Jobs – CivilMechanics

Kentucky’s Regressive Tax Reform

February 5, 2014October 10, 2015 Rob Morris 0 Comment Kentucky, Taxes Business, Community, Jobs, Plutocracy, Steve Beshear, Taxes

I was pleased to be asked to comment for today’s story by Jack Brammer and Janet Patton for the Herald-Leader on the Governor’s tax proposals. They did a great job accurately representing my views. This post helps elaborate on my perspective.

Dubbed “Kentucky Competes“, Governor Steve Beshear’s tax proposal consists of more than 20 changes to our state’s tax code. The proposal contains a number of troubling components which place a disproportionate burden on Kentucky’s poor, while providing large annual tax breaks which are skewed toward businesses and the wealthy.

I have three major objections to Governor Beshear’s tax reform plan:

It is a taxpayer-financed corporate tax giveaway.
By relying on sales taxes, the plan hits the poor and middle class harder than wealthier citizens and businesses.
By choosing which kinds of labor to include (and exempt) from the sales tax, the plan hits the poor and middle class even harder.

Let me step through each one in turn.

1) Corporate Tax Giveaway

Click to enlarge

Governor Beshear’s proposals would generate an additional $210 million for the state. But like many tax reform initiatives, Beshear’s plan contains a mixture of new taxes and new tax breaks.

The Governor’s plan contains approximately $487 million in new annual tax breaks, more than offset with about $697 million per year in new taxes.

That’s nothing especially disturbing, given that the reform plan is supposed to put the state on sounder financial footing, and raising taxes is one way to do that.

What is disturbing is how the mix of breaks and taxes are allocated. Nearly half of the Governor’s tax breaks go to businesses (amounting to $234 million per year). So what’s their share of the new taxes that Beshear proposes? Nearly zero:

Click to enlarge

I say ‘nearly’ zero because there will be some businesses which pay the new sales taxes for covered categories like auto service or computer repair. But given the exemptions and restrictions on these new sales taxes, the business share of the almost $700 million in new annual taxes will likely be very, very small.

So businesses (some of them, at least) will get a collective windfall of more than $234 million per year under Beshear’s plan, while simultaneously contributing no new taxes to the state.

Throughout the documents Beshear’s office released yesterday, there is the notion that this corporate giveaway will help Kentucky “compete for quality jobs.” The underlying assumption is that if “job creators” are given enough tax cuts, that they’ll hire our way to prosperity. This notion is, at best, misguided; at worst, it is an outright lie.

As I have written before (more than once, in fact), business owners do not hire because they have extra tax-cut money lying around. We hire because we have work to do, and we need someone to get it done. We hire when there’s more demand.

Meanwhile, because businesses wouldn’t pay these new taxes, the burden is placed squarely on Kentucky’s families. When paired with the tax breaks for individuals, Kentucky households would pay about $444 million more in new taxes each year (or approximately $260 per household.)

While the Governor trumpeted the ‘relief to every working Kentuckian’ yesterday, the hard truth is that his scheme raises taxes on nearly every working Kentuckian in order to fund an enormous tax giveaway to select (usually large) businesses. This plan is a stunning, brazen, and inexcusable attempt to redistribute wealth from those who can least afford it to the already-wealthy.

2) Sales Taxes

Sales taxes are an incredibly regressive tool for raising money for Kentucky. They are regressive in the sense that sales taxes hit poorer people harder than wealthier ones.

Why are sales taxes especially burdensome for the poor? Because the extra tax takes up a greater portion of their income for the same product or service. The extra tax just hurts more.

Even though the Governor’s proposal includes some $72 million in Earned Income Tax Credits (credits for the working poor – generally a good contributor to the economy and job production), he bleeds those benefits away with new sales taxes.

And the proposed sales taxes are almost exclusively in consumer services, while sales taxes for business services are largely exempt.

Ordinary Kentuckians would not benefit under Beshear’s regressive plan.

3) Different Kinds of Labor

The Governor’s plan also targets only certain kinds of labor for sales tax expansion. In particular, it chooses to apply sales taxes to labor involved in the “installation, maintenance and repair of taxable personal property.” In other words, the repair and service of personal items (like cars or computers) would be taxed under Beshear’s plan.

But not all service labor is equal, under the Governor’s scheme. Other kinds of labor – say, accounting or legal services – would be exempt from the new taxes. And who disproportionately uses a lot of those exempted services? Businesses and the wealthy, of course.

Even within the “installation, repair, and maintenance category”, there are exclusions. Because these new taxes apply to ‘personal property’, they exclude repair and maintenance services for machinery, farms, and real estate properties — the kinds of services consumed in greater amounts, once again, by businesses and the wealthy.

By steering the new taxes away from services which impact the wealthy, Beshear hits ordinary Kentuckians especially hard.

Governor Beshear’s new tax proposal is an audacious attempt to take wealth from Kentuckians who are hardest hurt by our economy, and attempts to transfer that wealth to the already-well-off.

It is a colossally bad idea which will leave millions of Kentuckians worse off. And we shouldn’t let him get away with it.

After the jump: Backstory

The Austerity Drag

February 4, 2012October 10, 2015 Rob Morris 0 Comment Jobs, National Austerity, Government Spending, Jobs

The U.S. economy added 243,000 jobs in January, far surpassing analysts’ expectations of around 155,000 jobs for the month. As a result, the unemployment rate also unexpectedly ticked down to 8.3 percent for January.

The private sector added 257,000 jobs in January, while public-sector employment dipped another 14,000.

And that last part is important, because it begins to reveal the truly destructive nature of austerity.

Amid the wrong-headed drive to shrink the size of federal, state, and local governments (government employees make up one-sixth of the workforce), private sector job gains have been partially thwarted by the losses of government jobs.

With the release of the jobs data each month, the ever-insightful Steve Benen – who joined The Maddow Blog this week – republishes his two charts showing job losses and gains for each month since the beginning of the Great Recession.

The first chart shows the overall jobs picture, while the second shows the jobs picture for the private sector alone. My shameless rip-off adaptation of these charts is below. As with Steve’s charts, the red columns show monthly job losses under George W. Bush, while the blue columns show monthly job totals under Barack Obama:

The second chart shows that the private sector has been adding jobs for each of the past 23 months.

Also worth noting: there are more total private-sector jobs today (110.4 million) than in February 2009 (110.3 million), just days after Barack Obama took office.

But I always wanted to see a chart which showed us what was happening in the public sector.

So I took matters into my own hands. Here’s my own homemade chart showing jobs totals in the public sector since the beginning of the Great Recession:

As I plotted the data, I began to understand why Steve might not show the public-sector data each month: The one-time massive hiring bump (and susequent wind-down) surrounding the 2010 Census dwarfed all of the other changes in the chart, obscuring the other month-to-month changes.

As a result, the chart provided little insight into the fundamentals of public-sector jobs.

Fortunately, the Bureau of Labor Statistics published a press package which isolated hiring for the 2010 Census. This allowed me to disentangle the one-time effects of the Census from the underlying fundamentals of public sector jobs.

The result is this chart showing monthly job totals in the public sector, excluding the volatile Census hiring data:

In many ways, this public sector chart is the inverse of the private sector one.

At the very moment when the private sector began to recover, at the very moment the economy needed to be firing on all cylinders, at the very moment the government should have leveraged negative real interest rates* to invest in jobs and infrastructure, one-sixth of the economy was (and continues to be) stuck in reverse.

And as austerity economics kicked in, the losses in the public-sector have only deepened, creating significant drag on the economic recovery.

Since Barack Obama took office three years ago, the public sector has shed some 603,000 jobs – averaging roughly 17,000 job losses per month. (Compare that to the 840,000 public-sector jobs added during George W. Bush’s second term – an 18,000 per month clip.)

Without these public-sector job losses over the past three years, the unemployment rate would stand at 7.9% today instead of 8.3%.

While some might celebrate the wholesale destruction of government jobs, I don’t.

Public sector employees are vital to our economy and to my business. Many of my customers are teachers, first responders, court personnel, and a wide array of other local and federal government employees. Public employees create better roads and safer neighborhoods and smarter students, all of which benefits my business.

The destruction of public sector jobs negatively affects my business and our economy. As public sector employees lose their jobs, I lose business. And the wider economy suffers, as well.

Austerity just doesn’t work.

* A bit of explanation here on “negative real interest rates”: instead of expecting a positive return on government bond investm0ents, investors are now willingly paying to have the federal government hold their money for 5, 7, and 10 years. In essence, investors from around the world will pay us to invest in our jobs and infrastructure – which would, in turn, pay even greater dividends to our economy as we emerge from recession.

Right.

October 22, 2010March 3, 2016 Rob Morris 1 Comment Campaigns, Local Community, Economic Development, Jim Gray, Jim Newberry, Jobs

On November 2nd, Lexington chooses its mayor. I’ve spent much of the past few years observing the two candidates in action.

Here, I address why one candidate is the right choice for Lexington, and why he will lead our city to a more prosperous and successful future.

I first got to know Jim Gray personally about a year and a half ago. After I had written about Lexington several times, I was pleasantly surprised when he asked to meet with me.

I had long admired Jim’s accomplishments as a successful businessman and civic leader. But as we talked about our backgrounds and about his experiences as Vice Mayor, I realized that this was the man Lexington needed to lead our city to a better future.

Jim Gray is the right person to lead Lexington back to prosperity. Let’s explore why.

Humility
For all of his accomplishments and personal achievements (more on those in a bit), Gray is surprisingly humble about his success. Gray’s humility manifests itself in a number of important ways.

He acknowledges his own imperfections. Rather than becoming defensive about his faults, he surrounds himself with people who more-than-compensate for qualities he may lack.
He listens. A lot. He knows that he doesn’t have all of the answers, so he seeks out people who have more knowledge and ideas. And then, he listens carefully to what they have to say.
He is inclusive. He always uses inclusive terms – “we”, “us”, “our” – when talking about Gray Construction (his family business where he serves as CEO). He generously shares credit with others for the company’s success.

While his humility helps him lead and inspire those who work with him, it doesn’t always serve Gray well in politics.

For one thing, bragging comes unnaturally to him – he finds it awkward and unseemly to crow about what he has done and how he has led.

For another, he is inclined to be magnanimous – sometimes maddeningly so – with his political opponents. While his opponent kicked off the campaign by attacking Gray, Gray has kindly maintained that his opponent “is not a bad guy, he’s just made some bad decisions”.

Accomplishments
Looking around the city and the commonwealth, Gray has left a lasting economic legacy which will serve our community long after his political career is complete.

Gray has led Gray Construction to be one of our city’s most innovative firms, and the company has a long record of job creation and city-building.

It starts with Gray Construction’s downtown Lexington headquarters, located in the old Wolf Wile building. Gray took a dilapidated building and transformed it into one of Lexington’s most inspiring workplaces. The building stands as a stellar example of blending historic preservation with economic development.

But Gray’s accomplishments don’t stop there.

From here at Lowell’s, we can see Sayre’s Buttery and Upper School. Both buildings use modern building materials and techniques, while maintaining consistency with our historic North Limestone neighborhood. That is a trademark of a Gray urban construction project.

In other parts of Lexington, Gray Construction projects include:

CenterCourt, a mixed-use development near the UK campus
A LEED-certified distribution center for Kentucky Eagle
The headquarters of Big Ass Fans
Amazon’s Lexington distribution center

Gray was instrumental in the inception of the 21c Museum and Hotel in Louisville. Combining the best of old downtown Louisville with new design and materials, 21c has now been voted the #1 hotel in the U.S. for two years in a row.

South of Louisville, Gray built the visitors’ center at Bernheim Forest, Kentucky’s first LEED Platinum building.

In Georgetown, Gray built Toyota’s sprawling manufacturing facility, a vital part of our local economy.

Gray has changed the face of Lexington and of Kentucky for the better, and our community is more beautiful and more economically vibrant as a result. He knows what makes a city thrive. And he knows what businesses need to create jobs.

Insights
Jim Gray brought his experiences and insights from the business world to his (part-time) role as Lexington’s Vice Mayor. He has had a knack for asking the right questions and doing the right things while in office:

He challenged the economic viability of the failed CentrePointe development from the beginning.
While the mayor waffled, Gray took the lead on looking into scandals at the Airport, the Library, and the Kentucky League of Cities.
He looked into how public safety was compromised by poorly-executed fire station brownouts.
He asked how wise it was to close several blocks of a major artery into downtown (South Limestone) for nearly a year.
He pushed for alternatives to the $160 million water plant which has now raised water rates by 65 percent.

Some have dismissed Gray’s actions as ‘grandstanding’. But when we look back at the record, we see that he was right to ask these questions. Every time.

Vision
Gray has been able to synthesize his business experience, what he’s learned about city goverment, and what he has heard from our community into a new vision for what Lexington could be.

But beyond a simple and unactionable vision, Gray has also detailed a ‘Fresh Start’ plan to specify what he will do as mayor. The plan helps translate Gray’s vision into actionable steps.

Don’t agree with something in Gray’s plan? Let him know. Challenge him to make it better. Tell him how. As he says, the plan “is designed to be intelligently changed”.

Gray’s plan also reveals something even more important about Jim Gray: He has been thinking carefully about the future of Lexington. He has kept his eyes open. He has listened to our citizens. He cares deeply for our city.

And, he has very good ideas for making Lexington an even better place to live and work.

I think we should give him the chance to implement his vision.

On November 2nd, I hope you will join me in voting for Jim Gray as Mayor of Lexington. I give him my whole-hearted endorsement.

To-Do List for Lexington: 9. Do!

December 15, 2009March 3, 2016 Rob Morris 2 Comments Local Better Lexington, Business, Community, Design, Economic Development, Ideas, Jobs

(Part of the To-Do List for Lexington series. Click here for an overview and links to the rest of the series.)

Throughout this To-Do List series, we’ve talked about the kinds of things we need to do to make Lexington a better city, especially with regard to improving our city’s economic development.

In Get Real, we talked about the need to curtail boosterism – the compulsive promotion of our city at the expense of real, substantive economic initiatives. Lexington needs to get a lot more realistic about what kinds of civic activity drive true prosperity.

We talked about promoting growth at home as the best way to attract new growth from the outside in Stop Seeking Saviors. Rather than spending huge, speculative amounts to draw in new firms from outside the city, Lexington should target spending on growing its economy from within.

We talked about the multiplier benefits of buying products and services from local providers in Local First. Lexington should prioritize local purchasing, development, and investing in order to supercharge its growth.

In Embrace Openness, we talked about the need for our city to adopt an open approach to serving citizens, including open access to data about our city. Lexington should find new, more transparent ways of serving and communicating with its citizens.

We talked about how to grow, keep, and attract educated talent – talent which is currently bleeding from Lexington – in Leverage Intellectual Capital. We must find ways to keep experienced and specialized workers – who contribute enormously to our economy – in our city.

We talked about taking advantage of Lexington’s uniqueness – including the promise of the Distillery District – in Be Original. We must leverage that uniqueness to make Lexington a city worth visiting and worth living in.

We talked about the need for intermediate-term strategic planning as a way to connect action to vision in Plan Well. Lexington must make thoughtful, strategic investments with its public dollars.

Then, in Demand Accountability, we talked about how good initiatives get derailed and about how we must step up to make our leaders – and ourselves – responsible for keeping such initiatives on track.

While the list covers a lot of ground, it isn’t comprehensive by any means. For instance, we didn’t delve into the importance of the arts in our community. We didn’t talk about becoming more environmentally responsible, and building a sustainable Lexington. We didn’t talk about how to improve conditions for Lexington’s poor.

Our To-Do List for Lexington isn’t complete. We’ll continue to add to it in the months ahead. There’s a lot more to talk about…

But it is time to stop talking. Stop complaining. Stop whining. Stop planning. Stop theorizing. We need to shift from analysis to execution. This is a To-Do List, not a list of discussion items.

Lexington must start to do these things.

We need to ensure that leaders from across the community understand and implement these principles. If they disagree, that’s fine, but they need to articulate why they disagree in open, democratic debate.

And if they don’t, we need to get new leaders.

We need to commit our time, money, and effort to applying these principles for the betterment of our community.

We need to go build a prosperous, beautiful, livable city. We need to go make Lexington better.

Who’s in?

Next: Postscript

To-Do List for Lexington: 5. Leverage Intellectual Capital

December 3, 2009October 10, 2015 Rob Morris 4 Comments Local Better Lexington, Business, Community, Economic Development, Ideas, Jobs

(Part of the To-Do List for Lexington series. Click here for an overview and links to the rest of the series.)

Lexington is losing its minds.

At 100,000 strong, Lexington’s college graduates represent approximately one-third of the population over 25 [Source: US Census Bureau, American Community Survey, 2006 and 2008].

The University of Kentucky and Transylvania University churn out over 6,000 new graduates – including over 4,000 new bachelor’s degrees – each year. With 4,000 new degree-holders per year, Lexington should have increased this talent pool from 100,000 in 2005 to about 112,000 in 2008.

But we didn’t.

Instead, even as Lexington’s overall adult population grew by 9,000 in that 2005 to 2008 period, the number of college graduates remained stuck at 100,000. (For comparison purposes, Louisville grew from 191,000 college graduates in 2005 to 202,000 in 2008 – growth of 5.7%).

Somehow, 12,000 graduates have slipped from our economy – far more than can be explained through normal attrition (retirement, death, etc.).

The explanation: Educated talent is leaving Lexington. We suffer from a “brain drain”.

In recent years, it has become fashionable for Lexington’s leaders to talk about attracting the “creative class” to Lexington. Coined by Richard Florida, “creative class” refers to professionals who work in knowledge-intensive industries, and Florida’s theory is that this group of professionals drives economic development in “creative cities”.

When our leaders talk of the creative class, they frequently focus on diversionary amenities which will attract young creatives to our city – entertainment, events, and facilities which will make life in Lexington more enjoyable outside of work.

While not entirely misguided, the problem with this approach is threefold:

It confuses cause and effect. Is this creative environment really the driver of economic prosperity in American cities? Or, more likely, are they the result – the pleasant side-effect – of a prospering economy?
The flagrant boosterism which permeates Lexington’s attempt to attract new talent often comes at the direct expense of retaining the talent we already have, as Steve Austin ably points out.
It assumes that the creative class is something ‘out there’. Lexington already has a creative class. And we must cultivate it here first.

Instead of focusing on amenities, Lexington should focus on crafting a vibrant economic engine which will keep the educated talent our city produces and which will create real demand for those amenities.

Who’s leaving?

When we see that Lexington has lost 12,000 college graduates in 3 years, our impulse is to look for an exodus of newly-minted degree-holders, and to start thinking about what we could do to retain our newest, youngest graduates.

And while the loss of a departing new graduate’s energy, potential, and future is certainly tragic, there is an even-more-profound tragedy which Lexington must actively address: the loss of the experienced employee.

When experienced employees with college degrees leave Lexington, they injure our economic engine far more than a young graduate. Experienced employees represent significant investments in training, dollars, relationships, know-how, and, well, experience.

In aggregate, these experienced employees are vast pools of expertise which create enormous economic advantage for Lexington. They have more income than recent graduates. They provide more tax revenue. They have higher property values. They spend more money in the local economy, which creates more local jobs. They tend to add more value to their companies.

This is the primary reason I have been so publicly critical of Lexmark’s implosion. Every few quarters, Lexmark announces fresh rounds of layoffs and “restructuring” which shed dozens or hundreds of local employees. Many other employees have left of their own accord.

Seeking employment which can utilize their expertise, these folks often leave Lexington. Many who remain in Lexington are underemployed. When so many highly-trained experts in engineering, software development, logistics, and marketing leave our city, it is an enormous hit to the local economy.

Lexington must find ways to solve this exodus of talent (in both new graduates and experienced employees). We need to be creative in how we grow, keep, and attract smart people.

Lexington must leverage its intellectual capital.

How do we grow, keep and attract smart people? We need to start by helping to create new local jobs.

There is a common misconception that all job growth in the US comes from small businesses. But business size isn’t the determining factor; business age is. The Kauffman Foundation found that all job growth in our country comes from young businesses (regardless of their size). Entrepreneurial ventures founded in the last 5 years drove all job growth in our nation’s economy.

When we think about entrepreneurship, our focus is often (again) on our younger generations. We are drawn to stories of Gates, Jobs, Dell, and Zuckerberg launching wildly-successful ventures from their dorm rooms or garages. They came so far from such modest beginnings. In Lexington, we see this youthful energy and creativity exhibited in Awesome, Inc. (who are awesome, by the way), a local business incubator.

They make really compelling stories. But the meteoric rises of Microsoft, Apple, Dell, and Facebook are so compelling precisely because they are so rare.

And they misrepresent the realities of the entrepreneurial world.

In another counterintuitive study, the Kauffman Foundation found that older, more experienced workers actually start new businesses at higher rates. Other studies have found that the vast majority of technology startups are founded by people 35 or older. And where do many of those older entrepreneurs come from? Often, from large corporations.

So how do we create new jobs in Lexington? How do we keep and attract members of the “creative class”? How do we stem the bleeding of expert talent from our city? Here’s a starting list for leveraging our intellectual capital. I hope you will add to it:

1. Fuel the entrepreneurial engine. From experience, I can tell you that starting a business is daunting hard work. There is the bewildering array of legal and tax implications. There are a variety of financial hurdles. And, unless you’ve done this sort of thing before, there is a ton of on-the-job learning about what you don’t know about starting a business.

Lexington (LFUCG and Commerce Lexington) should strive to streamline the start-up process far more than they do today. Our city should embrace entrepreneurs as they seek to create new jobs for our economy.

We should help them flatten the usual barriers to getting a business started. We should provide forums for getting enrepreneurs connected with other talents and businesses which can assist them in the setup and growth of their businesses. We should give them open access to critical business data about our city. We should give them some amount of preference in local bidding contracts. We should provide them with essential training in operating their businesses (e.g., If they are brilliant engineers, that doesn’t always mean that they are brilliant marketers or financial analysts).

When possible, we could even provide them with financial support or space (such as setting them up in the plentiful space available in Lexington’s Distillery District).

In short, Lexington needs to foster the conditions under which entrepreneurs can create jobs.

2. Grow our pools of expertise. Our mayor frequently talks about how Lexington’s 3 H’s (Horses, High tech, and Healthcare) form the foundation of our city’s economic development strategy. Those sectors may be the right ones to leverage going forward.

But when we think about stopping our exodus of talent, we need to think in more flexible terms than specific industries. A supply chain manager leaving Toyota has a unique skillset (how to get things made overseas, optimizing inventory, logistics, etc.) which can carry over to a variety of other – not necessarily high-tech – industries. A marketer leaving Lexmark has a vast array of experiences with retailers, ad agencies, design firms, and product strategy which could be redeployed to, say, UK Healthcare.

In addition to choosing strategic industrial sectors, we should also choose strategic, functional areas of expertise that we can tap into as one industry wanes and another expands. Some ideas? Supply chain, marketing, sales, engineering (multiple types), software development, etc. (Add your own in the comments below.)

Not every employee currently leaving Lexington will want to become an entrepreneur. But nearly every one wants a job.

As companies like Lexmark shrink, Lexington should seek to actively funnel their fleeing employees to growing local enterprises like Alltech, UK Healthcare, HP’s Exstream, or some new entrepreneurial venture. We should inject some “liquidity” into the local job market, so that finding local opportunities is an easier, more streamlined process. When we learn of new layoffs, our city should mobilize to keep that valuable talent local.

We shouldn’t allow employees, especially experienced ones, to leak from our economy.

3. Coordinate and amplify existing efforts. Today, we have a patchwork of agencies and institutions which have missions to grow Lexington’s economy and provide jobs. We have one person working on economic development in the Mayor’s office. Commerce Lexington is given tax dollars to help produce new jobs, but is unable to show that they have actually created any.

We should coordinate such efforts in a more strategic, consistent, coherent, and effective way. We should designate a person or an agency who has accountability for results – especially for job growth in our city. That entity should also have responsibility for fueling our entrepreneurial engine and for growing our pools of expertise.

And then – and this is really important – we must hold them accountable for the results they get.

The loss of 12,000 educated Lexingtonians shows us that our city needs to work hard to grow, keep, and attract talent. If we create the mechanisms to create new entrepreneurs while simultaneously magnifying our existing expertise, our economy should have the raw materials to begin growing again.

Next: 6. Be Original

To-Do List for Lexington: 4. Embrace Openness

November 6, 2009March 3, 2016 Rob Morris 6 Comments Local Better Lexington, Business, Community, Economic Development, Government Spending, Ideas, Jobs, Streetscapes

(Part of the To-Do List for Lexington series. Click here for an overview and links to the rest of the series.)

In January 2008, we were in early discussions to buy Lowell’s. Since Lowell’s focused only on Toyota brands, I had a simple question: How many Toyotas, Lexuses, and Scions are in Lexington?

It seemed like a fairly straightforward question, and since the county and state kept vehicle registration records, it seemed like the answer should be easy to find – especially since Indiana freely published precisely the kind of data I needed, but not for Kentucky counties.

After trying internet searches and coming up empty, I contacted the Fayette County Clerk’s office, who referred me to the state Department of Transportation. After a few more phone calls, I learned that I’d need to file a request under the Open Records Act, specifying the exact data that I would need. I later found that I’d also have to pay $225 to get the data.

It all seemed so needlessly bureaucratic: It was public information, after all – so why wasn’t it more public?

What followed was 13 months of a couple dozen intermittent phone calls, a similar number of emails, maddening unresponsiveness, and inane forms (including a mandatory contract which required that I wouldn’t use anyone’s personal data, even though the data I requested contained no personal information – it was just counts of vehicles by county).

Finally, this past February, I got the report I needed. Well, sort of. It was in a file and format which was nearly useless. And, we got it a full 7 months after we bought the business, so much of the urgency to get the data had dissipated. Still, we eventually wrangled it into something we thought was interesting and informative, and published the results in early April as the Bluegrass Vehicle Report 2009.

Bureaucracies often have a maddening, self-perpetuating logic wherein
the only purpose of the bureaucracy appears to be to maintain the
bureaucracy. Laden with rules and restrictions, such organizations often turn their focus inward and forget their true purpose. And rather than engaging with and serving their constituencies, they tend to serve the bureaucracy’s interests.

In the process, bureaucracies become tangled, closed, unmovable beasts which are hostile to the very people they are bound to serve.

Our vehicle data experience is, unfortunately, all-too-typical. But it doesn’t have to be…

Lexington suffers from a bureaucratically-driven lack of openness (as does Kentucky at large). And that lack of openness hinders our city’s economic, social, and political progress.

Lexington needs to embrace openness.

There are (at least) two ways in which we can create a more open city:

By creating more open information and information systems
By adopting more open approaches to how our city serves its citizens

Open Information
Portland, Oregon recently approved an economic development strategy which
directed the city to open its information to the public in a
structured, standardized format. Portland is just one of the latest in
a fast-growing list of progressive communities who are opening their data to
their citizens.

Portland followed in the footsteps of San Francisco which – through DataSF.org – has created a clearinghouse of over 100 sets of up-to-date government data. That data includes geographic information, crime statistics, transportation data, and measures of performance for key city departments.

By standardizing this data and making it easy to download, San Francisco has enabled software developers to create rich new applications. In just a few months, this move toward openness has spawned several mobile applications dedicated to anything from getting around the city to spotting neighborhood crime trends to finding places to take the kids. It has even created a showcase of these applications, encouraging both users and developers to make use of the open data.

Indiana – for many years – has offered incredibly rich datasets on a wide variety of the state’s data on Indiana University’s StatsIndiana site.

By sharing this data – even when it is uncomfortable (like the crime
data) – these places are enabling citizens to understand their communities better. If the crime data highlights problems, so much the better – at
least citizens know what they are dealing with, and the community can
begin to address problems with knowledge and insight.

In short, these places are making their communities more livable, while simultaneously encouraging local entrepreneurs to leverage the data to create new applications and new businesses.

These places follow a few simple rules to create useful clearinghouses of data:

Data should be standardized into a structured, machine-readable format so that it may be easily imported into databases and spreadsheets for use with other applications.
Data should be updated regularly. If possible, it should tap into data sources in real time.
It should cover the widest possible array of government information – statistics, contracts, spending, performance, etc. (Don’t try to predict or direct what information will be needed – let citizens decide on their own.)

In addition, most of the places adopting open data standards are also standardizing on lower-cost open source software. By adopting open source platforms like Linux (operating systems), Apache (web servers), MySQL (databases), and Ruby (software development), the cities are able to move away from expensive proprietary systems from Microsoft, Oracle, and PeopleSoft, while simultaneously tapping into a rich community of developers, applications, and support.

Lexington can and should learn from these cities.

From an economic development standpoint, this kind of open
information is crucial to business growth. In Lowell’s case, vehicle
registration information would have been valuable for developing better, more informed business plans and strategies. Such information is crucial to local businesses as
they evaluate market opportunities in our city. It would be equally critical for businesses
who wish to locate in Lexington from the outside.

And, most important, having more complete, more open information would help Lexington make better, more informed decisions and have smarter conversations about our future. For example, we could have better evaluated the closure of South Limestone:

How much traffic would be diverted to other streets?
How much congestion would that cause?
What are the environmental impacts of the increased congestion?
How much commuter time would be lost?
What are the costs to downtown businesses in lost customers, lost productivity, and lost services?
What are the tax implications of those business and commuter losses?
How did the bid process actually work?
What did the bid documents say regarding daily work schedule, incentives, and overall timeframe?

Some of these questions may have been answered inside the Lexington-Fayette County Urban Government (LFUCG), but those answers didn’t enter into the public discussions in a meaningful way. If this data and these processes had been more open and transparent, the decisions made around the South Limestone project may have been very different.

Open Approaches
One of our most frequent critiques of LFUCG is the way in which it serves (or fails to serve) the interests of Lexington’s citizens and economy.

Nowhere is this more apparent than in the structure, timing, and conduct of LFUCG’s Urban County Council meetings, which seem designed to suppress thoughtful public discourse.

The council holds a bewildering array of meetings with a variety of purposes, but two of the most important meetings are held on Tuesdays at 3 PM or on alternate Thursdays at 7 PM. Depending on the agenda, citizen input comes either at the very beginning or very end of the meeting. Each citizen is limited to three minutes to speak to council. In fact, both citizens and council members are placed on a visible countdown clock to limit their discussion times.

This format poses a number of problems:

Participation. Because of the timing of meetings, our ability to participate is restrained. Most citizens have work or family obligations at 3 PM on a Tuesday.
Beat the Clock. Generally, the three-minute limit and the countdown clock stifle thoughtful civic discussion on complex and nuanced issues like CentrePointe, underground utilities, or South Limestone. This is especially the case under the iron hand of Mayor Newberry, who – whatever his other
qualities as an executive – is a ruthlessly efficient timekeeper.
Timing. Putting citizen commentary at the beginning or end of meetings divorces it from the council’s discussion of those topics, which comes in the middle of the meeting. Thus, citizen input is placed at the margins of the discussion instead of in the midst of it.
Abuse. The time limits, when coupled with parliamentary maneuvers, allow some council members to squelch the discussion when it goes in directions they don’t like. One council member is so adept at using this technique – on citizens and on fellow council members alike – that it should be named “the Myers” in his honor.

Such scheduling and time-allotment rules are relics of the last century: They seem more at home in the 1950’s or 1850’s than in 2009. And they are leftovers of a bureaucracy which has lost its way – squelching civic discussion rather than contributing to it. Worse, it shows disrespect and disdain for the very citizens those rules are supposed to serve.

LFUCG should adopt more open – and more modern – approaches to debating issues and to gathering citizen input.

[Note: What follows is excerpted from an old post which we feel framed the issue best. Sorry to self-plagiarize.]

In an age of websites, blogs, Twitter, and Facebook, every business has had to engage in conversations with customers on the customers’ terms. The ubiquity of the internet means that these tools are available to nearly everyone, nearly everywhere. The latency of the internet means that the conversations don’t have to happen at the same time – they can build over time. The internet’s ubiquity and latency forms the foundation of a new and better town hall.

Why should we all have to cram into a room at the same time? Why should we have to play ‘beat the clock’ when talking about issues which are complex and nuanced? Why should we have to forgo pressing business or personal matters to attend a meeting which is designed to be convenient for our representatives?

The internet provides the perfect public forum for every citizen to express his or her public policy views, ideas, and thinking. Even better, our ideas can build on one another as we tinker with and improve the ideas of our neighbors. Plus, conducting civic conversations on the internet can happen around the clock. Citizens can participate in the public discussion when and where it is convenient for them, not for the elected representatives who serve them. Isn’t that the way it should be?

Further, every single representative should publish their conversations, thinking, dilemmas, trade-offs, beliefs and positions (and the transactions between them and other interested parties – like developers or investors or campaign contributors). These records should be posted online for all citizens to see, comment on, debate, and improve.

The council members’ emails are listed on the city’s website, as are the mayor’s newsletters. But these are old, closed, one-way forms of communication. They aren’t vibrant community
discussions.

So, do I want to see tweets that the mayor’s advisor is picking up eggs? Or a Facebook entry featuring the halloween costumes of the councilwoman’s children? Not particularly. But we
deserve to see real-time updates of their thinking on critical community issues. We should know why they have changed their minds at the last minute. They should tell us who they talked with and what they said. After all, they are public officials. We should see into a transparent civic machine which serves all of us.

What is clear is that a 19th-century civic apparatus has hamstrung our 21st-century community. The ancient contraption allows far too many secrets to hide within. Whether our representatives and our governments use blogs, Twitter, Facebook, or some other platform matters far less than whether they start participating in open conversations with the people they serve.

The technology already exists. Millions of people already use it. Thousands of your constituents use it every day. It’s easy. It’s free. And it will make Lexington better. What are you waiting for?

Lexington needs to adopt open, transparent, and up-to-date approaches to serving its citizens. Lexington should also provide open information about the city so that we all can make smarter, more informed decisions.

Our lack of openness impedes our commerce. It impedes our democracy. It impedes our path to a better Lexington.

Let’s change that.

Next: 5. Leverage Intellectual Capital

To-Do List for Lexington: An Overview

November 2, 2009November 20, 2015 Rob Morris 11 Comments Local Better Lexington, Business, Community, Economic Development, Ideas, Jobs, Taxes

On November 8th, this blog will turn turned one year old. It has been an interesting year, and the blog has turned into something very different than what we initially conceived.

One of the surprises: how much we ended up focusing on issues and ideas of local interest, especially those related to downtown Lexington.

We’ve not been shy about offering our opinions on CentrePointe, on South Limestone, on Lexmark, on our local government, and on the future of our city, just to name a few. And you’ve not been shy in offering your (often very different) opinions in return.

We believe that Lexington is a really great city. But we also believe it needs to be much better. And we’ve got some ideas on how to get to that better future.

So, as we end our first year of blogging, we thought it might be good to put together an agenda for our city. Over the next several posts, we’ll share ideas on improving Lexington. Some will be ideas we’ve touched on before; some will be brand-new. We’ll focus a lot on our city’s economic and urban development.

As we build out this list over the next week month or so, please add your thoughts and comments. We believe that an open discussion about our city is vital to crafting a better future for Lexington.

So think of this series as a conversation-starter. Think of it as a love letter to what our city could be. Think of it as the rantings of your local mechanic.

Think of it as a to-do list for Lexington.

To-Do List for Lexington

Postscript (12/15/2009)

This series is dedicated to my son, Carson, and to the future Lexington that he and his generation will inherit.

What presenting to LFUCG is like

October 7, 2009March 3, 2016 Rob Morris 4 Comments Local Better Lexington, Community, Design, Economic Development, Government Spending, Ideas, Jobs, Streetscapes

Prologue
It all started with a testy weekend exchange on Twitter with LFUCG council member Doug Martin.

That Twitter exchange started with me posting multiple sarcastic complaints about traffic and then morphed into a conversation on leadership.

Throughout the day on Friday, I saw a series of ‘tweets’ on how bogged down Lexington’s traffic had become. As new street closures on West Main Street and Old Frankfort Pike were added to the long-term closure on South Limestone, traffic in many parts of the city came to a standstill. This was exacerbated by a multi-vehicle wreck on Versailles Road Friday night. Essentially, the entire west and south side of Lexington was impassable.

I then made my sarcastic assessment of the chaotic state of our streets.

Without going into details, CM Martin objected to my flippant tone, and urged me to complain less and lead more. It was a point that he reiterated as other folks jumped into the conversation throughout the weekend. I pulled back from the discussion – stewing a little that CM Martin felt I wasn’t leading already.

I should clarify that Doug Martin is one of my favorite council members. He’s engaged and approachable – by far the most active Twitterer in LFUCG – and he genuinely wants more citizen participation and a better city. Although he and I frequently disagree on specific tactics that we should use as we approach the important issues in Lexington, I feel that we’re on the same team.

But as the weekend progressed I couldn’t get over how he seemed to think I wasn’t a leader.

Preparation
As I stewed about the conversation with CM Martin, I was simultaneously stewing about the state of our city’s traffic.

I have written a few times about the streetscape project and the resulting impacts to downtown. Most recently, I wrote about the “true costs” of the South Limestone project – lost customers, lost productivity, lost services – and estimated the total loss of business to be between $84 and $92 million, far in excess of the approximately $17 million being spent on construction.

Meanwhile, there seemed to be no sense of urgency at LFUCG about accelerating the project.

On Monday, I learned that the next LFUCG work session included a “Downtown Streetscape Update” on the agenda. I decided that I would make a presentation on my findings – and perhaps demonstrate some “leadership”.

Trouble is, I had never even been to council chambers, let alone participated in a meeting. I asked my informal network of friends on Twitter, email, and South Limestone what I needed to do to make a presentation at the beginning of the session.

And the responses I got were great, but a bit intimidating. I only had about 24 hours to get my act together.

Citizens are only allowed 3 minutes to comment on issues on the agenda. But other citizens can donate their time. I figured that I had at least 10 minutes worth of material, which would mean that I needed 3 (or more) other folks to donate their time to me. Everyone has to sign in before the 3 PM meeting starts. Getting 3 other people to come to council chambers at 3 PM on a Tuesday is a daunting task.

At the same time as I was searching for supporters, I was also trying to throw together a presentation. I am a presentation perfectionist – I like to have every slide “just so”, and I want to know precisely what I’m going to say with each slide. (I’m the same way with writing, by the way.) Normally, crafting a presentation that I am happy and comfortable with takes a week or more.

But I had one day. Time to buckle down.

By early Tuesday, I had only one other person committed to showing up, giving me a grand total of 6 minutes. I was beginning to think I’d have to miss this opportunity to present to council. As I was preparing the presentation, I was also mentally noting the parts I’d have to slash if I didn’t have enough supporters donating their time.

But as my network kicked in on Tuesday afternoon, I saw that I’d have at least 12 minutes.

With that, I “locked in” the content of my presentation, and downloaded a few different versions of it to a thumb drive. I didn’t know which version of PowerPoint to bring (PP 2003 is the best bet). I also didn’t know if I’d have control of the ‘clicker’ to transition between slides (it turns out that I did).

Presentation
I showed up to city hall at about 2:45 PM, hoping to see my “supporters”. I checked in at the front desk by giving them my driver’s license and getting a visitor’s badge (a sticker, really). Then, one by one, I started to see the other folks who were donating their time to my presentation. There were 4 others, which should have given me 15 minutes – more than enough time for what I had to say.

I gave my thumb drive to the LFUCG’s technical coordinator, and had a moment of panic – the thumb drive had an “autorun” file on it which the LFUCG computers saw as malware. I was starting to look like I couldn’t even load up the presentation. After a reboot, we were able to transfer it, and the coordinator showed me the way to navigate through my presentation while up at the podium.

Mayor Newberry started the work session at 3 PM (sharp!), and public comment (for items that are on the agenda) is usually the first item. But Tuesday was also the day that council recognized Lexington’s Junior Fire Chief, and so council made time for that first.

Then, it was time for public comment. Mayor Newberry called my name and, as I approached the podium, he mentioned that I had 12 minutes. My mind scrambled a bit, as I tried to figure out where the other 3 minutes went. Did someone not sign up? Did they do so incorrectly? Since I didn’t know, and since I designed the presentation for about 10 minutes, I decided to go ahead without making a big scene.

I was atypically nervous as I approached the podium. I’m normally a pretty confident public speaker, but I was shaking. What was that all about?

I’ve been suffering from a cold for the past few weeks, and the constant coughing has meant that I haven’t been sleeping well. On top of that, I didn’t feel fully prepared – I didn’t have every detail down pat. Then, there was minute-gate. And, finally, when my presentation showed on screen, it jumped ahead a couple of slides.

Streetscapes

View more documents from Rob Morris.

Then, I started talking. My voice wavered a bit. As I got a couple of slides in, I started to feel my normal presentation rhythm. I usually flip through 6 to 10 slides per minute, and I was starting to get into the flow of the presentation. And, yet, I was still shaking…

For the most part, the presentation flowed as I planned. For the most part. The least well-thought-out section (the one where I shared my Twitter conversation with CM Martin) was where I temporarily lost track. I struggled for what seemed like an eternity, and then finally got control of the presentation again.

In the process of bungling that one section, I fear I may have given the unfortunate impression that CM Martin was some sort of “bad guy” in the South Limestone closure. He most certainly isn’t. (Sorry, Doug.)

As I approached the end of my presentation, Mayor Newberry interrupted me. “You have 30 seconds.” I felt like asking if I got more time because of his interruption. But I knew that I had only 9 more rapid-fire slides, and I knew what I was going to say, so I charged ahead, wrapping up the presentation before he could interrupt again.

GTV3 Video of Presentation (My presentation starts to 6m 30s).

Post Mortem
As I sat down, a few of those around me quietly praised the presentation. Mayor Newberry called the next speaker – who was actually one of my “supporters”. So I could have had 15 minutes after all.

As the council transitioned to their business, it wasn’t at all clear that my presentation had any impact. After I finished, there was no further discussion of South Lime, and no questions for me.

I knew I had some good points, but it wasn’t clear that any of them had connected with the council members. Then, several minutes after my presentation, CM Diane Lawless came by and told me how well I did. But Diane is such a nice person that I wasn’t sure her sentiments reflected the council as a whole.

When the “Downtown Streetscape” item finally came up on the agenda, CM Lawless ripped into the way in which the South Lime portion was executed. And then, an amazing thing happened. One by one, previously staid council members chimed in with comments about the urgency of accelerating South Limestone.

First, CM Kevin Stinnett made a motion for getting an update on what it takes to speed things along. Seconded (loudly) by CM Lawless, I then watched as CMs Jay McChord and Julian Beard reiterated their support for the motion.

In the end, the presentation did connect with a large portion of the council, and – next Tuesday – the issue of jump-starting the South Limestone project is back on the docket.

GTV3 Video of Presentation (Council discussion starts at 1h 33m. Takes a while, but it gets interesting).

The True Cost of South Limestone

September 22, 2009March 3, 2016 Rob Morris 7 Comments Local Better Lexington, Business, Community, Economic Development, Jobs, Lowell's, Streetscapes

The South Limestone streetscape project began with the closure of South Lime two months ago today, and the project is slated to continue for another 10 months. Meant to better connect downtown with the University of Kentucky campus, the project includes the widening of sidewalks, the installation of bike lanes, and the underground placement of utilities.

When the project started, we wrote about the chaotic process of closing the street and about the need for practical planning and design on South Lime and other urban development projects. How has the project evolved since then?

Not well.

Severed Artery
The closure dramatically impacted traffic patterns between downtown Lexington and the south side of our city, resulting in gnarled traffic on a number of alternative routes to downtown. At various points in the project, intersections with cross-streets (High, Maxwell, and Euclid) have also closed with little notice, adding to confusion and gridlock for downtown commuters and shoppers. In effect, the closure of South Limestone has walled off downtown from Lexington’s south side.

Several businesses along South Lime have struggled to cope with the substantial loss of customers and the physical disruption of their businesses. Last week, Joe Graviss, the owner of the McDonald’s on South Lime, pleaded with Lexington’s Mayor and Urban County Council to add extra shifts or more workers to speed the project.

City officials responded that extra shifts will not accelerate the project. The project’s manager noted that the city’s concrete supplier closed in the evenings and that local utilities were already providing personnel to assist with the location and relocation of utility lines. At one point, he admitted that he had no ideas for speeding the South Lime project along.

Vice Mayor Jim Gray – the CEO of Gray Construction and the only councilmember to oppose the project – countered the project manager’s claims. “It would be wise of us not to be extravagant in describing the difficulties of this project… With 2000 projects under my belt, I’ve never seen a project that couldn’t be improved or accelerated.”

At this point, most elected leaders and city bureaucrats seem unprepared to take significant action to accelerate the South Limestone streetscape project.

That’s because they have been thinking about the impacts of South Lime on the wrong scale.

Estimates on the price of the South Lime project vary, but the early $5.2 million estimate has ballooned to somewhere between $13.1 and $17 million. The newer, higher price was partly meant to help expedite the project.

But, as we’ll see in a moment, that price far underestimates the true cost of the project to our city, our economy, and to our future.

South Limestone’s closure is not a mere inconvenience – it is a severed artery that is bleeding the life from downtown. It demands an urgent response from our leaders. The cost to the city is too
dear to delay action, especially in this difficult economy.

Disruption: Anecdotes and Hard Data
A number of weeks ago, on the first day that the High Street intersection with South Lime was closed, I worked in my office and overheard two different customers from the south side of Lexington talk about the enormous problem of getting to our downtown shop – the confusion from suddenly closing the High Street intersection had made traffic especially difficult to decipher.

Then, we had an elderly customer from Nicholasville make an appointment for the next day, asking for directions on how to get to the shop with all of the construction. Concerned about getting lost, she decided to do a dry run the day before. After experiencing the jams, diversions, and delays, she called back and canceled her appointment.

Last month, I talked with another downtown business who is in our same industry. They were scratching their heads about why their August business “fell off a cliff”. I talked with them again last week, and their business was still much slower than usual.

Yesterday, a regular customer who owns a shop in Festival Market came into Lowell’s and opened the discussion with a flat “Business sucks”.

When I started hearing these anecdotes, I began to think that the impacts of the South Limestone closure extended far beyond South Lime. I wondered about the effects of South Lime as a customer deterrent for our business:

How many of our customers come from the south side of Lexington?
How many of those south-siders might have chosen to stay away from “the mess” downtown?
What could that data tell us about the impacts to all of downtown Lexington?

And what I saw in the data was astounding and troubling:

About 30% of our customers come from ZIP codes which would use Nicholasville Road (which turns into South Limestone) as the primary corridor to downtown
Since July 22nd – the date of the closure – we have lost one third of the business we’d normally expect from those ZIP codes. By comparison, the rest of Lexington is relatively flat or growing.
The net of this was a loss of 10% of our sales (and a much bigger hit to our profitability) directly attributable to the South Lime closure.

I disclose these facts not as a woe-are-we pity party, but as a fact-based assessment of how “the mess downtown” affects one downtown business. Our business is a relatively healthy, well-respected business with incredibly loyal customers (Last week, we won “Best Honest Mechanic” from Ace Weekly readers). And, still, the closure of South Limestone accounted for a loss of a full third of south-side customers.

Ripple Effects
Can we extrapolate from just one business to the whole of downtown? Not with any degree of certainty. But my conversations with other business owners make me believe that my business’ experience with the South Lime closure is not exceptional. Admittedly, not every downtown business is as impacted by traffic disruptions, but most are impacted in some fashion: lost customers, lost productivity, supply chain delays, etc.

Hard data for downtown Lexington is difficult to come by.

Just how much of Lexington’s $11 billion economy takes place downtown?
Which businesses depend upon the smooth flow of traffic? To what degree?
How many of their customers / employees / suppliers come from the south side?

Depending on the assumptions used, the estimate of impacts to downtown can vary wildly. Our best “conservative” estimate? Downtown Lexington loses about $360,000 each business day that South Limestone is closed. (Depending on our assumptions, the estimates ranged between $275,000 and $600,000 each day.)

That translates to between $7.0 to $7.7 million in lost business every month, or between $84 and $92 million for the year-long duration of the South Limestone project. That’s around 700 to 1000 jobs which could evaporate from downtown Lexington, especially as the closure drags on.

Are these numbers absolute? Not by any means. But they do provide a ballpark idea of the true cost of the South Limestone project.

Much of the focus on the costs of South Lime have focused on either a) the direct taxpayer costs ($17 million) or b) the costs to businesses on South Lime. And while those South Limestone businesses deserve special attention for the degree this project impacts them, our estimates suggest that our leaders and our community have been thinking about ‘cost’ on the wrong scale. There is a much bigger, much more urgent cost which must be addressed.

The irony of South Limestone – as the cycle of lost customers, declining businesses, lower employment, and more lost customers continues – is that the project may well end up strangling the very downtown that the streetscape is meant to connect with.

Our leaders frequently assert the necessity of a vibrant, livable downtown. It is time for them to live up to their words.

With the South Limestone closure, they must now choose: Will they continue to choke off downtown from a significant portion of the city, or will they act with urgency and extraordinary effort to accelerate and improve the project?

Their actions now will determine whether the prediction from our Chaos post will come true:

“And the results of the chaos are easy to predict. Confused commuters and shoppers stay away from ‘the mess’ downtown. Downtown businesses die. And, after fits and starts, Lexington ends up with a beautiful street. To nowhere.”

Time to choose.