The cost of regulation.
3. The availability of customers (not applicable to all busineesses).
4. The avalability of employees (different businesses having needs for different types of employees).
5. The availability of other resources (transportation, energy, vendors, etc.).
1 and 2 are the only reasons that matter. 3 through 5 are a result of the effects of 1 and 2. That is, if 1 or 2 keep businesses from coming, 3 through 5 will drop and vice versa.
Other things can affect 3 through 5 - but they don't hold a candle to the effect of having a healthy economy.
For example, you can improve the fun things to do for young people (the lack therof being an often cited problem), but that isn't going to help if the environment for commerce isn't sustainable (ie, items 1 and 2 are high). In other words, going to a bar is great, but not if you don't have a job to pay for it. The idea of government increasing #1 to attempt to enhance #'s 3 through 5 on their own is doomed to failure.
Another example of 3-5 chasing 1 and 2 is the government providing things like transportation and energy infrastructure (wasn't there some proposal by Pete Gerken to invent some new form of energy or something?). But again, those things can't come first because as long as you have a low base, they require increasing the rate of #1 to pay for it which is not sustainable for business. Government can eventually do all those cool things as the tax base increases internally as a result of a healthy economy.
Increasing #1 by expanding the base externally (regionalism) doesn't solve the problem - it makes it worse. The goal (though often misunderstood) of regionalism is to reduce the competition by taking it over. If you look at your neighbor and you see that they are doing better, you are much better off emulating them than burdening them with your unsuccessful habits.
And reducing #1 by making government more efficient doesn't work because that politically justifies doing more with government which inevitably gets you back to the same place. Government is way better off being a bumbling mess. That's exactly why we have 3 branches at the federal level: to keep it from being efficient. The last thing we want is an efficient government. What we need is a smaller government so that its essential inefficiency is not as big of a deal.
Nothing will work until the electorate understands that the economy is not sustainable in a competitive environment with the current load of government social programs and market price fixing (unions and regulation).
posted by babbleman at 10:18 A.M. EST on Tue May 08, 2007 #
Let me clarify my last post a bit. I didn't mean to condemn regionalism as it applies to cooperation between governments to reach a common goal. I do, however, mean to condemn it when it is being pushed by a potential memeber that needs it to bail itself out because of its own bad practice.
Toledo has nothing to contribute - it only stands to take. At this point, any success that comes from a combined effort will only serve to enable Toledo's problems further. Toledo has an addiction - it needs to come to terms with that addiction and fix it.
Toledo needs to reform itself and prove economic viability on its own FIRST - before it hitches itself to the fortunes of other partners that have lived right from the start.
posted by babbleman at 12:44 P.M. EST on Tue May 08, 2007 #
Toledo has nothing to contribute
Let's see how you like paying $1 for a glass of water.
posted by SensorG at 01:13 P.M. EST on Tue May 08, 2007 #
SensorG - water for the suburbs is also available from Wood and Fulton Counties - the costs may vary (and may be more expensive) but Toledo's leaders have done too much to destroy any amount of trust that had been building that suburban communities may be willing to pay more just to not have to deal with Toledo...
Besides, you don't need to change your form of government in order to change your attitude or your willingness to cooperate.
posted by MaggieThurber at 04:16 P.M. EST on Tue May 08, 2007 #
Boy, Babs, when you want to, you make some powerful sense around these parts. As you noted, the key to the issue of regionalism in LC is that Toledo will only take the opportunity to bail itself out instead of fixing itself first. The surrounding communities well know Toledo is the worst example of a welfare case. I am suspicious about Konop's motives, but if he's willing to be open about it, and the Blade is also willing to report on it with equal honesty (i.e. objective detachment), then we will be able to see where the LCC will take this entire thing in time to protest any injection of the now-common Toledo political poison.
posted by GuestZero at 03:43 A.M. EST on Wed May 09, 2007 #
avinsurer: That is a great question! I think we do spend too much time complaining and not enough time devising solutions.
On that note, I'm not 100% sure. Two things off the bat that I can think of:
1) Eliminate any living wage laws that are on the books.
2) Get the city out of the business of doing things that private industry can do cheaper and better since gov only redistributes wealth that is already present and does not create it. For instance, get the city out of the garbage pick-up, the street cleaning, property development and now the ambulance business to name a few.
Although, how about this idea; if bigger is not better when it comes to gov, that we can place many of Toledo's problems at the feet of too large a gov and regionalism is obviously not the answer because it would make the problem worse, than how about we look at decentralizing Toledo's city go?
What I mean by that is dividing the city up into 6 or 9 autonomous municipalities that govern themselves Toledo city limits not unlike Washington Township now. Each area has it's own volunteer fire department and police service while taking care of it's own garbage collection/services itself in whatever way it sees fit.
Would this competition fuel growth and reduce expenditures overall to residents of the area while at the same time bring elected officials closer to their constituents?
I'm going to try and expand on this idea on my own blog in the next few days but I'm interested in your take on it.
posted by mholdri at 09:29 A.M. EST on Wed May 09, 2007 #
Yes, solutions are way better than complaining. Can anyone point me to a PDF of Toledo's budget - either current or recent past?
posted by babbleman at 10:17 A.M. EST on Wed May 09, 2007 #
I can't find anything at http://www.ci.toledo.oh.us/
Google didn't turn anything up either.
posted by babbleman at 10:40 A.M. EST on Wed May 09, 2007 #
I've often wondered how you can get that information myself.
posted by mholdri at 11:42 A.M. EST on Wed May 09, 2007 #
In January 2006 for use in another thread here, I had found a PDF of the 2003 Toledo budget and it had pretty good detail. I remember doing roughly the same things - checking the city site and googling. So I know it was out there in the past but no luck today.
posted by babbleman at 12:50 P.M. EST on Wed May 09, 2007 #
try this link:
toledo report of expenditures
It's from The Blade and it was the projected expenditures prior to the actual budget vote...
posted by MaggieThurber at 01:38 P.M. EST on Wed May 09, 2007 #
Thanks, Maggie - that's excellent. The multi-year helps alot too. Too bad it doesn't have the revenue.
posted by babbleman at 09:30 P.M. EST on Wed May 09, 2007 #
babbleman - revenue is also available...If you do a search for Toledo budget on The Blade website, go to the end of march, you should find the story where council voted on the budget. Inside the story is the link to the pdf I posted, but there's also one for revenue.
good luck!
Oh - and if you find a similar document with the APPROVED budget, please share with the rest of us.
posted by MaggieThurber at 03:04 P.M. EST on Thu May 10, 2007 #
babbleman --
You do an excellent job of outlining the key factors affecting a businesses decision where to locate. However your analysis of those factors is flawed.
It is simply incorrect to conclude that only the costs of taxation and regulation matter. While those factors matter, for most businesses they are nowhere near the most significant.
It is notable that California is second to only New Jersey in having the highest tax burden on corporations. Yet California has many of the most dynamic companies in the world (and, in Silicon Valley, a hugely disproportionate number of the most succesful entreprenuerial ventures). Alabama, on the other hand, has one of the lowest tax burdens in the country. Yet Alabama's economy is one of the worst.
Why? There are many reasons. But the key is really your point #4 (the availability of employees). And the key factor there is not quantity, but quality of the available workforce. For businesses that require a low-skill workforce taxes might matter more because low-skilled workers can be found almost anywhere. But for low-skilled jobs it is even more profitable for businesses to outsource to China, Mexico or India. The U.S. is not going to win that fight.
So the key is the location of highly-skilled workers. Where can those people be found? Generally they are in places with top notch educational institutions and/or strong cultural advantages that attract well-educated and mobile workers.
That's why the list of states by corporate tax burden does not corollate well with the economies of the states. Even states with basically zero tax burden and little to no regulation of corporations (e.g. South Dakota) have mediocre economies. The other factors simply matter more to the most dynamic business out there.
Toledo, and any other area, is therefore better served using its money (and yes, that means tax money -- who else is going to pay for it?) to strengthen its educational and cultural institutions.
Too many people think cutting taxes is all that matters. But the evidence is very clear, its a factor that is most often heavily outweighed by others. If you still believe otherwise, then the challenge is on you to articulate why many of the states with the highest tax burden also have the best economies, and vice versa.
posted by BrianR at 05:44 P.M. EST on Thu May 10, 2007 #
BrianR, I agree with you completely. I did not mean to infer that taxation and regulation were the only factors, or even important factors, at any time and place in attracting business. My comments were intended to be in the context of what the city government's role should be in this particular region at this particular time and more specifically as a reaction to the topic of this thread which emphasizes the idea of increasing the tax base by expanding it geographically.
This city is in start up mode. The regions you cite, Northern California and New Jersey, are at very mature stages of highly successful development. What they are doing as they bask in their successes and what we need to do to scramble to the next level are going to be totally different.
I was in Scottsdale for a week last month and paid 35% in taxes on my rental car, 25% of which was city and county. I would love to see Toledo and Lucas county be able to demand that kind of rate - but only AFTER they have grown 72% in 15 years as Maricopa county has. NOT in an attempt to get that kind of growth started from scratch as we need to do here.
You are also correct in that highly skilled workers are more important than taxation. But again, in the context of what government can do in start up mode, a highly skilled workforce is not something they can be concerned about directly. The government cannot be a force to draw people when its base is low and declining - only business can provide that force.
So baby steps first, the government needs to do whatever it can to attract business, which means being as friendly as possible to businesses' bottomline because it is all the city has right now - the ability to get out of the way. It doesn't have a highly skilled workforce and trying to buy one in advance of (and to the aversion of) bringing the business here will not work. Its a classic and fatal mistake in the use of precious start up funds that most new business owners make. And it is one that politicians are particularly inclined to pursue to perpetuate their office.
posted by babbleman at 10:11 P.M. EST on Thu May 10, 2007 #
Toledo...is...better served using its money (and yes, that means tax money -- who else is going to pay for it?) to strengthen its educational and cultural institutions.
This is where we diverge completely Brian. Educational and cultural institutions are not artifacts of government (even though governments seem to be paying for them - thus the politician's perpetuating their office) - they are artifacts of business (which is really paying for them from their bottomline). Government does not and cannot create these things - business and only business can. So when business is headed down, you cannot accelerate its downward spiral in hopes of turning it around. It is logically backwards.
When a patient is critically ill and declining, you do not make them get on a treadmill and exercise. You clear their calendar, spoon feed them and pray.
posted by babbleman at 10:42 P.M. EST on Thu May 10, 2007 #
Babs said: «I would love to see Toledo and Lucas county be able to demand that kind of rate - but only AFTER they have grown 72% in 15 years as Maricopa county has. NOT in an attempt to get that kind of growth started from scratch as we need to do here.»
I'm wondering if people actually understand this argument. So, let's pose it another way:
Do you pay top dollar for an executive to run the company towards a period of large expansion, OR do you pay her modestly and give her stock options so that she can obtain her "reward" later when her successes actually come to pass?
By consistently choosing the former, Toledo is indeed putting the cart before the horse, and often uses a few, standard elitist arguments to support such silliness. Compensation should be linked to performance. If you don't, you end up with Toledo's set of wasteful and expensive elites who are effectively on a welfare system.
Does anyone remember that VIP yahoo that the Port Authority had retained to do economic development? After a good year at failing to get anything done, the Blade reported on his failures, but his PA masters used backpedaling language such that they blatantly DENIED what the man's job was in the first place, and then tried to cover it all up by claiming things like 'best effort' and 'advisory'. THAT is a big part of the problem in Toledo -- the use of outright denial and propaganda to support the idea of paying yet another middle-aged White guy huge bucks to play in the Toledo Club like a peer of the realm.
Uncaring elitism is what's actually impeding progress in Toledo. We've long decried the harmful effects that individual welfare had upon motivation and accomplishment. Unfortunately for the Toledo propaganda system, the same thing applies to corporate and institutional welfare. All welfare is morally debilitating. Our capitalistic elites have ZERO motivation to actually build long-term and prosperous businesses ... just like that monthly welfare check tends to keep the local yokel inside his home each day, watching cable TV, instead of going out and doing useful labor.
posted by GuestZero at 10:04 A.M. EST on Fri May 11, 2007 #
I want to make sure that I am on the record that I do not support "regionalism" through any kind of "unigov" effort.
It is unlikely to ever work. The proponents of unigov don't really want cooperation. They want control. For example, a few years back, TMACOG unveiled a proposed expansion map of Toledo Express Airport. It put large areas of currently developed Springfield Township and Holland under asphalt and tarmack. It's just mind boggling that these same people say to local governments trust us and join together.
posted by holland at 10:51 A.M. EST on Fri May 11, 2007 #
Please read the Letter to the Editor on Leadership in this week's City Paper and post your reactions.
posted by lew at 12:05 P.M. EST on Fri May 11, 2007 #
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