Congress Should Not Follow Paul Ryan’s Plan and Cut or Eliminate Job Training and Pell Grant Programs

By Neil Bomberg, Program Director

It is hard to understand, when one looks at the program outcomes for the Pell Grant program and the Workforce Investment Act (WIA), why House Budget Chairman Paul Ryan wants to cut or eliminate their funding.  Both appear to be helping Americans obtain the job skills and education they need for the 21st century workplace.

The U.S. Department of Labor reports that there is great demand for job training and job placement services.  Last year, more than nine million Americans received training and related services through the federally-supported workforce investment system – an increase of nearly 250 percent over the previous two years – and more than half of those individuals found employment in one of the toughest labor markets in history, in large part because of the assistance they received.

According to the U.S. Department of Education, nearly 10 million individuals relied on Pell grants last year, including many who were attending school while continuing to work full-time to support their families.

Critics argue that the outcomes for WIA participants and Pell Grant recipients — slightly more than half of WIA participants find jobs as a result of their participation in the WIA system, and 40 percent of Pell Grant recipients graduate from four year colleges after six years of study – are not sufficient to justify continued funding.  However, I would argue that these numbers are actually impressive when taken in context.

Fewer than 30 percent of all unemployed Americans can expect to find a job in the first month of unemployment, and that number decreases rapidly to less than 20 percent when one is unemployed for more than six months, according to the Brookings Institution.  Equally compelling is the fact that there is only one job opening for every four unemployed individuals, according to the Economic Policy Institute, suggesting that a placement rate greater than 25 percent is exceptional.  Yet WIA’s placement rate exceeds 50 percent.

Though the difference in graduation rates after six years for Pell and non-Pell students who enter four year institutions is significant – 55 v. 40 percent – the difference is explainable.  Pell Grant recipients are among the poorest students, and face significant financial challenges while in school.  Many cannot afford to complete their educations because of these financial challenges.  They are likely to be older than most students, which generally means that they have family and related obligations that non-Pell students do not have, thereby making it more difficult to complete college.  They are more likely to be first generation post-secondary students and come from families with very low academic achievement.  According to Inside Higher Ed more than 40 percent of Pell recipients come from families with a high school diploma or less as compared with non-Pell students where the rate is only 20 percent.  Conversely, 61 percent of non-Pell students come from families with a bachelor’s degrees or higher, as compared with 36 percent for Pell recipients.

Finally, if our goal is to ensure that more people than not have access to a post-secondary education, in large part so that they can compete in the 21st century economy, then Pell Grants are succeeding.  Over the past five years, the number of community college students receiving Pell Grants nearly doubled, according to the American Association of Community Colleges (AACC), and in the past academic year, the number of recipients increased by 21 percent.

From where I sit, these data suggest that the Workforce Investment Act and the Pell Grant program have, in very different ways, made significant impacts on the populations they are designed to serve, and from NLC’s perspective, warrant continued support.

Local Food – A Conversation for all Regions

“Do you eat food?”

This was the question posed by Jim Embry, Director of the Lexington Sustainable Communities Network and local foods “jedi” (according to those in the local ‘food-know’) at the beginning of the Fourth Annual Local Foods Summit held last week in Lexington, KY.

“Because if you eat food, you’re part of the food system”

And thus began the three day event bringing together local and regional government representatives, small business owners, university students, farmers, chefs, authors, members of faith groups, healthcare workers, community members, and media personalities.

I had the pleasure of participating in the summit as a speaker on the roles of local government in creating and enabling healthy, sustainable food systems. As someone who spends a lot of time looking at a range of issue areas within the broad, sometimes abstract field of sustainability, and continually searching for ways to illuminate the interconnections among social, economic, and environmental factors in clear, compelling, and concrete ways, the topic of food is particularly exciting.

Photo credit: Michigan Good Food; http://www.michiganfood.org

As Jim Embry’s introductory question simply states – we all share in and have a personal connection to the food system. The production, processing, distribution, sale, and even eventual disposal of food all directly relates to and I believe are emblematic of the tangled web of sustainability. These components, are all part of the food system (see image) which affects and is affected by a number of other systems: energy sources; water availability and resulting water quality; nutrient cycles; transportation and infrastructure for distribution and processing; local economies through the support of small business, public health and more.

Looking across the various components of the food system, opportunities for local governments to directly or indirectly contribute become increasingly evident. And even more encouraging is the growing interest and the level of local engagement in recent years around the topic of food. Community gardens, farmers markets, healthy corner store initiatives, changes to zoning codes, and – a source of numerous city council debates – urban chickens, bees, and goats, have all been at the center of many urban sustainability discussions. As discussed in the NLC guide “Developing a Sustainable Food System,” several cities such as Cleveland, Ohio, Seattle, Wash., and Minneapolis, Minn. have been strongly involved in facilitating urban food production and access to healthy foods.

While the work currently happening within cities and towns to facilitate food access and promote smaller-scale production is vastly important, too often these conversations and plans are not fully connecting with the larger-scale food producers, processors, and distribution centers in rural communities. A particularly important insight I took away from the summit was the need and important role that local and regional government engagement can have in connecting-the-dots across urban and rural landscapes to address, support and strengthen all aspects of the food system.

At a roundtable discussion on regional food planning, farmers, processors, and local businesses discussed challenges they are facing in maintaining local production in rural areas. Topics ranged from lack of connected aggregation, processing and distribution infrastructure, to conflicts in balancing “true cost” against affordability, and issues of public engagement, awareness, and support for local food systems (just to name a few).

While the discussion raised some difficult and complex issues, several take away messages and recommendations also emerged that may be helpful for other communities to consider:

  • Recognize that local food really depends on regional food systems. Regional and local governments, planning agencies, and other decision making bodies should be engaged together in understanding the complex interdependencies of the food system. Recommendation: Incorporate food systems as part of a comprehensive, regional planning effort as well as part of local economic development and sustainability strategies.
  • Begin where you are by knowing where you are. A regional assessment or inventory can be critically important for a community and region to understand the range of resources already available.  Recommendation: Develop (with broad community involvement) an inventory of assets such as local producers, aggregation facilities, processing facilities, food hubs or distribution channels, local businesses (stores/ restaurants/ markets), and institutions that serve large quantity of meals that could source locally (i.e. schools, hospitals, jails, senior centers). In many cases the use of GIS mapping tools can be highly valuable here.
  • A social connection to food and agriculture is falling out of many communities’ cultural heritage. The seemingly endless availability of inexpensive, pre-packaged foods that permeate our food landscape has contributed to a loss in appreciation and recognition for food as a social and cultural resource. Furthermore, younger generations are not pursuing traditional agricultural careers in adequate numbers to maintain cultural heritage and local economies depending on these trades. Recommendation: More direct education, awareness, and support channels to promote  opportunities (traditional and entrepreneurial) for food-related careers. Communities should also consider engaging resources such as local media as partners to foster a community conversation around food (disclaimer: Sunny Side Up Radio in Lexington had invited me to attend this summit; they have been doing terrific work in making food FUN through a weekly program dedicated to local foods).
  • Local and regional governmental bodies can be enormously helpful in supporting and strengthening healthy food systems – but they cannot and should not act alone. Recommendation: Addressing any and all pieces of the food system will require broad community support and engagement. Local governments can be especially helpful in convening stakeholders and facilitating dialogue and are encouraged to maintain an open process by which all groups can contribute and be heard throughout any decision making process.

I thank Sylvia Lovely from Sunny Side Up Radio and Jim Embry for their kind invitation to participate in this Summit and salute the terrific work that is happening throughout Lexington and the surrounding region to promote healthy, strong, and sustainability local food systems!

NLC Supports Senator Harkin’s Rebuild America Act

The following statement on Senator Harkin’s Rebuild America Act is from Donald J. Borut, Executive Director of the National League of Cities.

“The National League of Cities thanks Senator Harkin for introducing “The Rebuild America Act.” Since the beginning of the Great Recession, America’s cities and towns have asked the federal government to invest in a 21st Century economy by supporting infrastructure repair, modernizing our schools; supporting the hiring of teachers, first responders and other critical local government employees; and financing job training programs that will give Americans the skills needed for success in the new economy. Sen. Harkin’s bill provides this much-needed support, and would be paid for without raising the budget deficit. We hope that Congress will take the necessary steps in the next few months to advance this proposal and send help to where it is most needed: The Main Streets of America’s hometowns.”

The National League of Cities is dedicated to helping city leaders build better communities. NLC is a resource and advocate for 19,000 cities, towns and villages, representing more than 218 million Americans.

The Impact of Rep. Paul Ryan’s Budget on the Pell Grant Program

By Neil Bomberg, Program Director

I was deeply troubled by the impact House of Representatives Budget Committee Chairman Paul Ryan’s (R-WI) budget plan would have on the Pell Grant program, the federal program that provides needs-based grants to low-income post-secondary students.

Like the cuts proposed to the Workforce Investment Act, the Ryan budget plan would cut deeply into the funding of a program that was developed to provide disadvantaged youth and adults – 10 million per year according to Community College Week — access to the educational resources they need to develop the educational and workforce skills to compete in a 21st century economy.

How ironic when you consider that supporters of the Ryan budget plan say they want every American to have a good job – something that increasingly requires a post-secondary degree – and they want our nation to have the most robust and agile workforce in the world – something that requires a well-educated workforce.

So why does Chairman Ryan want Pell Grant program funding cut? 

Chairman Ryan asserts that Pell Grant funding is on an unsustainable path.  Yet the evidence seems to contradict this.  Costs for the program are projected to decline slightly in fiscal year 2013, and grow at a stable rate over the next ten years, according to the Office of Management and Budget.  And to ensure the stability of the Pell Grant program, Congress last year agreed to cut funding for the program by $56 billion over the next ten years, by reducing or eliminating Pell Grants for working adults and other non-traditional and disadvantaged populations, according to the Campaign to Invest in America’s Workforce.

What would the impact of the Ryan budget plan be on the Pell Grant program?

If the Ryan budget plan were to become law, the Pell Grant program would be destined to suffer the same funding fate as its cousin, the Workforce Investment Act.  Gradually, and over time, funding for the program would diminish sufficiently to render the program ineffective.  This would have a major impact on America’s workforce.  Sixty-six percent of all job openings between now and 2018 are expected to require at least some form of post-secondary education and training; if more Americans are unable to access post-secondary education, the shortage of workers with post baccalaureate degrees will rise to three million by 2018 according to Georgetown University’s Center on Education and the Workforce.

What would the impact of the Ryan budget plan be on low-income adults and households?

If a post-secondary degree is the key to a good and well-paying job, those without such a degree would be less likely to be able to find those jobs and support themselves and their families.  In such a scenario these individuals would be more likely to become dependent on private charities and public welfare programs provided by the federal government, states and local governments, including cities and towns, for their survival.

The State of the Cities in 2012: Economic Development Efforts

This is the fifth in a seven-part series about mayors’ 2012 State of the City Speeches.

Economic development strategies come in all shapes and sizes.  More importantly, what’s good for the goose is not necessarily good for the gander. We would not expect Biloxi, MS to have the same strategy as Washington, DC; and we would not expect Washington, DC to have the same strategy as Wyoming, MI. With each state, region, and city comes a different set of strengths and weaknesses and industries and specialties, which should drive economic development efforts. In the state of the city speeches NLC analyzed, three main economic development strategies shined through the rhetoric: increasing exports to global markets, fostering regional partnerships, and developing downtowns and small business.

Within the speeches, big city mayors were more likely to be focused on exports; medium-sized city mayors more likely to focus on regional partnerships; and small city mayors touted downtown and small business development. As always, though, there are exceptions to the rule.

Mayors Vincent Gray, of Washington, DC; Greg Fischer, of Louisville, KY; and Garrett Nancolas of Caldwell, ID took a proactive approach to economic development within a global context. Utilizing a grant from the Small Business Association, Mayor Gray’s administration launched Export DC, “the District’s first major small business export development program. The program will initially focus on emerging markets such as Brazil, South Africa, and Asia and is intended to “spur economic development and create good, high-paying jobs here in the District.” Mayor Fischer applauded the fact that Louisville was 1 of 5 cities selected for a Bloomberg Grant, which included “$4.8 million that is being used to create innovation delivery teams that are working to create export-oriented jobs.” Mayor Nancolas provides evidence that small cities can be globally-focused; Caldwell has been working to become a “foreign trade zone” to help local companies compete with their foreign competitors. Nancolas indicated in his state of the city speech that because of the zone, the city has “received verbal commitments from three companies who have said that once this is established they are very, very interested in developing here, building here, bringing jobs to the city of Caldwell.”

Regional partnerships and collaboration was another overarching economic development theme within the state of the city speeches. Like economic development as a whole, there are many different ways to approach regional partnerships; they can be comprehensive and ambitious, or simple and practical. What’s important is getting the right stakeholders to the table. Eugene, OR, as told by Mayor Kitty Piercy, developed a comprehensive “Regional Prosperity Plan” which involves stakeholders like the University of Oregon, local chambers of commerce, and regional counties getting together to encourage local financial investment, business planning expertise, and the development of a “new virtual one-stop shop for business.” Mayor Tom Barrett of Milwaukee, WI launched the Milwaukee Sustainable Manufacturing Initiative (ME3) with the help of 13 local, regional, and federal partners to enhance the competitiveness of the city’s manufacturers through “reducing material use and waste, and also (increasing) efficiency.” And Mayor Virg Bernero of Lansing, MI “forged a landmark agreement with DeWitt Township to develop the Capital Region International Airport… a powerful new magnet for economic growth.”

Lastly, the state of the city speeches revealed a focus on small business and downtown (core) development. While downtown development and small business conjures images of small town America, effective strategies with regard to these two aspects of economic development are applicable to cities large and small, urban and rural.  In Lakewood, CA, Mayor Larry Van Nostran signaled pride in the “Shop Lakewood-Stay Lakewood Loyal” campaign put on by the local chamber of commerce. And Mayor Dwight Jones of Richmond, VA is “forging ahead” with the city’s Shockoe Revitalization Plan, an ambitious undertaking designed to revitalize a core area of Richmond’s downtown which would stimulate small business development.

Signified by the various examples from the state of the city speeches explained above, there is no clear choice or “silver bullet” approach to economic development, but it is important to realize that cities can have a positive impact in the development of their local (and regional) economies. What’s clear is that cities are forging ahead to find economic development solutions that best fit their local needs and unique assets, whether it is access to global markets, fostering regional collaborations, developing downtowns and small business, or countless other strategies.

Read about this project in more detail in The State of the Cities in 2012 on Citiesspeak.org. Don’t forget to check back over the next several weeks for more discussion on the State of the Cities in 2012.

The Impact of Rep. Paul Ryan’s Budget on Federal Job Training Programs

By Neil Bomberg, Program Director

As I read through the budget proposed by House of Representatives Budget Committee Chairman Paul Ryan (R-WI), I was left wondering why House Republicans are so vigorously opposed to job training programs like the Workforce Investment Act (WIA).  This program – which helps private sector employers find and train skilled workers – is being vilified as wasteful, duplicative, and welfare-like, despite substantial evidence to the contrary from researchers and the Government Accountability Office (GAO).   Most confusing is the fact that these proposed cuts are coming at a time when more than 13 million Americans remain out of work and employers across America are complaining that the existing skills mismatch is preventing them from filling some 3.5 million jobs.

What does the Ryan budget mean for the nation’s Workforce Investment Act job training system?

If the Ryan budget were adopted into law, funding for federal job training programs that would help U.S. workers and employers obtain critical workforce skills would be virtually eliminated.  According to the Campaign to Invest in America’s Workforce (CIAW), the “Ryan Budget” would reduce the budget line that funds labor, health and human services, and education programs by more than $16 billion (22 percent) when compared to fiscal year 2012.

Why has Chairman Ryan proposed to cut funding for Workforce Investment Act job training programs?

Chairman Ryan argues for these cuts, in part, by suggesting that federal job training programs are duplicative and ineffective.  He cites a January 2011 report from the GAO  as proof. But this represents a fundamental misreading of that report; in fact, while the GAO found that a number of federal programs offer similar services the report clearly stated that “even when programs overlap, the services they provide and the populations they serve may differ in meaningful ways.” And, GAO recently affirmed the value of well-designed public-private job training partnerships, noting in a January 2012 report that these initiatives have helped to meet vital employer skill needs in communities across the nation while helping jobseekers get and keep well-paying jobs in high-growth and in-demand industries.

Chicago’s Path to Better Regional Competitiveness

The city of Chicago stands high on a number of rankings that consider benchmarks such as economic output, educational attainment, public transit assets and quality of place. The numbers are pretty consistent across a number of research studies including the most recent one conducted by the Organisation for Economic Co-operation and Development (OECD).

In the Territorial Review of the Chicago Tri-State Metro Region, the OECD points to some remarkable statistics. Chicago is the third largest economic region in the U.S. with an extraordinary array of institutions of higher education and an adult population with above average attainment of college degrees.  Job and commercial centers are linked to employees across the region through a very good public transit system.  Moreover, the city ranks high in quality of life thanks to high value arts and cultural institutions and plenty of parks and outdoor public space.

Nonetheless, Chicago has some significant drags on its growth potential; drags that shave one or two percentage points from the region’s economic output annually. For example, despite having one of the nation’s largest passenger transit systems, it remains woefully underfunded and highway traffic congestion remains a problem.

Second, while the region’s colleges and universities turn out plenty of graduates to support a growing nanotech and biotech industry, there is a wide skills mismatch among the large pool of labor who fail to graduate from high school. One result of this skills mismatch is pockets of severe poverty that are socially and economically isolated from the parts of the region that are thriving. Worse still are the overlapping and often counterproductive myriad of agencies and institutions in the region charged to deliver pieces of the workforce development services.

Much to the benefit of Chicago-region decision makers, the OECD has the capacity to view the tri-state area through the global lens and offer recommendations that draw on examples from places as diverse as Singapore, Melbourne, Malmo, Sweden and Manchester. By way of example, Manchester has an independent statutory local authority charged with planning, transportation and economic development for the entire region.

Beyond the workforce and mobility issues, the other area for focus is new venture capital. The city and region lags in new business start-ups suggesting opportunities for a public and private sector effort to seed venture capital funds.

The Chicago Tribune called the report “a dose of candor about its economic malaise” in an article reporting on the study. http://bit.ly/ysOkPC

“Fostering cooperation across state lines, given the fiercely partisan political realities obviously is a tall order,” said Lance Pressl, who led the project for the Chicagoland Chamber.  However, “many business, academic and research organizations already operate regionally and can lead the way toward greater coordination.”

The State of the Cities in 2012: Restoring Trust in Government

This is the fourth in a seven-part series about mayors’ 2012 State of the City speeches.

The economy is slowly recovering from the debilitating effects of the Great Recession to a point that maybe, just maybe, will allow mayors to breathe a little easier.  But they certainly cannot rest their feet on the desk, put their hands behind their heads, and wait for their cities’ fiscal health to come rolling back.  As reported in the most recent post in the State of the Cities series, cities’ fiscal challenges continue to be daunting.

As city leaders continue to combat these challenges, citizens see only the effects.  They are bogged down by huge governmental rifts at the federal level, rumors (entirely false) of increasing municipal defaults, and budget decisions that are hitting far too close to home in the form of cuts in jobs and services.

Novato, California, City Manager Michael Frank mentioned in his state of the city address a recent statewide survey from the Public Policy Institute of California.  According to the survey, only one in three Californians say they trust local government to do what is right.  The national picture looks far bleaker.  New York Times Op-Ed columnist David Brooks reported to a packed ballroom of city leaders last week at the NLC Congressional City Conference that today only 11% of the population trusts government to do the right thing most of the time.  These figures are far lower than they were several decades ago.

The connection between the economic downturn and the fact that citizens’ trust in government is at an all-time low is undeniable.  The tough decisions city leaders are making have had an inevitable but debilitating effect on the level of trust citizens once held for government leaders.  Evident in this year’s state of the city addresses, mayors know they must work hard to regain their citizens’ trust and promote good governance.

In his post about reframing innovation in cities, Chris Hoene noted, “Recent dialogue about improving governance has focused on transparency…” But, Hoene adds, efforts to improve governance have “been too focused on efforts to make government data available on websites. More openly available data is a small piece of improving governance.  Instead, we need to focus on strengthening local democracy and civic capacity by actually engaging the public in the process of governing.”  But because the level of trust has dipped so low, city leaders are finding that they must build from the bottom, first by being transparent about government activities, funds used and services provided.

Washington, D.C., Mayor Vincent Gray, for example, discussed Grade.DC.gov in his state of the city address.  Grade.DC.gov allows residents to provide feedback on city services using their smart phones. When this system is fully operational, it will provide a transparent, real-time grade for every District agency.

Citizens are demanding transparency and openness from their local governments, but, as Hoene states, establishing trust in government only begins with transparency.  In order to win back the trust that cities so unfortunately lost, city leaders must take another step up and engage their citizens directly in decision-making and problem solving.

In Baltimore, Mayor Stephanie Rawlings-Blake is using social media to engage the city’s residents through “crowdsourcing.”  A new interactive tool will move beyond displaying information on a website to synthesizing ideas submitted by residents and taking action on those that show promise for the city.  Citizens can see their ideas being realized, and are engaged with their city leaders to creatively solve problems.

This year’s state of the city addresses also show some efforts to establish trust among some of the nation’s most vulnerable but potentially influential populations.  In Washington, D.C., Mayor Gray is working to establish trust with the immigrant community by mandating that law-enforcement officials not serve as agents for federal immigration enforcement.  In his speech, he promoted Washington, D.C., as “One City”—a city that provides for and engages all residents, including immigrants.  In Caldwell, Idaho, Mayor Garret Nancolas established a Mayor’s Youth Advisory Council, which gives youth the opportunity to participate in the decision making process, letting them know that they are a valued segment of the city’s population.

In their speeches, mayors have shown that they are pairing advances in technology with a little bit of commitment to increase their cities’ transparency about governmental activities.  These efforts are the foundation of a stable base of trust among their citizens.  But transparency is not enough.  As mayors pull their cities out of fiscal distress, they must also work to pull their citizens’ level of trust in government up from the lowest it’s been in decades.  There is little place to go but up but plenty of opportunity to build.

Read about this project in more detail in The State of the Cities in 2012 on Citiesspeak.org. Don’t forget to check back over the next several weeks for more discussion on the State of the Cities in 2012.

Local Officials behind Growing Support for CDBG, but Process and Partisanship Remain Significant Challenge

For the 7000 cities and towns that receive Community Development Block Grant (CDBG) funds each year, directly or indirectly, concerns are growing that that the foundation for transformative community projects is beginning to crumble.  Over the last two years, Congress has cut funding for the CDBG program over 25 percent, from about $4 billion to $2.9 billion, which is divided among 1,200 cities and 50 states.  For a program with enormous, bipartisan support from leaders elected to local office, the recent drop in support from Congress, as measured by House and Senate letters on spending priorities, appears well out of step with hometown priorities.

Every year, Members of Congress are given a deadline to tell the House and Senate Appropriations Committee’s what programs, if any, they consider funding priorities.  Appropriators take these recommendations into consideration as they write spending bills.  Unfortunately, growing pressure to reduce the federal deficit has complicated the traditional processes by which Members of Congress signal support for programs.  In the case of CDBG, the number of Senators and Representatives willing to sign annual CDBG support letters to the Appropriations Committee has been shrinking.  Worse yet, the growing partisan divide threatens to pin the fate of programs like CDBG to just one party at the federal level, despite support across parties, demographics, and sectors at the local level.  The divide is reflected in how increasingly lopsided Congressional CDBG support letters have become.

Last week, however, marked a small turnaround in those trends thanks in large part to calls from local elected officials and state municipal leagues.  In the House, the Pennsylvania delegation led the way.  Congressman Robert Brady (D-PA) wrote and circulated a letter arguing for greater federal investment in CDBG grants at $3.4 billion for FY 2013.  Congressman Lou Barletta (R-PA) joined Brady as the top Republican to cosign the letter and, unlike last year, gave the request an important bipartisan boost in the House.  In total, 137 Members of Congress signed the Brady-Barletta CDBG support letter to the House Appropriations Committee, an increase of more than 50 compared to last year.

In the Senate, as in past years, Senator Patrick Leahy (D-VT) authored and circulated a letter urging Senate Appropriators to raise CDBG funding to $3.3 billion for FY 2013.  Senator Scott Brown (R-MA), responding to significant outreach from local officials and others in his state, joined Senator Leahy in signing the letter.  In total, 33 Senators signed the Leahy-Brown CDBG support letter to the Senate Appropriations Committee, a gain of 5 over last year.

The potential impact of the House and Senate CDBG support letters on FY 2013 funding depends on many factors, including how budget sequestration is dealt with.  And bipartisan support for CDBG remains much too lopsided.  However, lifting the trend in Congressional support for CDBG is a significant accomplishment and, more importantly, a necessary first step to reversing the downward trend in funding.

Another step, almost as important as supporting CDBG directly, is to ask if the overall funding level allocated to each Appropriations Subcommittee is adequate to fund federal programs at sufficient levels.  This overall funding level, called a 302(b) allocation, can largely determine the fate of federal funding for programs before appropriations bills are even written.  For instance, programs administered by HUD and the Department of Transportation are funded annually under one single 302(b) allocation.  In recent years, community planning and development programs like CDBG have not fared well in this division.  Rather than cut funding across the board for all programs when 302(b) allocations waver, Congress has, reasonably, chosen to maintain investments in job-creating transportation programs and sufficient funding for existing housing rental vouchers.  Generally, then, any overall reduction in funds necessarily fall on programs comprising the “UD” side of HUD, such as CDBG, HOME, and Sustainable Communities Grants.

Earlier this year, in an effort to provide Appropriators with the necessary additional resources to fulfill House and Senate CDBG funding request letters, NLC spearheaded a large coalition of HUD and DOT stakeholders to urge Congress to increase the overall Transportation-HUD 302(b) allocation.  A total of 178 organizations joined NLC on our 302(b) letter to Congressional Leaders.

That coalition of organizations, however, will only hold for a handful of weeks.  After the 302(b) allocation is announced, each of the 178 groups that found common ground on the overall DOT-HUD allocation will split apart to urge Congress to direct any resulting new funds to their organizations own unique top federal priorities.  Under this system, organizations that manage to beat the drum consistently for their priorities are more likely to succeed than those that advocate in fits and spurts.  In other words, anytime is a good time to remind your Congressional delegation what CDBG is behind in your hometown because at least 177 public interest groups are doing the same thing for other priorities.

NLC expects Congress to set 302(b) allocations sometime in the next three weeks.  Soon after, Appropriators will release their first drafts of FY 2013 spending bills, revealing funding levels for individual federal programs like CDBG.  After that, local leaders and stakeholders will have a small number of additional opportunities through amendments and House/Senate negotiations to impact funding for their priorities.

The letters and lists of those who signed can be found on NLC’s website at http://www.nlc.org/influence-federal-policy/advocacy/legislative-advocacy/city-leaders-urge-congress-to-support-hometown-investments-via-cdbg

The Latest in Economic Development – 3.22.2012

This week’s blog explores New Orleans’ revitalized entrepreneurial culture, presents an alternative read on manufacturing jobs data, explains a couple policies meant to jump start startup creation, and highlights the use of contests to spark innovative solutions. Comment below or send to common@nlc.org.

Get the last edition of “The Latest in Economic Development” here.

With the perception that venture capital is drying up for startups, states in the DC area are filling the void to provide capital.  Maryland is definitely leading the way in size and scope; last week, the state announced an $84 million fund that will be dispersed among startups and venture capital firms as part of its InvestMaryland program. Virginia’s fund, managed by its Center for Innovative technology, is much smaller at $6 million, but is larger than in previous years. The District of Columbia is also doing its part, developing the Certified Capital Company Program, which raised $50 million which will be divided among venture capital firms. While these funds may fill a needed gap in startup investment, they are backed by the tax-payer, which brings in an element of pressurized risk that is not inherent in private investment. (Washington Post) – Continuing this theme, see also this 2011 article from Governing.com that points out common pitfalls of government VC funds: low capitalization and short-sighted dispersion of cash to jump start entrepreneurship.

The conventional wisdom among economists that US manufacturing job losses throughout the 2000s were due to productivity gains may have been flawed by selection bias. While no hypothetical economist would go out on a limb and claim that the job losses were solely due to productivity gains, presidential advisers such Robert Reich (Clinton) and Glenn Hubbard (Bush II) explained they were the main reason. But a new look at the numbers suggests that the “state of US manufacturing is not as bad as the employment numbers make it look. Instead… it’s significantly worse.” Apparently, some of the data used to defend the productivity argument did not account for globalization factors such as cost savings from moving operations overseas and the emerging technology industry, of which the majority of products are assembled in Asian countries. (Washington Post)

In the aftermath of the Hurricane Katrina disaster, there wasn’t much hope for New Orleans, but thanks to Greater New Orleans, Inc., the Idea Village, and the New Orleans Downtown Development District, the city’s entrepreneurial spirit has bounced back. Evidence of this is the NOLAbound program, which was held last week. The program invites a group of “social media influencers” from around the country to immerse themselves in the entrepreneurial culture of New Orleans. Focusing on four industries (the arts, bioscience, digital media, sustainability), the program showcases New Orleans as a hot spot for potential entrepreneurial opportunities. (Fast Company) – Also, check out the Idea Village-organized Entrepreneur Week, another entrepreneurial event that brings venture capitalists, investors, business people, MBA students, and policy leaders to New Orleans to support the local entrepreneur community.

With Congress unable to come together on anything lately, a bill that has garnered bipartisan support recently has been the JOBS Act, which would allow crowdfunding and eases IPO regulations. While the bill has broad support in Congress, what would be its actual effect on the investment and entrepreneur environment? Eric Schurenberg explains that the bill will “make it a lot easier for start-ups to raise money and will lower the cost of going public,” but “while the democratization of capital formation sounds good as a theory, it will likely be messy in practice.” (Inc.) via (Innovation Daily)

In a complex and unpredictable world, and with a government strapped for cash, can open innovation contests save the day?  Over the last year, the Obama administration has encouraged ordinary citizens to solve complex problems through contests that provide nominal amounts of cash for the winners (see challenge.gov). Tom Kalil, Deputy Director of the White House Office of Science and Technology Policy, states that one of the advantages is that “you only pay when (the solution) is successful… so it’s a way for agencies to get more with less.” In the article, David Bornstein also mentions the Aspen Prize for Community College Excellence, which is a contest that determined which American community colleges were the most successful based on educational and labor-market outcomes. (New York Times)