Tag Archives: boost

New Podcast on State Tax Climates

Inside State and Local Policy is featuring a new podcast with Kail Padgitt of the Tax Foundation discussing his new State Business Tax Climate Index:

The Index measures the competitiveness of the 50 states’ tax systems and ranks them accordingly based on the taxes that matter most to businesses and business investment: corporate income, individual income, sales, property and unemployment insurance taxes. Tune in to find out which states come out on top and bottom [guess which one New Jersey is?  –ed.], and what policy makers can do to boost their ranking.

Listen here:

Click here to download the podcast as an MP3 file, or click here to subscribe to Inside State and Local Policy via iTunes.

Are Bikes the Answer to Urban Traffic Congestion?

A South China Morning Post editorial suggests that if more Chinese urbanites used bicycles for their commutes, the severe traffic congestion in China’s cities could be eased. Currently, Guangdong is considering limitations on vehicle use to help reduce crowding on its streets.

Unlike mass transit and road construction that take time and money to construct, bicycles can offer an immediate respite from traffic for individuals. However, expecting government to create incentives for increased bike use may be unrealistic if they clash with car manufacturers and commuters:

Conflicting interests are difficult for any government to deal with. In the mainland’s case, it involves balancing a policy of using vehicle production to boost industrial growth with ensuring that cities are liveable and function properly. The car industry is the catalyst for a plethora of spin-off industries that boost job creation, meet consumer demand and lay the groundwork for export markets. But cities are where factories, offices and workers are located and they need to be efficient and safe.

While bicycle commutes in many cities can be faster than car commutes as observed in Birmingham, England, congested roads that are not well-designed for shared use of bicycles and automobiles often pose dangers to riders.

Vauban, Germany has instituted a unique, local solution to city transportation, creating a community where car parking is very expensive, and only available on the outskirts of town. CBS’s Jim Sciutto, in a Good Morning America segment, suggests that Vauban’s solution is representative of the “city of the future.”

The New York Times reports:

Vauban, home to 5,500 residents within a rectangular square mile, may be the most advanced experiment in low-car suburban life. But its basic precepts are being adopted around the world in attempts to make suburbs more compact and more accessible to public transportation, with less space for parking.

The article states that only 30 percent of Vauban’s residents own cars and suggests that many of them view this lifestyle as an improvement for their health and well-being. It remains to be seen whether this policy will be successfully adopted in other cities, but University of California-Davis Professor Jeff Loux suggests that this city’s policy could successfully be transferred to the United States, but adjusting to increased housing density would be a big change for many Americans.

Whether or not the Vauban policy is adopted by other cities remains to be seen, but it is an example of successful use in policy variation between cities. If increased bicycle were mandated or incentivized in Germany at the national level, it would be extremely costly with benefits accruing only to those who wanted to give up their cars for bicycles. Vauban was completed in 2006 after 20 years of planning, and all of its residents selected to live there with the knowledge of its policy environment; decreased car use was not forced upon any residents.

If any US communities opt to follow a model similar to Vauban’s, they should do it at the local level and follow their example of allowing residents the opportunity to live in car-free communities rather than implementing “the city of the future” from the top down.

The Super Bowl as Economic Remedy

It seems obvious that when a city is chosen to host a major event — political convention, Super Bowl, Olympics — this provides a natural economic boost to the city’s economy. If any city is deserving of such a boost it is New Orleans, which will be hosting the 2013 Super Bowl for the first time since Hurricane Katrina. (It will be the 10th time the city has been the site of the championship.)

And like many governments that find themselves chosen for a major sporting event, the Louisiana legislature is deciding if it should spend $85 million in Superdome upgrades. However, the boost is largely symbolic: while New Orleanians may feel a sense of pride over the selection, and the stadium will get another make over, economic gains are very likely to be fleeting and possibly negative.

Much academic work has been done assessing the impact of sporting events on regional economies. The findings generally show little lasting impact on host cities. Robert Baade finds the primary beneficiaries of taxpayer subsidies for stadiums are team owners, and players, not local residents.

That has not stopped cities from competing for the honor. 

University of Maryland economist Dennis Coates, writing in The American, finds since 1990 Major League Baseball has opened 19 new stadiums, the NFL opened 17, and the NBA over 20. These projects are highly subsidized on the federal, state and local levels, with the public bearing as much as 63 percent of the cost.  Coates and fellow economist Brad Humphreys find in an analysis of  of wages between 1969 and the 1990s in metro areas where these stadiums reside is that incomes actually decreased.

Why? Consumer spending on sports replaces consumption of other kinds of entertainment, and the spending patrons undertake has a relatively small multiplier effect in real the local economy. Athletes get the income boost. And to top it off, increased local subsidies to the franchise redirect tax revenues from other use, making the local economy less efficient.

While local and state governments might like to think otherwise, being chosen as a host city may be as much an economic drain as a publicity boon.