Live blogging a “Curbside Chat”

I’m in Richfield at the Woodlake Lanture Center (there are a couple of stuffed ducks on the wall in front of me) listening to Chuck Marohn and Jon Commers of Strong Towns starting their Curbside Chat

A rapid fire-presentation about why cities are in financial trouble and not likely to get out of trouble without some substantial change – here’s the brief sketch

Mechanisms of Growth (sin

ce WWII) or how did we get to where we are today with collapsing real estate markets, too much commercial space, failing infrastructure and no money in the city budget?

  • Intergovernment transfer payments: cities have become dependent on higher levels of government funneling dollars down to the city.  Think “local government aid” from the state of Minnesota.  As we have learned, the state is not a very reliable source of income as the legislature has cut LGA steadily and the former governor unallotted funds at the 11th hour.  The Northfield has stated its goal to balance its budget without LGA and working to take the $2 million from the state out of our planning.
  • federal/state transportation spending: the needs over the next 20 years are projected to cost $65 billion but only $15 billion in revenue in Minnesota.  So, to bridge that $50 billion shortfall, Strong Towns estimates an $.83 per gallon gas tax would be needed.
  • Debt (public and private indebtedness): another mismatch of increasing debt out of proportion to any growth in GDP.  We built the first wave of suburban development (1950 to 1975) on the “layaway economy” (or paid for with cash on hand) to a leverage economy (1975 to present) where we borrow the money.  In governmental terms, we need new growth, new tax base, new borrowing to pay for our existing liabilities.

Growth ponzi schemes: Need a new overpass, new highway, new subdivision?  Find federal funding, MNDoT dollars, or private developers to put up the capital so it looks like a great deal up front.  Unfortunately, now the local government is on the hook to maintain it forever.  Or not – take a look at Detroit.

 

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