More than money: Alternative incentives that benefit companies and communities

Construction in Raleigh, N.C.

Post adapted from Smart Incentives

Specialized services can complement financial incentives, while taking the concept of a partnership between business and community to a new level. Guest blogger Swati Ghosh, the International Economic Development Council‘s Director of Research and Technical Assistance, reports below on an interesting new paper addressing these and other alternative incentives.

Of all the tools that economic developers use to attract businesses to their community, incentives are the most controversial. Typically financial in nature, incentives are direct subsidies to businesses in the form of tax breaks, loans or grants. Proponents maintain that such subsidies are necessary to grow jobs locally as they reduce the cost, or risk, of doing business in a community. Critics, on the other hand, argue that there is no direct link between economic activity and such business subsidies, and some even suggest that they are a drag on economic growth.

Economic developers should closely follow an emerging alternative – programs and services that assist businesses but are not direct financial subsidies. Termed alternative incentives, these are investments in community programs that strengthen the business climate or that help a particular business in a way that benefits the broader community. They are a win-win: For businesses, alternative incentives can reduce the cost or risk of doing business in a community, yet communities retain these investments even if a firm shuts down or relocates to a different community.

IEDC’s Economic Development Research Partners program has developed a new paper focusing on alternative incentives. It is not an argument against the use of financial incentives; rather, it advocates for increased use of alternative incentives either alone or in conjunction with financial incentives. The paper, “More than Money: Alternative Incentives that Benefit Companies and Communities” (PDF), examines five categories of alternative incentives:

  • Talent/Workforce development
  • Real estate and permitting
  • Research and data
  • Networking and promotion
  • Infrastructure improvements

The paper is based on a survey of the IEDC membership to understand usage of over 40 different types of alternative incentives. It also includes several examples of organizations that have successfully utilized alternative incentives for business attraction and expansion, alone or in conjunction with other financial incentives. The paper concludes with recommendations for ways that economic developers can use alternative incentives effectively:

  • Focus on building relationships
  • Examine your organization’s strengths and utilize them creatively
  • Offer a wide spectrum of services
  • Bring along the key stakeholders
  • Focus on the needs of the community

As scrutiny, clawback provisions and other restrictions on the use of financial incentives increase, it may be beneficial to examine other options to support businesses. Alternative incentives not only stay in the community, but bring less of a burden in terms of monitoring and legal costs – benefits that every community and EDO can agree on.

90 Years of Helping City Leaders Improve the Local Business Climate

Seattle, Washington“How does a city government work with local industries, businesses, and institutions to keep them in the city and improve communications with them?” This crucial question was raised by Mayor Sam Schwartzkopf of Lincoln, Nebraska, in a 1968 article in NLC’s previously published Nation’s Cities magazine titled “You Have to Work to Keep Industry.” In today’s economic climate, the issue of business retention and expansion remains a prominent issue for city leaders and economic developers.

While many mayors and city councils across the country recognize the value of attracting new industries and businesses, there is also a growing emphasis on fostering local talent and supporting entrepreneurs and small businesses.

Mayor Schwartzkopf suggested back in 1968 that NLC members should consider adopting a city program he launched in Nebraska to personally visit local shops and companies and ask how the city can be of service to them. The Mayor and his team aimed to meet with as many of the city’s 300 firms as possible.

“Although the attraction of new firms and industries to any community is always extremely important, I feel that city government today must show its present industries that city government is deeply interested in them and that city government wants them to be interested in their city,” Schwartzkopf wrote in his article. “I strongly feel that city government must know what its industrial, business, and institutional leaders are thinking; what they would like to see done within the city.”

Some of the business assistance that Mayor Schwartzkopf provided as a result of his visits included providing increased police presence to an outlying industrial neighborhood, removing street parking to help reduce traffic congestion, modernizing street lighting, and dispatching city engineers to inspect the quality of a storm sewer near a steel company.

This type of support for the local business community is very similar to what we see today from cities involved in NLC’s Big Ideas for Small Business network. Our recent report on small business development highlights two key strategies for developing a business-friendly climate – proactively engaging the local business community and creating advisory councils with representation from small business.

As we highlight in the report, the city of Seattle’s Business Retention and Expansion Program (BREP) strives to retain and grow early-stage business through proactive outreach initiatives. The city staff who lead BREP aim to provide 250 businesses with direct assistance every year. The Seattle program has already helped hundreds of businesses find funding opportunities, select new site locations, and navigate government regulations.

In Cincinnati, the city formed a Small Business Advisory Committee (SBAC) as a mechanism for the local small business community to advise city officials on policies and programs. The SBAC voices the concerns of business owners and works in collaboration with city officials to find solutions to common problems. One of the city’s accomplishments since the establishment of the SBAC has been to streamline the permitting process by creating “jump teams” of city employees that work in coordination to assist small businesses.

While the economic landscape has evolved in many ways since 1968, Mayor Schwartzkopf from Lincoln knew back then what remains important today: getting the business friendly basics right is critical to supporting and growing local businesses. NLC is grateful to still be providing research, education and best practices about how cities can do just this.

From Low-Skilled to College Ready: Building Pathways for All Youth Who Drop Out- Part 3

Flickr: Gates Foundation

This post was written by Peter Kleinbard, a consultant who works with organizations serving adolescents. It is the third in a series on dropout reengagement, drawn from the case study: For Young Adults Who Drop Out: Pathways or Merely Stops along the Way? which details the work of two community organizations. The study is funded by the William T. Grant Foundation and The Pinkerton Foundation. To comment, write peterkleinbard@Verizon.net.

In the previous post I highlighted two programs for young adults who have dropped out of school and how they have gained flexibility by convincing funders to support longer periods of service. This post focuses on a major gap in serving youth who have dropped out, the quality of classroom work.

Many young adults drop out because of their struggles in the classroom. While our field has often focused on counseling and work experiences, further education is essential to achieve economic independence.

In the study, Dropping Out: Why Students Drop out of High School and What Can Be Done About It, Russell Rumbergpulls together leading research and concludes: “educational performance…is the single most important predictor of whether students drop out or graduate from high school.” Academics are highlighted again in a recent study that tracked a single cohort of New York City students from elementary through high school: “and only one in three of the students who failed to meet the third-grade [English Language Arts] standard [emphasis added] graduated from high school.”

While numerous factors may contribute to dropping out, such as those highlighted in America’s Promise Alliance’s recent report, disengagement stemming from academic struggles is nearly always central. For young adults to build skills in reading, writing, oral communication and math, they must become engaged in learning. When instruction is done well, young adults take pleasure in learning.

Interviewed youth affirmed research findings as to what keeps them engaged in learning:

  • High interest materials
  • Activities that feel tailored to them as individuals
  • A sense of control from knowing where they stand and what more they need to achieve
  • Caring staff who expresses belief in their success

A Model for Engaging Young Adults in Academic Study

In my study, Site A adopted a model developed by an intermediary rather than creating its own program. Community Education Pathways to Success (CEPS) integrates research findings from youth development with those from instruction and is designed to address the needs and strengths specific to young adults. In this guide, I focus on the literacy component, though the work in math is similar. (For purposes of transparency, I was involved in the development of CEPS.)

The program created a structure of progressively more demanding classes, so that a young adult who enters at any skill level can move up to college preparation. Teachers receive training and ongoing coaching in delivering instruction. For example, they are taught to use high-interest books at reading levels that enable students to experience mastery. Assessments are used both to place students in classes and to target specific skill gaps. Non-instructional staff are trained how to reinforce the work of instructors and meets regularly with instructors as a team to strategize about students. The emphasis is on consistent and systematic application in the classroom and other program components.

Classes are highly structured and therefore follow the same sequence of activities each day. Work is familiar and comfortable to students, even as it increases in difficulty. While focusing on instruction, the model reshapes the entire program as an integrated whole, addressing counseling, transition planning and other components.

Following an encouraging evaluation, the city in which Site A is based adopted the model and is funding several sites to implement it, adding a work experience component. These and other strategies are detailed in documentation about the model and a three-year evaluation of eight sites.

As readers know, the path to financial independence is long and uneven for many young people, especially those with poor skills. For students that desire immediate work experience, Site A’s staff tries to place them so that their work schedules allow continuation in education. In other sites, young adults who had gained solid work skills – carpentry or using common software – acquired jobs, though rarely steady, that provided income so that they could continue their studies. Although many returned, for others there were periodic hiatuses in their participation.

Our challenge as a field is to make sure that we support the hopes for success of young adults with engaging and effective programs. Some are ready to move ahead when they come to our doors; others will need time before they are ready to sustain their commitment. For practitioners, this requires flexibility, a high degree of commitment, and a determination to find and implement approaches with solid evidence of success.

Peter KleinbardAbout the Author: Peter Kleinbard is a consultant who works with organizations serving adolescents. From 2001 until 2010, he was executive director of the Youth Development Institute, a national intermediary based in New York City. He also founded the Youth Transition Funders, an affinity group for foundations.

Citizen Engagement Means More than Just Voting

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Democracy. In the very root of the word is the notion that it is the people who rule. It is engrained in all Americans that in our country, government is by the people and for the people. Of course, for this to be true, the people must be involved. Citizens must be actively engaged in every level of government if our country is to run as we believe it should.

In recent studies by the National Conference on Citizenship, it has unfortunately been discovered that this ideal is not being met. Citizens are not showing the levels of civic engagement that democracy requires, and that our cities need in order to flourish.

In one study on South Carolina, it was found that while the state’s citizens ranked highly for “traditional forms of political involvement” (voting in national elections and registering to vote), they were near the bottom of state rankings in other, more subtle forms of civic engagement: boycotting products, contacting elected officials, forming strong relationships with neighbors, discussing politics and participating in local meetings regarding matters of school or city policy.

In a separate study looking at Washington, D.C., the findings again made clear that just because members of a community vote, there is no guarantee that they are then engaged in the community in other ways. While residents of D.C. have consistently high rates of voter turnout, they are unlikely to have strong relationships with neighbors, rarely eat dinner with other members of their household and while they volunteer at rates higher than the national average (coming in at 32.2%), this still quite low compared to the number of voters.

Between the two studies, it was found that political and civic engagement, in almost any form, is strongly correlated to not only a person’s income, but also to their level of education. While the studies referenced here look at fairly large population areas (the state of South Carolina as a whole and the city of D.C.), in cities with higher numbers of low-income residents with lower levels of educational attainment, there are clear reasons for concern. As elected officials, it can be challenging enough to work with the many different voices that arrive at the table; it is next to impossible to work with the voices that cannot even be found.

Given that a strong community is one that works on behalf of all its residents, it is imperative that citizens from all walks of life exercise their right to be both civically and politically engaged. As new technology is being developed, it is becoming easier than ever to encourage citizens to raise their voice. Emerging apps allow citizens to express needs for city services in real-time and allow elected officials to engage with residents who might never step foot in City Hall.

textizen-blog

In Washington, D.C., the website “Grade D.C.” has been developed as a way for residents to provide feedback on the quality of city services and departments, from the public school system to the police department to the Department of Employee Services. In allowing the community to assign a grade to the work being done by government-run entities, not only do citizens have a voice to express their appreciation and frustrations, but they are able to see the feedback provided by others, and use that to make informed decisions as to the city agencies with which they choose to interact. By establishing this innovative online format to provide feedback to the city, leaders in D.C. have created a non-threatening way to engage with citizens who may not be willing to go to City Hall, yet have a vested interest in ensuring that city services are provided smoothly and effectively.

In Philadelphia, a similar desire to engage citizens led to the creation of the tool “Textizen,” as one piece of the New Urban Mechanics movement. Now being used in both Boston and Philadelphia, Textizen permits residents to text in their thoughts and opinions on any and all city projects, dramatically increasing the number of voices that are able to be heard on any one issue. Taking this concept a step further, Boston has developed the “Citizens Connect TXT” program, which gives anyone in the city a way to notify the city of local problems, from graffiti in public spaces to unlit streetlights and other safety hazards. In providing a simple way for citizens to contact their local government, these cities are actively encouraging civic engagement on the part of all

As members of the National League of Cities push to see their cities become centers of innovation, it is important to remember the necessity of including all citizens in this push forward. This is by no means a simple job, yet cities around the country are showing that they are able to rise to meet the challenge by thinking outside of the box and truly valuing the many different voices in their communities. When city officials intentionally choose to harness the powers of technology, the ideals of democracy come closer to being achieved, even in a world that has changed immeasurably since our nation was founded.

Coleman PictureAbout the author: Molly Coleman is an intern with the National League of Cities University.

Privacy Please: Supreme Court Requires a Warrant to Search Cell Phones

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Warrantless searches of cellphones?  Simple question.  Simple answer.  No (generally).

In Riley v. California the Supreme Court held unanimously that generally police must first obtain a warrant before searching an arrested person’s cellphone.  The Court readily admitted that its decision will impact law enforcement’s ability to combat crime.  But the Court reminds readers that privacy comes at a cost and warrants are faster and easier to obtain now than ever before.

Police searched David Riley’s cell phone after he was arrested on gun charges and found evidence of gang activity.  In a second case, police arrested Brima Wurie for selling drugs and used his cell phone to figure out where he lived—where they found more drugs and guns.

The Fourth Amendment requires police to obtain a warrant before they conduct a search unless an exception applies.  The exception at issue in this case is a search incident to a lawful arrest.

In the 1969 case of Chimel v. California the Court identified two factors that justify an officer searching an arrested person:  officer safety and preventing the destruction of evidence.  Four years later in United States v. Robinson the Court held that police could search a cigarette pack found on Robinson’s person despite the absence of these two factors.  The Court noted that “[h]aving in the course of a lawful search come upon the crumpled package of cigarettes, [the officer] was entitled to inspect it.”

The Court declined to extend Robinson to searches of data on cell phones.  Applying the first Chimel factor the Court observed that “[d]igital data stored on a cell phone cannot itself be used as a weapon to harm an arresting officer or to effectuate the arrestee’s escape.”  The Court also was not convinced that destruction of data through remote wiping (third party deletion of all data) or data encryption (an unbreakable password) were prevalent problems.  Even if they were, law enforcement could address both of them.

To the argument that cell phones are “materially indistinguishable” from other items on an arrestee’s person that lower courts have allowed police to search without warrants, like wallets and purses, the Court responded:   “That is like saying a ride on horseback is materially indistinguishable from a flight to the moon.  Both are ways of getting from point A to point B, but little else justifies lumping them together.”  Cell phones are “minicomputers” with an “immense storage capacity.”

Finally, the Court stated that the exigent circumstances exception may justify a warrantless search, for example, “to prevent the imminent destruction of evidence in individual cases, to pursue a fleeing suspect, and to assist persons who are seriously injured or are threatened with imminent injury.”

This case will be discussed in the State and Local Legal Center’s (SLLC) FREE Supreme Court Review CLE webinar, register here, and the SLLC’s FREE Supreme Court Police Cases webinar, register here.

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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.

Utility Air Regulatory Group v. EPA: One Less Thing for Cities to Worry About

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Had Utility Air Regulatory Group v. EPA gone the other way it would be a big deal for cities.  But it didn’t.  Cities own many small stationary sources that emit greenhouse gases and will benefit from not having to obtain permits for them.

The Clean Air Act regulates pollution-generating emissions from stationary source (factories, power plants, etc.) and moving sources (cars, trucks, planes, etc.).  In 2007 in Massachusetts v. EPA the Court held EPA could regulate greenhouse gases emissions from new motor vehicles.  As a result of that case, EPA concluded it was required or permitted to apply permitting requirements to all stationary sources that emitted greenhouse gases in excess of statutory thresholds.

In Utility Air Regulatory Group v. EPA the Court held 5-4 that EPA cannot require stationary sources to obtain Clean Air Act permits only because they emit greenhouse gases.  But, the Court concluded 7-2, EPA may require “anyway” stationary sources, which have to obtain permits based on their emissions of other pollutants, to comply with “best available control technology” BACT emission standards for greenhouse gases.  Local governments own many small stationary sources that emit greenhouse gases and will benefit from not having to obtain permits for them.

The Court reasoned that permitting all newly covered stationary sources for greenhouse gas emissions “would place plainly excessive demands on limited governmental resources is alone enough reason for rejecting it.”  EPA’s regulations would increase the number of permits by the millions and the cost of permitting by the billions.  Small sources like retail stores, offices, apartment buildings, shopping centers, schools, and churches would be covered.  States, as permitting authorities, would bear part of the burden by having to hold hearings and grant or deny permits within a year.

To avoid the result described above, EPA issued the “Tailoring Rule,” which increased the permitting threshold for greenhouse gases from 100 or 250 tons per year to 100,000 tons per year initially.  The Court concluded EPA “has no power to ‘tailor’ legislation to bureaucratic policy goals by rewriting unambiguous statutory terms.”

Finally, Court held if a stationary source is already being regulated because of its emissions of other pollutants it may be subject to BACT emission standards for greenhouse gases. “Even if the text [of the Clean Air Act] were not clear, applying BACT to greenhouse gases is not so disastrously unworkable, and need not result in such a dramatic expansion of agency authority, as to convince us that EPA’s interpretation is unreasonable.”

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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.

Lane v. Franks Leaves Local Governments Holding their Breath

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The Supreme Court held unanimously that the First Amendment protects a public employee who provides truthful sworn testimony, compelled by a subpoena, outside the course of his or her ordinary responsibilities.

But what about the much more likely scenario:  An employee provides truthful sworn testimony, compelled by a subpoena, which is part of an employee’s ordinary responsibilities?  The Court explicitly says it doesn’t say.

Edward Lane was a program director at a public community college in Alabama.  He fired state legislator Suzanne Schmitz because she was on his payroll but wasn’t doing any work.  Lane testified about why he fired her at a grand jury indictment and two criminal trials that resulted in her conviction for theft and mail fraud.  Meanwhile, Lane’s program experienced “considerable budget shortfalls” and he was laid off.  Lane claimed he was fired in retaliation for his testimony in violation of the First Amendment.

The First Amendment protects public employee speech made as a citizen on a matter of public concern.  In 2006 in Garcetti v. Ceballos the Court held that when public employees speak pursuant to their official job duties they are speaking as employees and not as citizens for First Amendment purposes.  Lane v. Franks provided the Court its first opportunity to apply Garcetti v. Ceballos.

The Eleventh Circuit concluded Lane’s speech wasn’t citizen speech protected by the First Amendment.  Even though Lane wasn’t routinely subpoenaed as part of his official job duties, what he testified about he learned at his job.

The Supreme Court disagreed.  The Court described subpoenaed speech as “quintessential” citizen speech because anyone who testifies has an obligation to tell the truth.  And in this case it was undisputed that Lane’s ordinary job duties did not include testifying in court proceedings, meaning Lane wasn’t speaking as an employee when he testified.   “[T]he mere fact that a citizen’s speech concerns information acquired by virtue of his public employment does not transform that speech into employee-rather than citizen-speech. The critical question under Garcetti is whether the speech at issue is itself ordinarily within the scope of an employee’s duties, not whether it merely concerns those duties.”

As mentioned above, significantly, the Court did not decide whether the First Amendment protects truthful subpoenaed speech made as part of a public employee’s ordinary job duties.   As Justice Thomas pointed out in his concurring opinion, for some public employees like police, crime scene technicians, and laboratory analysts, “testifying is a routine and crucial part of their employment duties.”

Finally, the Court granted college President Steve Franks qualified immunity concluding that Eleventh Circuit and Supreme Court precedent did not preclude him for concluding that he could fire Lane because of Lane’s testimony under oath and outside the scope of his ordinary job responsibilities.

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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.