Quick Hits 8-18-2011

Triumph of the City

Governing magazine contributor John Buntin recently published a review of Edward Glaeser’s Triumph of the City: How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier. The book is on my list; but I have not yet read it despite the positive reviews Glaeser has received.  Buntin’s review is a good teaser about the content of the book.  Buntin contrasts Glaeser’s approach with that of Jane Jacobs style of the 1950’s and 1960’s. Whereas Jacobs focused heavily on sustainability, Glaeser’s summarized premise is that cities are naturally efficient when left to development themselves without excessive regulation and management.  One item of local interest in Buntin’s review is that temperate winters (not population, industrial base, infrastructure, etc) is the number one determinant of community growth.

How Lean is Too Lean?

According to John E Peterson, 80 percent of government job cuts are at the local level, which many argue is already the leanest level of government.

Public Sector Compensation and Pensions

Girard Miller argues that the public sector is in for a long period of little or no pay increases in order to compensate for pension deficits.  There are many possible results from this trend including a continued exodus of highly-skilled and professional employees to the private sector.  Public sector pensions have become the number one target of “reformers” who point to funding gaps that have occurred recently due to both aging demographics and market downturns.  However, Miller points out: “In simplistic terms, even if one-fourth of all current and future public-sector retirees now alive were to experience a 15 percent “compensation correction” through pay freezes over five years, that would reduce a typical pension plan’s total liabilities by only 5 percent.”  My public sector compensation series – with the help of several experts –  from last winter provides much more context to the true differences in compensation between the public sector and the private sector.

Market Value Homestead Credit

I am pleased (with qualifications) that the Market Value Homestead Credit (MVHC) in Minnesota is finally getting some attention in the media.  Traditionally, the focus on state cuts have been on the Local Government Aid (LGA) program to cities.  However, the MVHC, which has been cut much larger than LGA in percentage terms (and finally eliminated for 2012)  previously flew under the radar.  Property owners should be aware of the impacts of the upcoming changes to the MVHC that will primarily impact business properties along with high-value homes.  I am surprised that various interest groups such as the Minnesota State Chamber of Commerce did not lobby harder against this change; as the elimination of the MVHC program essentially amounts to a de facto tax increase to businesses.  Read more about the MVHC in this NPR article.

Minority Rules

Freakonomics reports that a study from RPI indicates that new ideas only need about 10 percent acceptance to gain approval ultimately of the majority of the population.  This has vast potential consequences for public policy.  When minority opinions hold steadfast to their views, we often assume that they are in a defensive position psychologically, or that they are just plain stubborn.  Is there any wonder that gridlock is so prevalent in our public policy if simply holding one’s ground can eventually lead to victory?

Stat of the Week

Nearly 25 percent of toddlers have used a smartphone by age 2.

Quote of the Week

 “When the result of a meeting is to schedule more meetings, it usually signals trouble.” – Management Author Kevin J. Murphy via the B&G Report