State of the Cities 2014 – Methodology

For the past four years, the National League of Cities has published an annual State of the Cities blog series analyzing mayors’ State of the City speeches. These blogs typically analyzed around 30 speeches and identified trends in city policy and leadership.

map-sotc-14This year, we decided to expand upon this project. To provide a more detailed and thorough analysis of the State of the Cities in 2014, we conducted a content analysis of 100 mayors’ State of the City speeches and tested for 10 major topics, including Economic Development/Jobs, Transportation and Education. We also tested for the prevalence of subthemes of each topic, such as “accelerators”, “entrepreneurship” and “workforce development” within the Economic Development/Jobs topic.

To establish a database of State of the City speeches, we used a web search to find every State of the City speech given between Jan. 1 and March 31, 2014, which had a transcript of the speech available online. We found 105 speeches that met the criteria and selected five speeches at random to be excluded from the analysis. The final 100 speeches represent cities with diverse populations and from varying geographic locations; there are at least 20 speeches from each of four population categories (<50,000, 50,000-99,999, 100,000-299,999, 300,000+) and geographic regions (Northeast, Midwest, South, West).

sotc-chart-14-fIn constructing the content analysis, we created guidelines for coding each of the 10 major topics. During this process, we referred to the work of Sarah Beth Gehl and Katherine Willoughby, who conducted a content analysis of State of the State speeches in 2013 . Through our content analysis, we were able to answer three main questions for each topic: the percent of speeches “covering” the topic, the percent with “significant coverage” of the topic, and the average percent of speech content devoted to the topic. We then analyzed these findings, as well as the prevalence of subthemes, with regard to the population and geographic region of the cities to provide further context.

Micah-headshotAbout the author: Micah Farver is an intern for the Center for City Solutions and Applied Research at the National League of Cities.

 

A Mayor’s Pledge to Support Successful Aging

This is a guest post written by Paul H. Irving, President, Milken Institute.

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This month, the Milken Institute’s Best Cities for Successful Aging Advisory Committee will ask mayors across the nation to sign a pledge that promises to improve life for older adults and residents of all ages.

Cities are at the front lines in addressing the consequences of the rapid, unprecedented aging of populations in the United States and across the world. Enabling successful aging is a central issue for urban communities and municipal leaders. The Best Cities for Successful Aging Pledge unites mayors around a commitment to enhance life for the world’s largest-ever population of older adults and ensure a better future for our cities.

The Pledge acknowledges both great challenges and great opportunities for city leaders. In conjunction with the second edition of its often-cited report, “Best Cities for Successful Aging,” to be released later this year, the Milken Institute will recognize forward-thinking mayors who sign the Pledge and celebrate their efforts to promote purpose and well-being for their aging residents. The “Best Cities” report, which compares the nation’s metropolitan areas on data-driven criteria, receives wide attention in major national and local newspaper, television, radio and social media outlets.

As we initiate the Pledge, the stakes are clear. By 2030 one in five Americans will be over 65, most of them living in urban environments. Worldwide, this older age group by mid-century will outnumber children under 14, due in large measure to declining birthrates and expanding longevity resulting from medical, technical and public health advances.

In the United States, older adults increasingly concentrate in America’s urban settings, where we see the emergence of Naturally Occurring Retirement Communities, or NORCs. These surroundings profoundly influence older residents’ ability to age well and enjoy healthy, engaged and fulfilling lives.

To improve lives through strengthened cities requires urban environments that are physically, economically and socially attuned to the well-being of mature residents. An age-friendly city optimizes health and security as well as engagement and productivity. It offers housing options and social services as well as opportunities for education, work, volunteerism and social interaction. These goals hold vast opportunity for our cities—and require new thinking as well as strong, committed mayoral leadership.

Too often we overlook older adults’ potential to improve society for people of all ages. We see only stereotypes of decline and disengagement. Mayors and other municipal leaders must promulgate the truth: Older residents can be an invaluable asset to their communities. We encourage government leaders to discard outmoded notions of aging that fail to consider this potential.

Older people today are healthier and more vibrant than in generations past. They have much to offer—not just the wisdom of age, but the practical experience and skills that can enrich families as well as work, educational and social settings. They offer a wealth of mentoring and training opportunities in the workforce, along with perspectives that enhance intergenerational teams. In encore careers and entrepreneurial ventures, they help drive economic growth. In education and volunteer activities, they contribute to society’s well-being.

Today’s mayors have a chance to help their communities reimagine what it means to grow older. With eyes open to 21st century reality, innovative officials can create environments that embrace the contributions of aging populations.

Through cross-agency efforts, cities will feature welcoming neighborhoods where age-friendly streets and shops encourage older people’s social engagement. Through upgraded infrastructure and communications, cities will enable people to age independently in their homes. By integrating health and social services into overall planning, cities will foster healthy aging. And through transportation and housing options, cities will promote mobility, safety and convenience, in the bargain enabling older adults to remain involved in their communities.

The role of mayors in this great urban challenge cannot be overstated. Leadership is paramount in championing a new model of aging that incorporates the many assets older people bring. Mayors’ ground-level experience with demographic transitions opens the door to solutions that can be replicated at the state, national and global levels.

Cities are economic engines and centers of purpose. Urban leaders can ensure that older residents contribute to the economy and strengthen civil society, applying their abilities and knowledge to keeping cities strong and vibrant. Our mayors can harness the benefits of longevity and embrace the upside of aging.

It’s time to make successful aging a priority in our cities. We look forward to celebrating the commitment and vision of mayors who sign the Best Cities for Successful Aging Pledge.

Paul-IrvingAbout the author: Paul H. Irving is president and a member of the board of the Milken Institute. Irving’s work to improve aging societies has been featured in outlets such as PBS Newshour, Forbes, CBS, NBC, CNN, The Los Angeles Times, USA Today and The Wall Street Journal. He is the recipient of the 2014 Janet L. Witkin Award from Affordable Living for the Aging. Irving’s book, “The Upside of Aging – How Long Life is Changing the World of Health, Work, Innovation, Policy, and Purpose,” was recently published by John Wiley & Sons.

State Incentives and Services for Entrepreneurs

This post was written by Ellen Harpel, founder of Smart Incentives and president of Business Development Advisors LLC (BDA), an economic development and market intelligence consulting firm. Post originally appeared on Smart Incentives blog.

NCSL-Report-Cover

Communities are increasingly supporting entrepreneurship as part of their economic development efforts, either as a complement to or replacement of business attraction strategies. State governments have created a variety of programs that communities and entrepreneurs can access as part of their local economic development toolkit.

Economic development groups increasingly use both financial and non-financial incentives (including specialized services) to support businesses in their communities.  A new report from the National Conference of State Legislatures (NCSL) describes a variety of state policies to support entrepreneurs, including financial incentives and other types of business services.

Capital and Incentives

  • Direct Investment — Quasi-public corporations provide venture capital to companies. Investments often have economic development goals (job creation or investment in targeted areas) as well as expectations of financial return.
  • CAPCOs — Certified Capital Companies (CAPCOs) are state-certified investment companies that sell insurance premium tax credits to insurance companies and use the funds to invest in start-ups. Returns are provided back to the insurance companies. NCSL reports that these have fallen out of favor due to the complex nature of the funding mechanism, lack of transparency and overly favorable terms to insurance companies.
  • Fund of Funds — State funds are invested in venture capital and private equity funds that will invest in businesses in the state and/or in targeted industries. States provide contingent tax credits to protect investors from losses.
  • Tax Incentives — Tax credits are available to angel investors who invest in start-up companies and/or venture capital firms. NCSL reports that many economists believe the credits are not effective since they are not likely to lead to investments that investors were not willing to make anyway based on the quality of the opportunity. NCSL also notes that data on the impact of these credits is “rarely available.”

Services and Other Policies

  • Simplifying the start-up process — one-stop centers for business licensing and registration; navigating state regulation
  • Integrating entrepreneurship into state economic development efforts
  • Promoting technology development, including tech transfer and commercialization programs
  • Developing entrepreneur networks to connect networks with each other, investors, customers, and other resources
  • Creating or supporting incubators (resources to support start-ups) and accelerators (for established businesses ready to grow)

About the Report

Promoting Entrepreneurship: Innovations in State Policy,” a Report by the NCSL Foundation Partnership on Jobs and Innovation can be accessed here.

In 2012, the National Conference of State Legislatures (NCSL) formed a new public/private partnership to examine the role of state policymakers in job creation and innovation through the NCSL Foundation. The partnership supports NCSL’s ongoing efforts to improve the quality of information available to state policymakers.

A key goal of the partnership is to improve the dialogue among state legislators, business representatives and other organizations interested in state policy decisions. The partnership convened a National Jobs Summit to bring state policymakers together with the private sector partners in September 2013 and is publishing a series of issue briefs on state policies related to job creation and innovation. Other briefs in this series include: “The State Role in Rebuilding the Manufacturing Sector” and “Workforce Development Initiatives: Collaborating to Prepare for Jobs of the Future.”

HarpelAbout the author: Ellen Harpel is President of Business Development Advisors (BDA) and Founder of Smart Incentives. She has over 17 years of experience in the economic development field, working with leaders at the local, state and national levels to increase business investment and job growth in their communities.

 

 

Contact Ellen at eharpel@businessdevelopmentadvisors.com or ellen@smartincentives.org. Follow Ellen on Twitter @SmartIncentives.

The YEF Institute: An Exciting New Chapter in NLC’s Leadership on Policy and Best Practice

This is the sixth post in NLC’s 90th Anniversary series.

Mayor-menino-yef

For decades, one of the hallmarks of the National League of Cities’ work has been a sharp and sustained focus on policy and best practice. Mayors, city councilmembers and other city leaders have come to NLC as a place of ideas – a place to debate key policy issues and to learn about what’s working (and what’s not) in communities across the nation.

With the launch of the Institute for Youth, Education, and Families (YEF Institute) in 2000, NLC added another chapter to this long legacy and an exciting, groundbreaking dimension to its portfolio of resources and offerings. As originally envisioned by former Boston Mayor Thomas M. Menino, the founding chair of NLC’s Council on Youth, Education, and Families, the YEF Institute serves as an “action tank” rather than a “think tank” as it helps municipal leaders address the needs of children, youth and families in their own communities. The YEF Institute works in five core program areas:  education and afterschool, early childhood, youth development, the safety of youth, and family economic success.

It’s hard to overstate the pivotal role that Mayor Menino played in the Institute’s creation.  By the end of his first term in office, he was already attracting national attention for his efforts to improve outcomes for children, youth and families. His efforts to quell youth violence – dubbed “the Boston Miracle” when more than two years passed in the mid-1990’s without a single youth homicide in the city – contributed greatly to the stream of city officials heading to Boston’s City Hall in search of guidance and advice. The Mayor was flattered by the attention, but also knew that he and his staff could not possibly serve as the “go-to” place on best practice for the entire country.

In response, Mayor Menino spent two years leading an NLC task force to examine the topic, developing the concept of an Institute focused on children and families, and raising start-up funds to ensure that the effort got off the ground. It simply would not have happened without his leadership and hard work.

And what a difference the YEF Institute has made. Over the course of 14 years, it has provided practical help and advice to hundreds of cities of all sizes and in every region of the United States. The YEF Institute has grown from an idea to a staff of 25, an expansion made possible by a strong reputation and track record that has attracted cumulative investments of more than $42 million from national foundations and other sources.

So much work remains to be done. The challenges facing mayors and other city leaders are enormous, and they have been exacerbated by a pattern of retrenchment and funding cuts at both federal and state levels. Municipal leaders largely understand that they will have to find or craft their own solutions within their communities, in many instances relying only upon existing resources.

That’s why it’s more important than ever for city officials to build upon lessons learned, replicating or adapting successful approaches while doing everything they can to avoid repeating mistakes that have already been made elsewhere.

I’m so excited and honored to be a part of this new chapter in NLC’s proud and storied history. New and emerging work in areas of health, early learning, postsecondary success, financial inclusion and connecting children to nature will keep the YEF Institute at the cutting edge of municipal initiatives that seek to improve outcomes for children, youth and families. And success in improving these outcomes is a key ingredient for the continued strength and vitality of America’s cities and towns in the years ahead.

CJohnson_Headshot_HiResAbout the Author: Clifford Johnson is the Executive Director of NLC’s Institute for Youth, Education, and Families.

Boston Youth Inspire Peers Nationally

This post was written by Stephanie Killiam, a summer intern for NLC’s Institute for Youth, Education and Families.

Volunteer-blog

The Boston Youth Zone deserves a huge spotlight for their historic involvement in the nation’s first ever youth-led participatory budgeting project. Last November, Boston’s former Mayor Thomas Menino challenged Boston’s Youth to decide how to spend $1 million of the city’s capital budget.

As a result of the challenge, the Boston Youth Council encouraged Boston’s youth and young adults to become involved in the decision for allocating the funds. The city’s adopted 2014 fiscal budget is set at $2.6 billion, allowing the youth community to take control of 3.8 percent of the city’s budget.

Boston named the nation’s first youth participatory budgeting process, Youth Lead the Change. The goal of the groundbreaking process is not only to encourage citizen participation in government funding but also to allow the youth voice to be heard. This project is founded on the belief that citizens, specifically youth, will show more interest initially and in the long-term when given the power to be engaged in community decisions. During the brainstorming process, youth and the community are educated on what projects would be eligible for capital funding.

The participatory budgeting process includes four steps:

  1. Community members brainstorm ideas;
  2. Volunteers translate the ideas into project proposals;
  3. Community members vote on most needed or most popular projects; and
  4. The projects with the most votes are funded.

In March 2014, a steering committee had seven brainstorming sessions allowing youth to voice their ideas on how to allocate the $1 million. Youth unable to attend the sessions could submit their ideas online. Youth volunteers, identified as “change agents,” compiled the online and youth assembly submissions for review. These change agents, with the help of contracted adult experts, worked together to research and design program proposals for the shared ideas. After completion of the program proposals, youth chose 14 of the best projects to advance to the community ballot.

For six consecutive days, beginning June 14, Boston youth residents ages 12 to 25 took to the polling stations. Each ballot listed a total of 14 projects in one of four categories: Streets and safety; Parks, Environment and Health; Community and Culture; and Education. Voters selected their favorite four projects, one per category. Boston’s youth community, ages 12 to 25, includes a population of approximately 150,000 residents. From this population the polling stations collected over 1,500 eligible votes.

The result of the first ever youth participatory budgeting process includes the selection of seven capital funding projects, an estimated budget and a description of the funding details. The selected projects are:

  1. Franklin Park Playground and Picnic Area Update ($400,000)
  2. Boston Art Walls ($60,000)
  3. Chromebooks for High Schools in East Boston, South Boston, and Charlestown ($90,000)
  4. Skate Park Feasibility Study ($50,000)
  5. Security Cameras for Dr. Loesch Family Park ($110,000)
  6. Paris Street Playground Extreme Makeover ($100,000)
  7. New Sidewalks for New Parks ($105,000)

The spotlight will continue to shine on Boston as youth councils and committees across the country anticipate completion of the Youth Lead the Change Participatory Budgeting improvement projects. Best practices for youth civic engagement efforts such as youth summits, youth councils/advisory boards, and voting youth positions on city boards and commissions, in the past have yielded many positive results.

To learn more about youth civic engagement and to network with youth leaders across the country, attend the 90th Anniversary Congress of Cities Conference and Exhibition in Austin, Texas, November 19-22, 2014. The Harnessing the Strenth of Millennials and Boomers in Your Community workshop will highlight how cities are engaging the millennial and baby boomer generations in decision making.

 

Supreme Court Preview for Cities

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Even though the Supreme Court’s next term won’t officially begin until October 6, the Court has already accepted about 40 of the 70 or so cases it will decide in the upcoming months.

For a more detailed summary of all the cases the Court has accepted so far affecting cities, read the State and Local Legal Center’s Supreme Court Preview for Local Governments.

Here is a quick highlight of what is on the Court’s docket right now that will affect local government:

Reed v. Town of Gilbert, Arizona and T-Mobile South v. City of Roswell will likely have the most impact on the day-to-day operations of local government. Reed deals with the constitutionality of the Town of Gilbert’s sign code while the Court in T-Mobile will determine what is required under the Telecommunications Act to deny a cell phone tower siting permit “in writing.”

To date the Court has only agreed to hear only one Fourth Amendment case. Heien v. North Carolina involves whether a traffic stop is permissible under the Fourth Amendment when it is based on an officer’s misunderstanding of the law.

Of interest to cities that operate jails, the issue in Holt v. Hobbs is whether a state prison grooming policy violates the Religious Land Use and Institutionalized Persons Act because it prohibits an inmate from growing a half-inch beard in accordance with his religious beliefs.

The Court has accepted three tax cases affecting local government this term. Comptroller v. Wynne involves the constitutionality of a state failing to offer residents a tax credit for all income taxes paid to another jurisdiction. Alabama Department of Revenue v. CSX Transportation involves whether a diesel fuel sales tax is discriminatory against railroads in violation of the Railroad Revitalization and Regulation Reform Act (4-R). And in Direct Marketing Association v. Brohl the Court will decide whether a challenge to the constitutionality of Colorado’s attempt to collect more tax revenue from online purchases can be heard in federal court.

No Supreme Court term would be complete without one Fair Labor Standard Act (FLSA) case. Integrity Staffing Solutions v. Busk ask the straightforward question of whether the time employees spend in security screenings is compensable under the FLSA.

While the question presented in Perez v. Mortgage Bankers Association sounds academic, this case will have a practical impact on local government. The issue is whether a federal agency must engage in notice-and-comment rulemaking pursuant to the Administrative Procedure Act before it can significantly alter an interpretive rule that interprets an agency regulation.

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About the author: Lisa Soronen is the Executive Director of the State and Local Legal Center and a regular contributor to CitiesSpeak.

Supporting Small Businesses through Economic Development Offices

This is a guest post written by Jason Rittenberg.

Bakery Square in Pittsburgh is a mixed-use redevelopment project of CDFA member Urban Redevelopment Authority.

Bakery Square in Pittsburgh is a mixed-use redevelopment project of CDFA member Urban Redevelopment Authority.

Incubators. Microlending. Accelerators. Crowdfunding. From rural areas to large cities, from the middle of the country to the coasts, today’s economic development entities — and their jargon — are all-in on encouraging small business finance.

Communities are increasing their support with good reason. Small businesses account for more than 99 percent of firms, 49 percent of employment and 42 percent of payroll in the country.[1] Further, small business lending continues to struggle out of the recession. While overall business lending is up nearly 25 percent from 2008, bank loans of less than $1 million remain down 14 percent over the same period.[2]

So communities are focused on helping small businesses, and from a constituent and need perspective, it makes sense for them to do so. But what does it mean to “help” a small business? For that matter, what is a “small” business? The answers to these questions are actually complex.

The U.S. Small Business Administration (SBA) defines a small business as having fewer than 500 employees, covering 99.7 percent of all firms. However, 90 percent of firms have fewer than 20 employees, and 62 percent have fewer than five. The difference in sophistication, goals and needs of a business with no employees is vastly different from a business with 10 employees, which is again exponentially different from a firm with 200 employees. Infusionsoft put together an infographic in 2012 to help illustrate these differences.

Given this variation, communities looking to support small businesses of any stripe need to think strategically about their economic development goals and needs before proceeding. Development finance programs require non-trivial commitments of resources to be effective and should therefore be entered into only as part of a comprehensive regional strategy. At the organization I work for, the Council of Development Finance Agencies (CDFA), we refer to this approach as the “development finance toolbox.”[3]

In the area of small business access to capital, CDFA has seen a wide variety of city and state programs be successful. Technical assistance, seed and venture capital, credit enhancement, and lending programs — as well as incubators, microlending and other trendy solutions — can all contribute to small businesses in different ways. The keys to success are to match the right program to real community needs and to find the right partners to assist in implementation.

Small business needs, foundational finance programs, and innovative support programs are all being covered as part of the Providing Small Businesses with Access to Capital forum being held in Kansas City, MO on October 8-9, 2014. Economic development, small business development, and other city staff are encouraged to participate in the event to learn about the latest and best practices for encouraging this critical sector of the local economy.

Rittenberg_HeadShot_blogAbout the author: Jason Rittenberg is the Director of Research & Advisory Services for CDFA. He oversees numerous projects, including the State Small Business Credit Initiative Coalition, and is the course advisor the CDFA Intro Revolving Loan Fund Course.

 

 

 

[1] U.S. Census Bureau. (2012). Latest Statistics of U.S. Businesses Annual Data. Retrieved 8/19/2014 from: http://www.census.gov/econ/susb/

[2] Simon, P. and Loten, A. (2014, Aug. 17). Small-business lending is slow to recover. Wall Street Journal. Retrieved 8/19/2014 from: http://online.wsj.com/articles/small-business-lending-is-slow-to-recover-1408329562

[3] Rittner, T. (2009). Practitioner’s Guide to Economic Development Finance.

Speaking Up: Tips for Young People to Advocate Effectively

This post was written by NLC summer interns, Priscille Biehlmann, Molly Coleman and Olivia Myszkowski.

2014-Pic-of-Interns-with-Sen-Franken

As National League of Cities summer interns, we recently had the chance to try our hand at federal advocacy on Capitol Hill. All Minnesota natives, we met with members of the Minnesota delegation to discuss NLC’s positions on immigration and education policy.

For young people invested in public service and political decision making, direct conversations with congressional staff and representatives can serve as a powerful learning experience. In sitting down with congressional staff, we were able to speak both as involved constituents and as representatives of the National League of Cities.

We were charged with emphasizing NLC’s commitment to strong federal-local partnerships in support of community school systems, along with the League’s support for comprehensive immigration reform. We also had the chance to spend time talking about our personal investment in these issues as Minnesota voters, and to hear feedback from staff about our representatives’ positions.

As we spoke with representatives and their staff, the importance of youth involvement in federal advocacy was reinforced time and time again. Minnesota 5th District Representative Keith Ellison was adamant that input from young constituents influences his votes in a meaningful way, emphasizing that one personal story from a young person often cuts to the core of an issue and resonates more deeply than numbers, charts and data can.

Speaking directly with elected officials at the federal level might seem daunting, but with the right approach, effective federal advocacy is possible even for the youngest of civic-minded citizens. If there is an issue that you’re passionate about, the following tips can help you productively communicate your thoughts with your representative:

  1. Be Punctual and Flexible. Be sure to arrive to the meeting 10 minutes in advance, but be prepared for last minute changes in scheduling. Members of Congress and their staff have hectic schedules, so it’s not uncommon for a meeting to be interrupted, delayed or canceled. On the other hand, the unpredictability of a congressperson’s schedule can sometimes be an advantage. Though our meeting with Rep. Ellison’s office was initially scheduled to be with one of his legislative aids, the Congressman had some space in between meetings to sit down with us for an impromptu discussion.
  2. Be Upfront and Personal. Be clear on what you are requesting and ask directly for his or her support. Reference the legislation you are addressing, including the bill number and title, if it is available. Describe why the issue is important to your community using specific and personal example
  3. Be Brief. Plan to have only about five minutes of speaking time to get your message across clearly and effectively. Because of the risk of interruption from votes, schedules running late or last-minute emergencies, that may be all the time you’ll have.
  4. Conclude Clearly and Follow Up. If any commitments are made, summarize them at the end of the meeting to ensure that everyone understands what has been decided. After you return home, e-mail the Congressional staff you met with to thank them for their time, briefly reiterate your position on the issue you discussed, and provide any further information the staff member may need.

As cities strive to have their voices heard on the legislative issues in front of Congress, harnessing the youth voice can be an effective way to stand out in the crowd. By incorporating young people into an advocacy strategy, cities can often make a more powerful, and therefore more memorable, statement.

Additionally, it is clear that young people have a unique perspective on many of the issues most directly related to city governance. Given the number of city services specifically targeting Millennials, from schools to workforce training programs to juvenile justice reform efforts, it is critical for local elected officials to not only reach out to this population, but to find ways to keep them actively engaged. NLC has many great resources to help you boost youth civic engagement in your city.

Members of Congress are there to serve their constituents, but these constituents often have to be willing to take the first step. By encouraging citizens, especially young people, to become actively involved at the local level, they are more likely to exercise the power of their voice at all levels of government. When city leaders take the time to energize and engage the youngest members of their communities, they are equipping an entire generation to be civic-minded and politically astute.

40 Years Later, Why Advocating for CDBG Still Matters

This is the fifth post in NLC’s 90th Anniversary series.

"Gerald Ford speaking into microphones, 9 Aug 1974" by O'Halloran, Thomas J., photographer.Leffler, Warren K., photographer.

“Gerald Ford speaking into microphones, Aug 1974″ by O’Halloran, Thomas J., photographer.

The Community Development Block Grant Program (CDBG) turns 40 this August, marking an important milestone for the National League of Cities (NLC) and other stakeholders. To observe the occasion, NLC has teamed up with the co-chairs of the Congressional Urban Caucus, Representatives Chaka Fattah (D-PA) and Michael Turner (R-OH), to support H.Res. 668, Supporting the goals and ideals of the Community Development Block Grant program. Additional cosponsors are welcome, and you can help.

The 40th Anniversary of CDBG is also an opportunity to reflect on how NLC’s views of the program have evolved over successive legislative campaigns. NLC has been a champion of CDBG from the very beginning, when President Gerald Ford enacted the program by signing the Housing and Community Development Act on August 22, 1974.

In the intervening years, NLC has led numerous campaigns to turn back efforts to weaken or eliminate the program. Although campaigns to “Save CDBG” have been successful thanks to the advocacy of thousands of local elected officials, NLC has taken a more nuanced view of legislative proposals regarding program flexibility over CDBG’s 40 year history.

CDBG was conceived and enacted in the 1970’s, following significant social upheaval and ongoing disparities within cities and towns. The program replaced 7 previous federal programs – Urban Renewal, Model Cities, Water and Sewer Facilities, Open Spaces, Neighborhood Facilities, Rehabilitation Loans and Public Facility Loans[1]. NLC advocated in support of the consolidation and rallied support for the new CDBG program[2].  There were many reasons for this, but two stand out.

First, many of the programs CDBG replaced, like Urban Renewal, had become racially divisive within communities and highly politicized within Congress. Second, CDBG replaced several highly targeted programs with one flexible program that provided local officials with a greater degree of local control over federal funds. Upon signing the bill, President Ford expressed this second reason by saying “this bill will help return power from the banks of the Potomac to people in their own communities. Decisions will be made at the local level.”

At some point in the 1980s however, NLC’s leadership was concerned that the pendulum was swinging too far in the direction of flexibility and actually came out against a proposal to eliminate the requirement that CDBG primarily benefit those in low and middle income brackets. NLC’s President at that time, Cleveland Mayor George Voinovich, who would go on to be a U.S. Senator from Ohio, testified to Congress that, “without meaningful guidelines and review by HUD of a city’s compliance with the primary objectives of the Act . . . pressures to fund a wide range of unfocused activities will be very severe.” [3]

He put it more bluntly in an UPI interview, “we insist the program be used for low and moderate income people.  Otherwise it becomes revenue sharing and then it disappears.  It is money meant to rebuild our cities.  It is not meant to meet a lot of other needs.”  Mayor Voinovich proved correct when general revenue sharing was eliminated in the late 1980s.

NLC was almost too successful, however, in turning back the proposal to drop CDBG targeting requirements. By the 1990s NLC had refocused on increasing flexibility and local control under the CDBG program. A survey of NLC members in 1994 showed that local official’s views on CDBG were evolving again.

On a question about local community development, a majority of respondents said the primary goal of community development was to improve the tax base. Poverty alleviation was secondary.[4]

More recently, questions of program flexibility have receded as successive budget crises have resulted in significant funding cuts for the CDBG program. Still, in the 2000s, NLC lead two successful campaigns to turn back Administrative proposals to eliminate CDBG by means of consolidation. And despite recent program cuts, CDBG continues to stand out as one of the few federal programs to maintain a significant bipartisan base of support.

Moreover, it has remained sufficiently flexible to be repurposed to meet contemporary challenges. The CDBG program proved effective for local efforts to overcome the recent home foreclosure crisis and subsequent national economic downturn, serving in many instances as a crucial source of gap funding for projects and services that otherwise would have been cut from local budgets.

In addition to housing and infrastructure, CDBG is being used in ways entirely unforeseen in the 1970s, supporting economic development efforts that have led to much-needed job creation.

The next challenge to CDBG is not likely to be too far off. For 40 years, CDBG has funded thousands of projects and programs and not every project is a success. After 40 years, it’s almost inevitable that some funding would find its way to unscrupulous use.

With such an expansive history, it’s possible for CDBG champions and opponents alike to create further lists of projects that demonstrate the best and worst uses of the program. Program funding grows more challenging each year as well, as the percentage of the HUD budget required to fund housing vouchers steadily climbs. History suggests simply preserving the status quo is a formula for diminished returns.

My book signing will be at 10:00 and 14:00About the author: Michael Wallace is Program Director for Community and Economic Development at the National League of Cities. As a member of the Federal Advocacy team, Michael works closely with mayors, council members and municipal staff to represent local priorities in the areas of housing, community development and economic growth.

 

 

[1] Richard P. Nathan and Paul R. Dommel, Political Science Quarterly, Vol. 93, No. 3 (Autumn, 1978), pp. 421-442
[2] Timothy Conlan “From New Federalism to Devolution”, pp. 47-50
[3] Ferguson, Ronald F., Urban Problems and Community Development, p. 146
[4] National League of Cities. 1994. “Attitudes toward Economic Development and Poverty.”

Overtaxed? NLC Involved in State Income Tax Supreme Court Case

Every Supreme Court tax case comes down to an argument perhaps most familiar to small children: “it isn’t fair.” The State and Local Legal Center (SLLC)/International Municipal Lawyers Association (IMLA) amicus brief in Comptroller v. Wynne, which NLC joined, argues that the tax policy choice the Maryland legislature made is fair (or at least fair enough) and that state and local governments should be able to devise tax schemes without judicial interference.

In Comptroller v. Wynne the Supreme Court will determine whether the U.S. Constitution requires states to give a credit for taxes paid on income earned out-of-state.

Forty-three states and nearly 5,000 local governments tax residents’ income. Many of these jurisdictions do not provide a dollar-for-dollar tax credit for income taxes paid to other states on income earned out-of-state. A decision against Maryland’s Comptroller in this case will limit state and local government taxing authority nationwide.

The Wynnes of Howard County, Maryland, received S-corporation income that was generated and taxed in numerous states. Maryland’s Tax Code includes a county tax. While Maryland law allowed the Wynnes to receive a tax credit against their Maryland state taxes for income taxes paid to other states, it did not allow them to claim a credit against their Maryland county taxes.

Maryland’s highest state court held that Maryland’s failure to grant a credit against Maryland’s county tax violated the U.S. Constitution’s dormant Commerce Clause, which denies states the power to unjustifiably discriminate against or burden interstate commerce. Among other things, the Maryland Court of Appeals noted that if every state imposed a county tax without a credit, interstate commerce would be disadvantaged. Taxpayers who earn income out of state would be “systematically taxed at higher rates relative to taxpayers who earn income entirely within their home state.”

The SLLC/IMLA amicus brief challenges the Maryland Court of Appeals decision on several grounds. First, the power of state and local governments to tax the income of its residents, wherever earned, has been upheld repeatedly at the Supreme Court. Second, the scope of the “dormant Commerce Clause” regarding individual non-resident income taxes has not been clearly defined by the Court and should not now construed to mandate credits. Third, taxation is a legislative matter that should not usurped by the judiciary.

And finally, state and local governments must make complex policy choices and tradeoffs when devising a taxing system. If Maryland was required to provide a dollar-for-dollar tax credit, a neighbor with substantial out-of-state income would contribute significantly less to pay for local services than a neighbor earning the same income in-state, even though both take equal advantage of local services. And to counterbalance a dollar-for-dollar tax credit, a county would need to raise some other tax, which will fall disproportionately on some other neighbor and often be more regressive. Maryland’s choice to avoid these results “does not cross any constitutional line.”

Paul Clement and Zack Tripp of Bancroft wrote the brief. The National Conference of State Legislatures, National League of Cities, U.S. Conference of Mayors, National Association of Counties, International City/County Management Association, and the Government Finance Officers Association joined the brief.

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About the author: Lisa Soronen is the Executive Director of the State and Local Legal Center and a regular contributor to CitiesSpeak.