Tag Archives: Indianapolis

Private Prisons And Perverse Incentives

Every once in a while, my city gives me something to brag about. Most recently, that’s the current administration’s approach to Criminal Justice.

A recent article from Fortune Magazine, of all places, sets it out.

When the city heads to Wall Street Thursday to borrow $610 million to build a jail and criminal justice complex on the site of an old coking factory, it’s betting it can better house criminals and rehabilitate them on its own. That means CoreCivic, which has run a Marion County jail for two decades, will lose the contract when the new one opens.

The decision to sever ties with CoreCivic is part of a shift in policy-making that seeks to address a cycle of recidivism that keeps sending repeat offenders back to jail. It joins other governments nationwide, including California, that are reconsidering a reliance on the private companies that stepped in as the war on drugs and mandatory minimum sentencing laws caused inmate populations to soar, leaving more than half of the states paying businesses to incarcerate their residents.

There is a mountain of data detailing what’s wrong with private prisons. (When my graduate students choose to write their research papers on the subject of for-profit prisons, their conclusions range from highly critical to horrified, and for good reason.) Zach Adamson, Vice-President of the Indianapolis City-County Council is quoted in the article with what may be the best summary of the problem with prisons for profit:

“The idea that there would be profit to be made through the imprisonment of our neighbors is something that’s abhorrent to a number of people—many of our constituents cannot process that,” said Zach Adamson, vice president of the council that oversees the consolidated government of Indianapolis and Marion County. “Criminal justice is not getting better as long as our primary concern is looking to cut corners and save costs.” (emphasis supplied)

In 2016, the city convened a task force to consider ways Indianapolis could cut crime and address jail overcrowding. The task force recommended addressing “underlying causes,” in an effort to reduce both crime and the $440 million dollars Indianapolis spends on criminal justice each year–far and away the city’s biggest expense.

The issues facing Indianapolis are hardly unique: some 40% of people detained in the country’s jails are mentally ill and up to 85 percent suffer from substance abuse (with respect to those who are mentally ill, psychiatrists tell us that substance abuse is an effort at “self-medicating.”)

The complex will consolidate the courthouse, its jails, and rehabilitation operations in one modern site. The city-county council voted in April 2018 not to privatize the new lockup, dealing a blow to CoreCivic, which has managed a facility there since 1997.

“The goal of the jail system shouldn’t be to fill the beds,” said Andy Mallon, corporation counsel for the government. “We’re trying to reduce crime and reduce the number of people who are involved in crime.”

Mallon’s observation is at the heart of what’s wrong with privatizing these elements of the criminal justice system. Private prison companies are in business to fill beds, and to do so as cheaply as possible, not to rehabilitate offenders. Their lobbyists work to criminalize additional behaviors and increase prison terms for offenses already on the books–measures that feed their bottom lines.

Their goal isn’t public safety, it’s profit, and the big private prison companies donate generously to politicians in order to protect those profits.

During the Obama Administration, the Department of Justice and several state governments  responded to the research, recognized the existence of the perverse incentives, and began  terminating contracts with companies like GEO and CoreCivic. Then, of course, we got Trump, and headlines like these:”Trump’s First Year Has Been the Private Prison Industry’s Best.”  and “Trump’s Immigrant-Detention Plans Benefit Private Prison Operators.”

In Indianapolis, I am happy to say, the city has chosen to bring best practices to bear on its criminal justice problems, to evaluate those it incarcerates in order to determine appropriate interventions– and to stop paying for-profit companies to warehouse offenders.

 

 

It Isn’t About Moderates and Progressives

Democrats are constantly arguing about whether the party should support moderate or progressive politicians. It’s an argument that illustrates Americans’ tendency to prefer nice, neat labels to the messiness of reality: most people hold a variety of positions that can’t all be neatly shoved in a drawer marked “liberal” “conservative” “socialist” and so forth.

Thinking people are hard to pigeonhole.

A paragraph from a column written for the Indianapolis Recorder by my SPEA colleague Marshawn Wolley  illuminates the real issue. It’s leadership.

Voters deserve officeholders who are willing to lead–mayors and governors and Presidents who are willing to stake out reasoned positions on issues (most of which are actually ideologically neutral), willing to explain their reasoning to the public, and willing to go to bat for them.

The context of Marshawn’s column was the upcoming mayoral election in Indianapolis, where a reasonably popular Democratic incumbent will run for re-election in a city that is reliably blue. Here’s the paragraph that caught my attention.

Personally, I think the mayor’s popularity is deceptive, and perhaps even soft in the Black community, and our times do not favor political moderates. The mayor didn’t show up on mass transit, the IPS referendum and was late on living wages for city workers. Mass transit was the biggest policy issue that could impact social mobility in a generation. He didn’t lead here. IPS is not called Center Township Public Schools — it’s called “Indianapolis” Public Schools. When the mayor’s Office of Education Innovation is approving charter schools they are happening in the IPS district. He was wrong to not weigh in on the referendum. While he eventually got around to supporting living wages, Black Democrats, who really need to speak out more, argued that a balanced budget couldn’t happen on the backs of workers. Each of these issues were rallying cries within the community and he missed them — bipartisanship and a balanced budget don’t drive people to polls.

I think Marshawn has confused a fear of staking out a leadership position (and thus becoming a target for criticism) with philosophical “moderation,” but the rest of his indictment is spot on.

Reluctance to exercise leadership is a liability, and not just within the Black community.

Another excellent example of this mayor’s allergy to getting “out front” of important issues involves the State DOT announcement earlier this year of its plans to “repair” the interstates that carve up Indianapolis’ downtown. The state’s plan would double down on ungainly remnants of a fifty-year-old bad decision that  impacts walkability and intrudes on five historic neighborhoods. A significant number of residents and businesses have come together to make the case for rethinking those highways; I’ve previously posted about the details of the “rethink” arguments.

Favoring a particular configuration for downtown interstates is not politically conservative, liberal, progressive or moderate.

The Mayor was finally persuaded to write a letter to the state’s DOT, supporting the ReThink plan, but has otherwise been invisible on the subject–just as he was invisible on mass transit and the IPS referendum.

It’s highly likely that political calculation drives this reluctance to engage; after all, when you take a stand, someone will disagree. Why take a chance of pissing people off when the political landscape looks advantageous–when the odds of re-election are in your favor?

On the other hand, that impulse to win office by “laying low” raises a question: why do politicians run for offices like mayor and governor if they don’t have a vision for improving their city or state? Why do they seek office if they aren’t interested in leading their communities in a particular direction? Do they view these offices merely as stepping-stones to something else?

Timidity isn’t the same thing as bipartisanship. It isn’t the same thing as moderation, either. Inaccurate labels just confuse the situation.

 

 

Home Advantage

I’m not ready to move on from the subject of yesterday’s post, which was triggered by the efforts of numerous cities to lure Amazon’s second headquarters.

Let me just share two additional observations, one from a recent study reported in Governing, and one emerging from a recent argument in Indianapolis’ City-County Council.

The Governing article shared a study done by the Urban Institute.

In choosing New York and D.C., Amazon opted for two cities that have led the economic expansion since the end of the last recession in 2009, far outpacing the rest of the nation in job growth. The decision drew the ire of politicians at the state and federal levels, along with others who had called on the tech giant to place its second headquarters in a city where it could play a more transformative role in the economy.

Yet a new study from the Urban Institute suggests that landing such a large corporation isn’t actually the best way to build a local economy and spur job growth.

If give-aways massive enough to “steal” large employers–to lure them from City A to City B (in what certainly seems to be a national zero-sum game) isn’t a sound growth strategy, what is?

Instead, the report says, cities should focus on growing existing local firms, not trying to lure out-of-town companies and poaching firms from other cities. “Most job expansion and contractions come from birth and deaths of homegrown businesses or expansion or contractions of existing home-based businesses,” says Megan Randall, a research analyst with the Urban-Brookings Tax Policy Center and a co-author of the report.

According to Randall, when so-called “marquee companies” locate in a new city, they tend to displace existing businesses, especially mom-and-pop stores. Supporting and expanding homegrown enterprises has been a more successful strategy for adding job growth.

Worse, giving up tax revenues to lure a new company puts a strain on local services, particularly schools.

As New York University business professor Scott Galloway put it in an email to Barron’s on Tuesday, the tax incentives from New York amount to “an elegant transfer of funds from municipal school/fire/police districts to Amazon shareholders.”

Cutting into services and school budgets makes the local workforce less attractive in the long run, and the location less alluring, the Urban Institute report notes….

Cities would be better served, according to Randall and other economic policy analysts, by improving schools and public services, and focusing on nurturing their existing network of businesses.

When a city offers tax giveaways to lure a company, the government goes into the negotiation with a marked disadvantage because of what economists call “information asymmetry.” The city doesn’t have all the information about what the company is looking for. In some cases, a company may choose a city it would have moved to anyway, pocketing the tax incentives even though they weren’t a deciding factor.

“Firms are in a advantageous position,” Randall says. “They know cities want to attract jobs and create opportunities for their residents. They know they are in the position to leverage a public benefit from what they have to offer.”

What the article calls “negotiation” is more often–and more accurately–described as extortion. And that brings me to a recent dispute in Indianapolis’ City-County Council.

Corteva is a company formed last year, as part of Dow Chemical’s mega-merger with DuPont. Delaware-based Corteva—which includes the local operations of Dow AgroSciences—is set to be spun off as a public company in June 2019, and it employs about 1,400 workers in Indianapolis.

The City-County Council approved 30 million dollars to “incentivize” the company to maintain operations in Indianapolis.  Most Councilors weren’t happy about it.

The incentive deal authorizes the issuance of $30 million in economic development revenue notes to Corteva from the city of Indianapolis, which would be paid back with about $5 million annually in tax increment financing funds that the city had been passing through to government units such as schools, libraries, parks, police and fire protection. Those entities would no longer receive those funds while the notes are being paid off.

The council voted 18-7 to approve the deal. Democrats Zach Adamson and Stephen Clay voted against the plan as did Republicans Jeff Coats, Danielle Coulter, Janice McHenry, Jefferson Shreve and John Wesseler.

Even council members voting yes weren’t happy.

“It’s not the best deal; I’m not excited about it,” said Democrat Jared Evans. But he said the long-term benefit of keeping the jobs in the community outweighed the short-term harm to the taxing units.

Zach Adamson characterized the incentives as “nothing short of extortion;” he was exactly right. Far too much of what passes for “economic development” is better described as bribery and/or blackmail. “What will you pay us to come?” and “What will you pay us to stay?”

These deals steal money that would otherwise be used to improve the local quality of life. And as the Urban Institute study reaffirmed, the quality of life–good schools, good parks, convenient transportation, effective public safety, etc.–is what really drives job growth and economic development.

When you rob Peter to pay Paul, you just make both of them poorer.

 

Penny Wise, Pound Foolish: Zillionth Example

Today I’m delivering a brief Treatise on Government (apologies to John Locke…)in the form of a case study.

Fifty years ago, when interstates were first constructed, two were built through an Indianapolis downtown that had been largely abandoned for the suburbs–a downtown dramatically different from today’s vibrant city center. The routing decisions made at that time divided neighborhoods, exacerbated public safety problems, and delayed the ensuing commercial and residential redevelopment of our downtown.

Fifty years later, those interstates and their bridges are deteriorated and require repair. The Indiana Department of Transportation (INDOT) has proposed to make those repairs, and in the process to further widen the interstate lanes and bridges and buttress them with enormous, dystopian concrete walls.

Thanks to the need for extensive and costly repairs, Indianapolis has a once-in-a-lifetime opportunity to dramatically improve a thoroughly dysfunctional system. A thoughtful revamping could improve traffic flow and restore community connectivity and walkability; it could also spur economic development that would significantly add to the city’s tax base. (Nothing to sneeze at, given our fiscal constraints.)

It is rare that a city gets an opportunity like this. Whatever decisions are made now will be in place for at least fifty to sixty years, so you would think that careful planning would be undertaken, to ensure that any project fixes current problems and is consistent with the city’s quality of life and transportation goals.

Thus far, however, both INDOT and the Mayor’s office have seemed disinterested in engaging in such a planning process, or considering anything other than a routine, “off the shelf” (and very expensive) repair and lane widening project that will simply lock the current problems into place.

In response to that disinterest, a group of planners, architects, landscape architects and residents who have made significant investments in the city center have come together to propose two potential alternatives to the currently proposed approach, and are urging INDOT to analyze and consider those alternatives.

Both alternatives would free up considerable acreage for commercial development that would add to the city’s tax base, while the plan currently being considered would substantially reduce the assessed value of a large number of properties, as well as the desirability of significant portions of downtown’s residential and historic neighborhoods. The alternatives would also mitigate noise and air pollution, which are a problem currently and which would be worsened by the addition of lanes.

When the current interstate routes were chosen, Indianapolis had no historic districts; today, those interstates disrupt five such districts. In our city, as elsewhere,  historic district designations have generated an enormous amount of investment. Property values have continued to rise due to the attractiveness, walkability and residential character of those districts.

We would be crazy not to protect these municipal assets.

Fifty years ago, mistakes were made. Indianapolis has a rare opportunity to correct those mistakes. It remains to be seen whether our city and state governments are willing to listen to the hundreds of residents and businesses that will be affected by the decisions being made–whether they will be responsive both to their citizens and to the data, and flexible enough to adjust a business-as-usual approach when the data indicates it will exacerbate those initial mistakes.

Why is this my “case study”?

I post a lot about national policies on this blog, and obviously, I think those policies are important. But decisions like those in my case study are where the rubber meets the road, as the saying goes. Everyday decisions, made by government agency employees and implemented by elected officials–Mayors and Governors–are enormously consequential for our day-to-day lives.

Providing disruptive and/or dysfunctional infrastructure, starving public schools of resources, failing to provide adequate public safety and other public services–all these things diminish our property values and degrade our quality of life. They’re important.

Hell, they’re critical.

Ultimately, that’s what governing is all about. It’s not glamorous.  It’s not about pomp and circumstance. It’s about the day-to-day grunt work necessary to provide a federal, state or local socio- political infrastructure that enhances the lives of citizens. I know Donald Trump doesn’t understand that, but most of the rest of us do.

Whether our state and local elected leadership recognizes the importance of these issues is an open question. When we know the answer, I’ll share it.

 

 


 

 

 

John Sweezy, R.I.P.

Last Tuesday, I got a text from an old friend telling me that John Sweezy had died.

The name John Sweezy won’t be a familiar one to most of the people reading this blog, but for many years, John headed the Republican Party in Marion County, Indianapolis, Indiana. John served as the Republican County Chair for twenty-eight years, and during those years, the local GOP dominated Indianapolis’ political life. Much of that political success was a result of his meticulous attention to grass-roots organization: making sure that each precinct had a committee-person who polled their neighborhoods and used the information to turn out the vote on election day.

Politicians today could learn an important lesson from that grass-roots emphasis, because those regular Republican victories under John’s management were despite the fact that registered Democrats outnumbered registered Republicans 3 to 2. (John used to say he was so grateful that “Democrats don’t vote.”)

But there was another, important reason so many people (even friends of mine who were Democrats) voted Republican. John consistently threw party support to competent, sensible candidates–people who understood municipal governance and wanted to do it well. He had nothing good to say about the then-emerging Christian Taliban, and he welcomed women and minority volunteers and candidates.

I know, because I was one of those women. I had been an active volunteer, working for Dick Lugar and Bill Hudnut, among others, when Hudnut decided to appoint me Corporation Counsel. No woman had previously held that position. John was supportive–in more ways than one. Not only did he approve of Bill’s choice to place a relatively young (33) woman at the head of the city’s legal department, he did something that now, in the wake of serial scandals, seems prescient: in a private conversation, he identified the men I should avoid being alone with! Later, when I ran for Congress, he was incredibly supportive.

I still remember a number of John’s favorite sayings. My own favorite was his mantra–and firm belief– that “Good government is good politics.”

He used to say that every citizen should be required to work for government for two years, and prohibited from staying in government for more than four. It was his way of acknowledging the problems government faces when citizens are ignorant of the operation of their government and the issues involved in managing a city or state–and the sclerosis that sets in when too many people have been in office too long. (John had trained as a mechanical engineer, and had served a stint as Indianapolis’ Director of Public Works, so his attitude was informed by experience.)

Later, when the GOP stopped being the party I had worked for, the party of people like John Sweezy, I became a Democrat, and only rarely saw or spoke to John. It was my loss. (Once, after he read a particularly snarky column I’d written, John called me to say he disagreed with my point, but that he still “appreciated” me. We made vague plans to have lunch “soon,” but somehow that never happened. My fault for letting the minutiae of everyday life interfere with the importance of friendship.) Now he’s gone–and so is the party he served so well.

I miss them both. R.I.P.