Category Archives: Local Government

ALEC Again

The American Legislative Exchange Committee, familiarly known as ALEC, has come in for substantial criticism as its formerly-secretive operations have become more public. Most of those criticisms have focused upon its success in working with Republican legislators to create state-level policies that benefit businesses and corporations–often at the expense of working Americans and the poor.

Formed in 1973, ALEC was virtually invisible until 2011, when media reports on its activities and priorities–reducing regulation and individual and corporate taxation, combating illegal immigration, loosening environmental regulations, tightening voter identification rules, weakening labor unions, and opposing gun control–brought it unwanted attention, and prompted the departure of several corporate members.

The Guardian has recently reported another priority–an  accusation that ALEC fosters White Supremacy. 

AlEC, the rightwing network that brings conservative lawmakers together with corporate lobbyists to create model legislation that is cloned across the US, has been accused of spreading racist and white supremacist policies targeted at minority communities.

A report published on Tuesday by the Center for Constitutional Rights (CCR) and other advocacy groups charges Alec with propagating white supremacy.

In one of the sharpest criticisms yet levelled at the controversial “bill mill”, the authors warn that “conservative and corporate interests have captured our political process to harness profit, further entrench white supremacy in the law, and target the safety, human rights and self-governance of marginalised communities”

The report came as ALEC was preparing for its four-day Policy Summit in Scottsdale, Arizona. The agenda for that meeting included sessions on several of ALEC’s “core principles” including “election integrity” (more properly called vote suppression), privatization of education and support for homeschooling, and protection for pharmaceutical companies (because Big Pharma needs so much protection….)

The event’s dinner was jointly hosted with the Alliance Defending Freedom, which the Guardian identified as “an anti-LGBT coalition devoted to re-criminalizing homosexuality in the US in the name of Christianity.”

ALEC was also responsible for the passage of 2010 Arizona law SB1070, which initiated what was then the most extreme crackdown on undocumented migrants in the entire country. The measure was patterned after a “model bill” drafted at the ALEC conference the previous year.

The CCR report characterized ALEC as a “shadow state apparatus” in which “private industry seizes control of the authority of the state, writing legislation and public policy for the general public behind the closed doors of a CEO suite,” and it identified four policy interventions that work to advance White Supremacy: “Stand Your Ground” laws (studies show that states having such laws are much more likely than states without them to rule homicides justifiable in cases of white-on-black killings); voter ID laws (overwhelmingly shown to disproportionately disenfranchise minority and poor voters); “critical infrastructure” bills (these bills criminalize efforts to protest contested infrastructure construction like the Dakota Access pipeline); and efforts to ban criticisms of Israel on college campuses.

These positions would be cause for concern coming from any organization, but they are truly dangerous coming from ALEC, because its partnership with state-level Republicans has been both secretive and wildly successful.

Bill Meierling, ALEC’s head of External Relations, boasts that

 “Alec is routinely targeted because its member legislators are nearly 300% as effective as any other group of elected officials. In fact, this year, USA Today reported that of 10,000 bills analyzed in state legislatures from 2010-2018, 2,900 were based on Alec model policy and more than 600 became law.”

That’s a statistic that makes the hair on my neck stand up.

 

It’s Not Just In Washington

It seems as if the rule of law is under assault everywhere.

A recent story by Reveal, a nonprofit news organization, alleges that during the competition for Amazon’s second headquarters, the state made four safety citations against the company “go away.” (I find it illuminating–and incredibly depressing– that the Indianapolis Star simply published Reveal’s investigative report. It’s just one more bit of evidence that the Star itself no longer has the capacity to engage in investigative journalism or fulfill its watchdog role.)

When an Amazon worker was killed by a forklift in a Plainfield warehouse in 2017, the state of Indiana’s investigator found the company was at fault. The state cited Amazon for four major safety violations and fined it $28,000.

But an investigation by Reveal from The Center for Investigative Reporting has found that, as Gov. Eric Holcomb sought to lure Amazon’s HQ2 to Indiana, state labor officials quietly absolved Amazon of responsibility. After Amazon appealed, they deleted every fine that had been levied and accepted the company’s argument — that the Amazon worker was to blame.

The investigator on the case, John Stallone, had arrived at the warehouse a day after 59-year-old Phillip Lee Terry was crushed to death. He was so troubled by the pushback he was getting from higher-ups that he secretly recorded his boss, Indiana OSHA Director Julie Alexander, as she counseled the company on how to lessen the fine.

“It’s like being at a card table and having a dealer teach you how to count cards,” Stallone said.

Stallone is quoted as saying that pressure to back off came from “as high up as the governor’s mansion.”

The governor has reacted angrily, sending Reveal and the Star an intimidating “cease and desist” letter, and insisting that he was not involved in handling the dispute. The officials at the labor department have thus far declined to be interviewed.

According to Reveal,

Indiana OSHA issued four serious safety citations, for a total fine of $28,000. Stallone sought more, but he was getting pushback. On Nov. 20, 2017, Stallone joined his boss, Julie Alexander, the Indiana OSHA director, as she called Amazon officials. He secretly recorded the conversation, which is legal in Indiana, and shared the recording with Reveal.

During the call, Alexander told the Amazon officials what she’d need from them in order to shift the blame from the company to “employee misconduct,” according to the recording….

Some days after the conference call with Amazon officials, Stallone said Indiana Labor Commissioner Rick Ruble pulled him into his office. The governor was there, too, standing by the commissioner’s desk, according to Stallone.

He recalled that Holcomb told him how much it would mean to Indiana if the state won the Amazon headquarters deal. Then, Stallone said, the commissioner told him to back off on the Amazon case — or resign.

Stallone did resign, and reported the situation to OSHA.

The same day Stallone sent his whistleblower email, Amazon’s corporate offices in Seattle gave a $1,000 campaign contribution to Indiana’s governor. It was years before Holcomb would next face reelection, and Amazon hasn’t donated to him before or since.

Perhaps–as the Governor and labor officials insist– Stallone is just making entirely innocuous actions seem nefarious, although it is difficult to imagine what his motive might be. Or perhaps, the prospect of winning Amazon’s headquarters–or at the very least, avoiding measures that might make the state less competitive–persuaded the Governor and other officials to make an exception to the rules.

These days, everywhere you look, exceptions are swallowing the rules.

 

 

Indiana Doesn’t Do New

Residents of Indiana’s urban areas will tell you that one of the more annoying features of Hoosier life is a state government in thrall to rural interests.

Indiana has a significant urban/rural cultural divide. Our legislature–which for years has been gerrymandered in ways that significantly favor rural Republican areas–resents the fact that Indianapolis is the state’s economic driver, and routinely screws us over.

State agencies, for their part,  vary in their approach to the needs  of urban Hoosiers.

Nowhere is the disconnect between state and city more striking than the incomprehension of urban realities displayed by Indiana’s Department of Transportation. I’ve posted previously about the conflict between the city and the state over the latter’s planned repair of the aging interstates that cut through and deface residential and historic districts in the central city.

When I read this recent article from Forbes, I thought about the reluctance of Indiana’s DOT to actually engage with the group of planners, architects and residents who came together to try to explain why elevated highways, interchanges and walls designed for country interstates create huge problems in cities.

The interstate highway system is over 50 years old and many portions of the system need repairs or upgrades. As we debate the future of the interstate highway system in light of advances in smart infrastructure and autonomous and electric vehicles, it’s worth considering whether some portions of the system should be removed, especially urban portions that are underused or harmful to the vitality of cities.

The article recognizes and recounts the many benefits of the Interstate system. Interstates have played an important part in the nation’s economic growth. But as the article notes,

The highway system is great for facilitating travel between metro areas and states and faster travel times are what make the system so valuable. But the system doesn’t need to be in its current form to serve this purpose. Several stretches of highway within cities’ boundaries do little to facilitate inter-state travel and come with a host of negative impacts on the cities that contain them….

Economist Nathaniel Baum-Snow estimates that on average the construction of one interstate highway through a central city caused an 18% drop in that city’s population between 1950 and 1990. The economic explanation is that the highway decreased commuting times, which allowed people to live farther from the city. Furthermore, the decrease in the price of commuting freed up money that could be used on other things, including more space. And since people really value space—think about how the average home size changes with income—this increased the demand for space and led to more suburbaniza­tion and a decline in population density as people consumed more land and built bigger homes.

Population loss wasn’t the only result of highways running through the cores of cities. Entire neighborhoods were razed to make room for highways, destroying homes, businesses, and urban amenities….Highways also became barriers between neighborhoods, cutting people off from job opportunities and retail options. There’s also evidence that air pollution from highways negatively impacts student outcomes in nearby schools.

Highways that bisect cities create barriers that hinder interactions between people on either side. They also take up valuable real estate that could be used for more housing, businesses, or amenities, such as parks, that make cities more appealing places to live and work.

The article’s conclusion, ironically, echos the approach preferred by Indianapolis and rejected by the state’s DOT. (In fairness, DOT did retreat from its original plan to add lanes and huge buttressing walls…)

Several highways running through cities could be removed without adversely affecting the overall system, and removal would clear the way for a new period of urban revitalization. A system of smaller, lower-speed boulevards would still enable travel through city centers without the noise, pollution, and unsightliness of today’s high-speed highways. It’s time to try something new.

And I’m sure some states will actually work with their cities to do that. Indiana, not so much.

 

All Cost, No Benefit

Every city of any size, and every state, has a government agency charged with “economic development.” Economic development is almost always a euphemism for luring new employers to the city or state.

A productive discussion about what a genuine effort to improve the local economy should and should not entail is considerably overdue. Such a re-examination remains unlikely, but here and there, investigations of current practices do remind us that not everything we call an “incentive” deserves the name.

Which brings us to Wisconsin, Scott Walker and Foxcomm. A report from the Brookings Institution recently described that embarrassing boondoggle:

In 2017, the state of Wisconsin agreed to provide $4 billion in state and local tax incentives to the electronics manufacturing giant Foxconn. In return, the Taiwan-based company promised to build a new manufacturing plant in the state for flat-screen television displays and the subsequent creation of 13,000 new jobs.

It didn’t happen. Those 13,000 jobs never materialized, and plans for the manufacturing plant have been consistently scaled back. Even if the project had gone through as planned, there is no way the Foxconn subsidy would have made money for the state, or provided earnings benefits for residents that exceed its costs. It now appears that few of Foxconn’s promises will be fulfilled, even though local governments have gone into debt over the project.

The Foxcomm “deal” was widely panned at the time, but as Brookings reports, criticisms of that effort were mostly based on the enormous size of the incentives being offered, not on the underlying concept. But since 1990, even the average size of these business incentives has tripled, threatening public services and the social safety net.

Even when the incentive being offered is comparatively modest, however, research doesn’t confirm the underlying assumptions of the approach. At least 75% of the time, the incentives don’t really affect the relocation decision one way or the other.

They’re all cost and no benefit. Furthermore, even when incentives do tip a location decision, they do not pay for themselves. They may create new jobs, but frequently they also bring in new workers from outside the city or state, which raises costs to public services that offset at least 90% of any increased revenue…On average, only 10-30% of new jobs go to state residents who are not already employed.

Are there incentives that would work? Brookings says there are, and offers the following checklist:

Do the incentives target the right businesses?

Will the business provide multiplier effects? When the business buys from local suppliers, it helps increase jobs at those companies. Workers employed at the business, too, will buy from local retailers, increasing those jobs.

Is the business “traded”—i.e., selling its goods and services outside of the state or community? Incentives to non-tradeable firms will just displace jobs at other local non-tradable firms.

Is the real job multiplier accurately calculated? Multipliers can be overstated if they ignore the increased local costs that accompany business growth.

Is the business locally owned? Locally owned firms spend more of their revenue locally, benefiting the hometown economy.

Do the incentives target the right areas?

Incentives should target economically distressed local areas, with more available labor that is not employed. That way, the share of new jobs that go to local residents can be two to three times as great, compared to already-booming areas.

Do the incentives target high-tech businesses in an area with an above-average high-tech base? High-tech businesses have additional multiplier effects because they support and spawn other local firms whose workers and ideas flow from one to another. But this only works when the area has a sufficiently large “cluster” of tech firms to build from.

Are they the right type of incentives?

Are they structured so cash incentives occur upfront? Upfront incentives are more cost-effective in affecting business location decisions, because they are more relevant to business decisionmakers who focus on the short term.

Do they include enticements/requirements to hire locally? For example, customized training programs can encourage firms to hire the local unemployed.
Do they include a healthy share of customized businesses services, or is it all cash giveaways? Business services such as job training, business advice to smaller businesses, and new transportation infrastructure can have job creation effects per dollar that are five to 10 times greater than tax or cash incentives.

Do the incentives avoid robbing Peter to pay Paul? If governments pay for incentives by decreasing public spending on education, training, or infrastructure, the negative economic development effects of those budget cuts may exceed any benefits from the incentives.

Finally, is there a decent model to accurately assess the impact of the incentive?

There are practical ways to evaluate incentives. We can compare assisted with unassisted firms, or assisted areas with unassisted areas. There are good estimates of how many location decisions will be swayed by a cash incentive package of a particular size, and how many jobs per dollar will be created by a high-quality customized job training program. State and local government researchers can combine these evaluation approaches with models of local labor markets and fiscal impact to see whether a specific incentive package’s benefits are likely to exceed its costs.

Finding the right answer depends on asking the right questions–not on constantly sweetening the pot.

 

Promises, Promises….

I post a fair amount about political hypocrisy: “family values” Evangelicals who love Trump, “fiscal conservatives” who are okay with his massive deficits, etc.  But Tuesday’s local elections were a reminder that hypocrisy and cant aren’t just national phenomena.

Indiana was one of the states that held elections this year for municipal offices. In central Indiana, Democrats had some notable first-time victories, including the election of a mayor and at least three councilors in suburbs of Indianapolis that have been reliably red for as long as I can remember. (And I’m old.) But I want to focus on the more predictable results of the mayor’s race in Indianapolis proper—which, like all urban areas with populations of over 500,000 these days, is currently bright blue—where the incumbent, Joe Hogsett, won re-election by a nearly 50-point margin.

I didn’t attend Hogsett’s election-nght party, but friends who were there reported that the Mayor’s victory speech included some interesting (and appropriately snarky) comments.

In particular, after thanking his Republican opponent, Jim Merritt, a sitting State Senator, Hogsett “welcomed” his return to the Indiana Legislature,  where, he said, Senator Merritt would have the opportunity to champion so many of the issues he raised during his mayoral campaign: additional resources for Indianapolis public safety and improved infrastructure, support for LGBTQ rights, and greater support for Marion County’s African American community – things that Senator Merritt has not exactly championed (or  supported) during his 30 years in the legislature.

(To the extent we still have media watchdogs, I certainly hope they will keep a watchful eye on Senator Merritt’s efforts to legislate improvements on the issues he suddenly discovered were important during his mayoral campaign.)

Of course, Merritt isn’t the only candidate who should be held accountable. It will be equally interesting to see what Hogsett does with his impressive win, which can rightly be considered a mandate. He will also have an expanded majority—indeed, a 20-5 super-majority—on  Indianapolis’ City-County Council.

How will he use this expanded authority?

One of my more cynical friends predicts that—based on the Mayor’s extremely timid approach to governing thus far—Hogsett will take his 71% victory as a “mandate to continue doing not much of anything.”

Maybe. But hope springs eternal….

Our city, like so many others, faces a number of critical issues. Those issues will demand focused, thoughtful initiatives from the Mayor’s office: improving inadequate and decaying infrastructure; working with the State DOT to avoid further exacerbating the 50-year-old mistake of running an interstate highway through downtown residential districts; continuing to revitalize in-city neighborhoods while avoiding the pitfalls of gentrification; supporting the extension of public transportation; the continuing effort to improve public safety; and so many more.

The Mayor now has an electoral mandate and a supermajority on the Council. It will be interesting to see how he chooses to spend that political capital.

I’m hoping for signs of bolder leadership and vision in his second term, and I’ve made a wager with my cynical friend, whose prediction is that Mayor Hogsett will “boldly middle-manage the status quo” in ways that keep Indianapolis a reasonably well-functioning but ultimately undistinguished city.

Time will tell.

Meanwhile, all eyes now turn to Washington and 2020.