Book Review: Confronting Suburban Poverty in America

Inner-city slums.  Rural isolation.  The affluent suburbs.  For decades, these terms have demarcated the mental boundaries of our nation’s collective understanding of the geography of poverty and wealth in America.

Yet this geography has been changing rapidly in recent years – and neither our perceptions nor our poverty reduction policies are keeping pace.

In a new book published this week, researchers at the Brookings Institution document a trend of profound importance for municipal leaders and their communities: the rising share of poor Americans who live in the nation’s suburbs.

Confronting Suburban Poverty in America, co-authored by Alan Berube and Elizabeth Kneebone, shows that within the nation’s 100 largest metropolitan regions, the suburban poor population increased by 64 percent between 2000 and 2011, compared with a growth rate of 29 percent in central cities.  While urban poverty rates still remain higher, there are now more poor Americans living in suburbs (16.4 million) than in cities (13.4 million).

Although suburban communities can offer better schools, more affordable housing, or proximity to centers of job growth, individuals living below the poverty line may also experience a different set of challenges than the ones they would face in urban neighborhoods, according to the authors.  For instance, inadequate transportation places many jobs out of reach.  The nonprofit human service infrastructure – from child care to job training to emergency food assistance – is often concentrated in urban areas.

The authors make a convincing case that outdated federal policies hinder efforts to build the local capacity that is needed to address the dispersion of poverty throughout suburbia.  They identify more than 80 federal place-based anti-poverty programs that generally fund single-purpose activities within individual jurisdictions.  Organizations and governments that seek to meet multiple needs or collaborate regionally confront a myriad of regulatory hurdles.  As one example, the authors highlight a collaborative of 19 cities in the Chicago Southland suburbs that submitted a joint application for Neighborhood Stabilization Program funds to be more efficient and coordinated in addressing foreclosures.  Yet these cities were only able to obtain funding separately due to concerns expressed by overly cautious federal agency staff.

To modernize federal, state and local policies, the authors propose redirecting five percent ($4 billion) of existing place-based federal programs toward a competitive Metropolitan Opportunity Challenge.  This initiative would reduce barriers to and provide incentives for collaboration among governments and nonprofits in addressing challenges that span local borders.

While the authors often write through the lens of high-capacity nonprofits that are modeling this regional, integrated approach, they also draw on local government innovations, and many of their findings and recommendations will resonate strongly with city leaders.  For instance, city officials from suburbs and other smaller communities recently featured in NLC’s new report on “Municipal Leadership for Children and Families in Small and Mid-Sized Cities” identified a lack of resources and staff capacity, limited services and transportation, and funding streams that reinforce traditional silos as some of the top challenges they face in launching new initiatives on behalf of children, youth and families.  In communities such as Rapid City, S.D., the presence of what Berube and Kneebone refer to as “regional quarterbacks” – or entities with the capacity to serve as intermediaries – have been instrumental in facilitating progress.

The inflexibility of federal funds to support comprehensive, locally-driven plans has also emerged as a primary concern of municipal officials that have participated in a 13-city gang prevention network in California, many of which involve city-county collaborations working to blend and braid existing funding sources.  Federal initiatives such as the National Forum on Youth Violence Prevention hold promise for improving coordination of local services for youth and their families.

Other efforts cited in the Brookings book include HUD’s Sustainable Communities Initiative, which promotes regional housing, transportation and environmental planning, and the Department of Labor’s Pay for Success pilot, which leverages private investment to fund innovative strategies that achieve measurable employment outcomes for individuals with barriers to work.

While federal budget austerity (including sequestration cuts that fall hardest on key domestic discretionary spending programs) could make a broader restructuring of federal grants under the proposed Metropolitan Opportunity Challenge more difficult, the Challenge represents a bold and intriguing approach for better aligning the geography of the service delivery system with the new geography of poverty.  Readers will find that Confronting Suburban Poverty in America, grounded in detailed analysis, provides a carefully drawn road map for how the public, nonprofit and philanthropic sectors can channel existing resources more effectively.  The book has the potential to reshape our understanding of poverty in our nation’s communities as well as the steps that are needed to ensure that all families – regardless of where they live – have opportunities to thrive.

Food Trucks More Than a Passing Fad for Many Cities

In spring 2013, Masters of Public Policy students at The George Washington University conducted research on local policy options for food truck regulations for the NLC. This blog post is based on their preliminary report, which will be made available to NLC members as a policy toolkit in the coming months.

Food trucks have expanded rapidly in both numbers and popularity over the past few years, and many cities are finding themselves ill-equipped to deal with these vendors from a regulatory perspective. Communities across the country, from Los Angeles to Philadelphia, are part of a burgeoning movement to find ways to better manage and regulate mobile vending.

Food Trucks City ordinances related to mobile vending were largely written decades ago, with vendors such as ice cream trucks, hot dog carts and sidewalk peddlers in mind. Needless to say, food trucks are not your mother’s mobile vending experience. Most use large vehicles equipped with high-tech cooking equipment and sanitation devices to provide sophisticated, safe cuisine usually prepared to order (rather than pre-cooked).

So, what policy options do local governments have to regulate food trucks and incorporate food trucks into the fabric of a city?

City-specific solutions are definitely in order, but there are an emerging set of best practices to help tailor regulations so that both the city and the vendors realize the full spectrum of economic and social benefits that food trucks can bring to a community.  Our evaluation produced some overall recommendations for NLC members, including:

  • Conduct town hall forums and private meetings with core stakeholders
  • Encourage dialogue and the building of relationships among competing stakeholders
  • Identify private vacant lots to create partnerships for mobile vendors to gather and sell
  • Designate public spaces specifically for mobile vending

In addition to the above recommendations, pilot programs can be a useful way to determine what regulations to adopt. Las Vegas currently has a pilot program in place that sets aside a certain number of downtown parking spaces as food truck parking only, and has a lottery system in place for those spaces.

Regulations can also incorporate strategies that steer food trucks to underserved areas of a city to address equity concerns, encourage economic development and alleviate food deserts. Cities such as Denver and Cincinnati have recognized the need for a targeted approach that brings food trucks to parts of the city outside of the core business district. Denver has considered several issues that might impact or encourage economic development, including whether food truck clustering combats food deserts, where restaurant options are constrained and the ability of food trucks to activate underutilized space (like surface parking lots). Cincinnati has seven mobile food truck zones in strategic places around the city.

food trucks 2Due to their low start-up and upkeep costs, food trucks are proving to be an innovative way for entrepreneurs to create viable businesses, particularly as recent economic conditions have made it more difficult to start and operate a conventional restaurant.

The National Restaurant Association reports that they generated approximately $650 million in revenue in 2012– about 1 percent of total U.S. restaurant sales. And a recent research report by the Intuit Network predicts that food trucks will generate between 3 and 4 percent of total restaurant revenue – about $2.7 billion – by 2017, a fourfold increase from 2012. A 2011 survey by the research firm Technomic showed that 91 percent of respondents believe the food truck industry has staying power and is not a passing trend.

At a recent Food Truck Association event in Washington, D.C., food truck supporters had plenty of praise for the modern mobile vending industry. John Gaber, an urban planning professor at the University of Arkansas, noted that “food trucks are great things for communities; they provide more ‘eyes on the street’ for public safety and compliment the surrounding brick-and-mortar businesses.”

How will your city tap into these potential new sources of economic growth, entrepreneurship, equity, redevelopment, public safety, and community “flavor”?

Celebrating Train Day and Transportation Week

Celebrating Train Day and Transportation Week 

May is a month for celebrating transportation across the country.  National Transportation Week was held May 14-20 and Train Day on May 11.   For cities and towns, transportation is always a critical topic. Our multi-modal transportation network is essential to economic development and community vitality.

Amtrak and Train Day

communitiesOn Saturday, May 11, train enthusiasts across the country gathered at beautiful downtown stations to celebrate National Train Day and the value of Amtrak passenger services to communities.  The sixth annual event celebrated lots of good news for Amtrak:  an influx of revitalized downtown stations are boosting economic development, tourism, and historic preservation efforts in communities across America.  Amtrak is also celebrating ridership boots. Amtrak ridership and revenues are up for fiscal year 2012, with record ticket revenues of more than $2 billion and an unprecedented 88% recovery of operating cash costs.  Both short distance and long distance routes continue to show increased ridership. At 31.5 million passengers last year, only five airlines carry more domestic passengers than Amtrak.

Federal Investment

For every $1 in federal investment, Amtrak returns $3 back into the economy.  Amtrak has an annual payroll in excess of $1 million in 39 states.   But changes are ahead.  The Passenger Rail Reauthorization Investment Act, which authorizes federal support for Amtrak (the passenger rail corporation) expires this year.  Congress has started hearings to determine Amtrak’s future, funding levels and policy decision—and most important for Amtrak’s continued financial health—deciding the balance of funding for desperately needed capital and operating costs.

For a number of states, this summer will mean decisions on picking up the costs for short distance trains that are vital links to their communities.  Under Amtrak’s 2008 authorization, states will have to assume responsibility for 28 short-haul routes or end the services by October 1. The New York Times tells the story of one of these short haul lines in the Central Pennsylvania town of Huntingdon, with two Amtrak trains per day as the only transportation option for citizens not willing or able to drive to Harrisburg, the state capital, and larger cities in the Northeast. 

In the article Dee Dee Brown, Huntingdon’s (Pop. 7000)  mayor,  who often rides the train to Philadelphia said, “There is no bus service or airports nearby.  It’s just the train, and, quite frankly, we would be a ghost town without it.”

For the State of Virginia, “We see good rail service as part of our overall transportation plans to reduce congestion on the highways, and the routes add to the economic vitality of our communities,” said Kevin B. Page, the chief operating officer of the Virginia Department of Rail and Public Transportation.

500 communitiesNational Transportation Week and National Train Day celebrate the lifeline that Amtrak provides for Huntingdon, Pennsylvania and numerous rural communities.   For suburban and urban communities, roads, bridges and public transportation – including rail, buses, and streetcars – provide access to jobs, to school, to medical appointments and all the other places that citizens go to in the course of their daily routines.

But the debate continues to swirl about how to pay for everything.

Regarding Amtrak’s need to have states pick up the cost of the short-haul transportation routes,  Amtrak chief James Boardman told the New York Times “It’s what Congress has been doing for years, that is to push costs down to the state and local level..  It’s not going to be a windfall for Amtrak, but it will help reduce our costs.”

And that is the big question. The Senate debated a water resources bill this past week that will fund ports which help move goods from foreign places to every corner of the US.

Investment in Amtrak provides jobs in the communities the trains serve.   Brand new locomotives purchased by Amtrak for the Northeast Corridor will improve Amtrak’s performance and create jobs in the communities where they will be manufactured.

House Transportation and Infrastructure Committee Chairman Bill Shuster, identified transportation investment as a critical issue for Congress and said it the government’s responsibility to get these people moving efficiently to work and play.   Mr. Shuster’s committee will play a pivotal role in the debate on our national transportation system.   Reauthorization of the Water Resources Development Act, reauthorization of Amtrak and discussions on surface transportation programs which is up for renewal next year will focus on who pays and who makes decisions.

Local governments and their citizens are paying for transportation improvements and maintenance.  Ballot initiatives across the nation are raising billions in revenue to fund transportation projects.   We celebrated National Transportation Week May 14-20 and we must keep appreciating our national transportation network and all the components that move us and the nation.   Critical decisions regarding the funding of that network and the federal role will last beyond National Transportation Week but the benefits should be celebrated every day.

The Devil is in the Design Details: Strategies to Enhance Transit Experience

I live in a region that is nationally known for its traffic congestion.  In virtually every poll, newspaper article, or blog on the topic (google “DC region traffic congestion” for proof), the DC metro area is up in the ranks.  Somewhat under the radar are the initiatives taking place throughout the region to provide viable alternatives to residents who are desperately trying to avoid driving (and road rage). Of course, Capital Bikeshare has quite a reputation these days; it’s been so popular that a network that was once only in Washington DC quickly expanded to Arlington and soon will be finding its way to Montgomery County. However, less known is that since the region’s Transportation Planning Board adopted a regional complete streets policy, a number of local jurisdictions and transportation agencies have adopted and started implementing their own versions of it.  And in my own hometown of Washington DC, where we’ve had a complete streets policy for a few years, the Department of Transportation also recently started a campaign, “Move DC,” to develop a multi-modal, long-range transportation plan.

I write all this to say that in any given city and region, transportation departments are embarking on countless such initiatives to increase efficiencies and enhance user experience of transit.  And while these systemic efforts to coordinate and collaborate on a large scale is critical (we’ve discussed the importance of partnerships many a time), I think that perhaps the devil is in the design details.

According to Smart Growth America, nearly 130 communities adopted complete streets policies in 2012.  As part of complete streets, cities are encouraged to think about integrated, holistic roadway design that not only accommodates all modes of travel, but also serves residents with varied needs.  From aging populations to those with physical disabilities, residents have different demands of a street and of transit.  And regardless of whether or not a city decides to implement a complete streets policy, it is critical that these groups and their interests are represented in roadway planning and implementation processes to ensure that the “small” details (think: sidewalk and curb design; crosswalk timings) actually work for everyone. [Design (and plan) with everyone in mind]

Portland Multi Modal

Apart from the nuts and bolts of roadway design, cities are also looking into technology as a means to enhance user experience.  As part of the “Move DC” efforts, the city has tagged intelligent transportation systems (ITS) in their list of options to explore further.  ITS applications use ‘smart’ technologies to improve the efficiency, coordination and delivery of services, including roadway and traffic management.  Applications such as transit signal priority in Tacoma, Wash. and Chicago, Ill.; emergency vehicle preemption in Plano, Texas and St. Paul, Minn.; and red light enforcement cameras in Scottsdale, Ariz. and Raleigh, N.C. are some examples of the ways that ITS technologies can not only contribute to more effective, efficient, and safe transit and roadway systems, but also save cities money, time, and resources (this report gives more details on the examples listed). While ITS is a large umbrella under which a range of technology applications fall, cities have an opportunity here to identify those specific technologies that would be most useful to not only meet current transit demands, but actually account for and enhance future ridership.  [Design intelligently]

ITS or no ITS, cities can (and do) plan transportation better when the end user experience is thought about early in the planning stages.  Complete streets and intelligent transportation systems are only two umbrella concepts in a whole menu of strategies that transportation departments can turn to when attempting to create an integrated, effective system that is actually based on user demand and user experience.  These are meant to serve as inspiration, and perhaps examples of a larger idea that is best captured by the title of one of my favorite books on the power of design to improve lives: [“Design like you give a damn”]

Here at NLC’s Sustainable Cities Institute, we’ve spent the last several months curating and adding to the wealth of transportation resources already on our site, www.sustainablecitiesinstitute.org.  We’ve included more reports, guides and model policies on complete streets, bike share, and carshare, to name a few. Check out our new resources and, as always, email us at sustainability@nlc.org with any questions, comments or suggestions!

PEPTA: Why NLC Opposes this Bill

This is the fourth and final part of the series on the Public Employee Pension Transparency Act of 2013, also known as PEPTA.  

Why does the National League of Cities oppose a bill that ostensibly would bring greater transparency to public employee pensions, and ensure that they are fiscally sound and sustainable?

Simply put, the Public Employee Pension Transparency Act of 2013 (PEPTA), which was introduced in April by Rep. Nunes in the House, and Sen. Burr in the Senate, would represent an unwarranted and unjustified intrusion by the federal government in the activities and responsibilities of the states and local governments.

Since the Great Depression, when the Social Security Act explicitly exempted employees of the federal, state and local governments from participation in the nation’s Social Security system, state and local governments have provided their employees with public pension plans designed to provide their employees with some level of income support during retirement.

Each of the states and many of the localities developed these pensions in response to the specific needs of their employees.  For example, most local governments have one type of retirement for their public safety employees – who generally retire at a younger age than their civil service counterparts – and another type of pension for their regular employees.

These retirement plans were either incorporated into state constitutions or state laws that established strict contribution and pay out requirements, including the number of years such contributions must be made as well as the percentage that employers and employees will contribute.  And most importantly, these retirement systems were placed in public trusts that could not be used for any other purpose than to support and sustain the retirement benefits of former employees.

Every state and local retirement plan has been subject to the oversight of a board of trustees and the review of state and local elected officials, auditors and the public.  In addition, each retirement plan must report its financial status using general accepted accounting procedures that are prescribed by the Government Accounting Standards Board (GASB) which was established in 1984 to establish and improve standards of state and local governmental accounting and financial reporting that will result in useful information for users of financial reports and guide and educate the public, including issuers, auditors, and users of those financial reports.  Since then, most if not all, state and local governments have followed GASB’s reporting rules for public pensions.

In spite of this, or perhaps because of it, PEPTA would mandate a costly and complex layer of federal reporting on top of existing state and local accounting and reporting requirements; give federal regulators sweeping powers to impose duplicative reporting requirements on state and local governments; jeopardize state and local financing of infrastructure and other critical needs by stripping the tax exempt status of bonds issued by states and localities if they do not comply with regulators’ rules (even though historically state and local pensions are subject to state constitutions and state and local laws and regulations); and threatens far-reaching and unintended consequences for the municipal bond market and the economy as a whole.

If the bill became law it would falsely depict the true condition of state and local governments and their retirement systems. For example, it would require that state and local governments report their pension returns as if they invested only in low yield U.S. Treasury bonds, not the diversified portfolios actually in use, thereby implying a significantly larger unfunded liability than is actually the case.  Moreover, it would do nothing to increase transparency.  Public pensions are among the most transparent and open financial systems in the nation given their auditing and public review requirements.  Nor would it improve accountability.  Rather it would pre-empt a multi-year, multi-level effort by GASB that is now being implemented to ensure public pension transparency.

The claim by Rep. Nunes and Sen. Burr and their colleagues that public pension funds are “Often hidden by opaque accounting practices, the costs [for which] are driving an increasing number of states and municipalities toward insolvency, and therefore in need of federal intervention, “is wrong.  This bill is unnecessary, unwarranted and should not be adopted into law.

PEPTA: Linking State and Local Government Pensions and Municipal Bonds

This is the third in a four part series on the Public Employee Pension Transparency Act of 2013, also known as PEPTA.  

To “protect” the federal government from any responsibility for state or local fiscal problems, Reps. Nunes, Ryan and Issa, in the House, and Sens. Burr, Coburn and Thune, in the Senate, have introduced PEPTA, which if it became law, would prohibit the federal government from bailing out states or localities, and would force states and localities to meet certain federally established pension reporting requirements in order to maintain their right to issue tax free municipal bonds.  Failure to comply with the requirements of the Act would mean that states and localities would have to go to the taxable bond market to raise funds for infrastructure and other legitimate state and local activities.

So, if you thought that efforts to tax municipal bonds were the only legislative threat to the future of tax exempt municipal bonds, think again.

PEPTA would direct the U.S. Department of the Treasury to issue new public pension plan reporting requirements that public pension plan sponsors and administrators would have to follow when reporting their assets and liabilities.

Rep. Nunes, in a statement outlining the reasons for this bill, said that it was necessary for states and local pension plans to disclose their liabilities in a “uniform and transparent manner based on widely accepted accounting principles.”  Without these new and transparent reporting requirements, he added, state and local pension plans would continue to hide significant fiscal problems behind various and misleading state and local pension plan reports.

What Rep. Nunes did not state is that all public pension plans are subject to stringent state and local reporting requirements that are set in state statutes and local ordinances and regulations; that all reporting  must meet generally accepted accounting principles established by the Governmental Accounting Standards Board (GASB), which just this year issued new reporting requirements designed to highlight the unfunded liabilities associated with public pension plans; and that these reports are subject to review by elected officials, trustees, auditors, and the general public.

He also did not state that since 2008, 45 states have adopted legislation to reform their state and local pension systems.  These reforms were adopted to ensure the long term viability and sustainability of their pension systems and were done without any prodding or initiative by the federal government.

What he also did not say is that Wall Street bankers and investors, who until now have had little control over the nearly $3 trillion in public pension assets, are eyeing those assets as yet another pool of funds from which to draw substantial income.

PEPTA: A Bill in Search of a Problem

This is the second in a four part series on the Public Employee Pension Transparency Act of 2013, also known as PEPTA.  

Many members of Congress have expressed the belief that many state and local pension plans are about to fail, and that cities and towns across the nation are about to default on their municipal bonds.

House members and senators have introduced legislation designed to address this.  Known as PEPTA, the House and Senate versions of the bill would seek to insulate the federal government and the American taxpayers from any responsibility for public pension failures or municipal bond defaults.

Despite the fact that there is no evidence that either public pension plans are about to collapse or that states, cities or towns are about to default on their municipal bonds, these same members of Congress have decided that some type of federal action must be taken to prevent public pension plans from collapsing and municipal bonds from failing, and if it does, from impacting the federal government and the American taxpayer.  What they have proposed is to add a new and significant public pension plan reporting burden that is linked to the ability of a state, city or town to issue tax exempt bonds.

However, as has been the case before, the opinions of members of Congress and the facts do not agree.

Here are the facts:

First, states cannot file for bankruptcy.  They are sovereign entities, established under the Constitution of the United States, and as such have independent taxing and spending powers that they may use to balance their budgets and avoid insolvency.  Moreover, no federal law exists that gives states the power to declare bankruptcy or seek bankruptcy protection.

Second, while municipalities as corporations may file for bankruptcy under Chapter IX of the bankruptcy code, the rules of bankruptcy for cities and towns are highly circumscribed and may include limitations such as the requirement that the state legislature must approve any and all municipal bankruptcy filings.

Third, while states and localities have faced growing budget deficits due to the Great Recession, most have addressed these challenges by making tough spending cuts, raising taxes, and reducing overall employment.  In fact, Fitch, one of the three municipal bonds rating agencies, has said that states, cities and towns have done a significantly better job of addressing their fiscal challenges than the federal government.

Fourth, during this time unfunded pension and health care liabilities have grown because of the lower rate of return on investments and deferred annual contributions. However, since 2008, 45 states have modified their pension plans to help mitigate and ultimately eliminate unfunded liabilities, and numerous cities and towns have done the same.  Increasingly, data document that while still facing difficulties, state and local pensions are becoming increasingly viable and sustainable.

Finally, governors and other state leaders have declared their opposition to any congressional action that would permit states to file for bankruptcy protections.