Sunday, February 12, 2012

Oops! It Leaked Out!

On behalf of The Greensboro Partnership, a nonprofit, taxpayer funded organization dedicated "to serve as the principal economic and community development organization in Greensboro, NC.", Garner Economics LLC produced the following economic study titled, Local Specialization, Competitiveness & Growth as part of the lead-up to the Greensboro Strategic Plan which, among other things, call for a sales tax increase to fund entertainment and development for the rich But for some unknown reason the following document is not being made available to the public. Why?

Local Specialization, Competitiveness & Growth

Below are general observations from an in-depth analysis of industry sectors, occupational groups and industry clusters in Guilford.

Over the last five years the greatest job losses have come from the Manufacturing industry sector, down 7,352 jobs or 19 percent.

Over the last five years the greatest job losses have come from the Production occupational group, down 5,326 jobs or 18 percent.

In 2010 Guilford County Schools composite SAT scores were below the state, nation,

From 2002 to 2009 the number and proportion of workers who both live and work in Guilford County has declined, down 15.9 percent or 22,986 fewer workers (Figure 18 and Table 18). Workers who both live and work in Guilford comprise 49.2 percent of the county’s workforce in 2009, compared to 57.8 percent in 2002.

In 2009, the inflation adjusted real GDP for Greensboro-High Point was $28.6 billion (Table 21). The figure was 6.5 percent below 2008, and mirrors a decline experienced by 80 percent of all U.S. metros.

Since 2001 per capita GDP in Greensboro-High Point has fallen below the nation, declining by 7.5 percent.

Table 21 Gross Domestic Product Greensboro-High Point (2005 dollars) Year GDP
Source: US Bureau of Economic Analysis

Over the last ten years, the nominal (unadjusted for inflation) average wage per job in Guilford has increased by 29.7 percent; the pace is below the nation, state and all benchmark communities. Over the five most recent years, the rate of growth is 12.4 percent in Guilford, again, below the nation, state and all benchmark communities.

Over the last ten years, growth in real values for the average wage per job in Guilford has increased by just 0.7 percent ($226), and in the last five years has declined by 1 percent (-$379)

As of May 2011, total employment in Greensboro-High Point is down 9.1 percent or 33,900 fewer jobs. The rate of job losses over the last five and ten years (-7.4 percent) is greater in Greensboro-High Point than in the nation, state and all benchmark geographies

Over the last five years the greatest job losses have come from the Manufacturing industry sector, down 7,352 jobs or 19 percent (Figure 39 and Table 33). The majority remaining absolute losses came from Construction (down 5,781 jobs or 30 percent) and Retail Trade (down 4,656 jobs or 13 percent). Of nineteen major industry groups, losses were experienced in nine. The largest absolute gains came from the Finance & Insurance sector (up 1,708 jobs or 9 percent), followed closely by Health Care & Social Assistance (up 1,620 jobs or 5 percent) and Government (up 1,318 jobs or 4 percent).

Almost all new jobs in the U.S. are created by entrepreneurial and innovative firms, with an average age of 25 years (firms) and in all sizes. Economic growth of a community typically drives small business startups. But new business startups have a high failure rate. The reality is that most small business owners are not entrepreneurial and are likely to remain small6, so it’s imperative that any entrepreneurial program be focused on those companies and individuals that have the greatest chance of being economic generators for the community and export goods and services, which is a wealth generator.

Free Wireless in the CBD: The City of Greensboro should install free wireless broadband in the central business district. This largely symbolic effort downtown will show mobile entrepreneurs that the community has embraced technology and supports mobile entrepreneurs (people who can work anywhere but select a community based on the quality of place and physical assets of a location).

Economic growth and development occurs when a community can provide a competitive advantage and create an atmosphere of success for individuals and firms when they make a capital investment in the community. Government’s role is to provide a business climate that nurtures and promotes effective growth without being onerous for businesses of all sizes to operate profitably.

The Partnership should engage the University of North Carolina at Chapel Hill School of Government to conduct a Cost/Benefit Analysis of consolidated government, or at the very least, consolidated services in Guilford County.

The City of Greensboro has an assistant city manager whose responsibilities include economic development assistance.

Probably no comment was heard more frequently in the focus group meetings from respondents than how challenging the business climate of the city and county are from having so many elected officials that are unfriendly towards business. In fact, one quote that was echoed by many in a large focus group was, “I think we have a 19th century government structure in a 21st century world.” Another comment that was equally reacted to with voices of agreement was, “We have to figure out a way to get the private sector leaders more engaged in the local politics. We need a local government that is pro-business and there to help rather than hinder.” Both the City of Greensboro and Guilford County ranked 2.73 and 2.70 respectively in business climate rankings from all respondents that weren’t part of the government focus group (on a 1 to 5 scale with 5 being the best), clearly noting that no one should accept that it is business as usual or that the status quo is acceptable.

In a twelve month period ending June 30, 2011, Guilford County received $61,451.605.52 in gross monthly sales tax distributions. Of that amount, $59,693,731.57 went to the County’s General Fund (and a portion of that was earmarked for School Capital expenditures); the balance went to special districts, such as fire protection districts in the County. Based on the same twelve month period and using the Article 39 sales tax—which is a one-cent tax as a base—a one-cent sales tax would generate approximately $29.7 million, of which the County’s General Fund would be entitled to $28.8 million if the distribution method is comparable to the Article 39 tax.

Option 1 - The North Carolina Legislature would follow the example of the Texas Legislature in 1979 and give the residents of any county or city in the state the option to vote in a sales tax with a sunset provision, whereby the tax would need to be voted on for a renewal every several years. Based on our analysis of the Texas model, this effort was led by one Legislator who had the courage and vision to champion this cause. We encourage the Legislative delegation representing Guilford County to do the same.
Option 2 - Work with the appropriate powers that be to create a special tax district for Guilford County to achieve the same result.
Best practice examples: Topeka, KS; Charleston, SC.
Other funding options – special purpose tax: These taxes are similar to sales taxes with the difference that they apply only to certain activities and transactions, as opposed to broad-based sales taxes, which apply to most retail purchases. Examples of special purpose taxes include a tax on car rentals, or an additional tax on hotel and motel room rentals. Revenues from these taxes can finance economic development departments or agencies, or product such as industrial parks, or incentive offerings. Car rental and hotel-motel taxes are politically popular because of a perception that the burden of the tax falls the heaviest on visitors to a city, such as business travelers, who are likely to stay in hotels and rent vehicles while in the areas for business.
At the year ending June 30, 2011, there were 154,889 cars rented from PTI. A $2.00 tax per rental would generate nearly $310,000 per year, which could be leveraged to pay bonded indebtedness for product, or could be used as a revolving loan amount or for venture capital.

Participants mentioned public (and to a lesser extent, private) leadership challenges as a downside to the City/County. Some participants identified the need for jobs, a perception of an undereducated populous, and a sense that the Greensboro area is not well known.

Challenges (8)
o Not fully coordinated
o Leadership challenges
o Public/private leadership *
o Political infighting
o Divided
o Intense
o Not well known
o Need jobs
o Undereducated populous
o Untapped potential

What do you believe are the five greatest needs for the community/region in the next 10 years?
The needs mentioned with the most frequency were government leadership; business recruitment and economic development; improved K-12 education; regional collaboration; brand identity/public relations; job growth; enhanced air service at the airport; and infrastructure.

o Fiscal discipline
· Government leadership (8) *
o Business friendly attitude
o City government must work together
o Visionary leadership in government is needed
o Improve the quality of local political leadership
o Encourage and support new candidates

There is consensus that there is tremendous amount of difficulty in the government arena within the county and city, particularly as it relates to doing business in the area and as it relates to policy makers and implementers. A reoccurring theme is that the city and county are unfriendly to business and that it’s onerous to do business in the community. There is rampant frustration with elected officials.

Elected officials (8) * *
o Chair is not elected at large (state legislation on this is in flux)
o Need term limits for elected officials
o Need to alternate terms and lengthen to 4 years
o Divided city council
o Elected officials don’t meet on a regular basis
o Inconsistency in decision-making
o We don’t communicate enough among ourselves (as stated by the Government focus group)
o Territorial in-fighting
o Lack of willingness to partner
o City and County find reasons not to work with you *
o Business leaders are treated poorly
o Not working together between City/County *

Government (7)
o City employees are afraid to make decisions
o Decision-making and political process is not in sync for both city and county
o Hard to get anything built and constructed *
o Development process is onerous with city
o Inconsistent enforcement of existing policies *
o No consistency among laws and regulations among state, county, city
o The management employees in city and county government are above average
· Vision (2)
o City has a short-term vision
o County does not trust business *

County (3)
o Guilford doesn’t have shared vision
o It’s easier to do business here than in Mecklenburg County
o No confidence in our county leadership

Other (4)
o Reluctance to change
o State has supported legislative agenda of Partnership
o Workforce entrenched in old business
o Greensboro exposure during national sport events that are televised should be a priority
o “For those of us who try to run businesses, it’s darn difficult to get things done.”
o “If you showed our business climate scores to every elected official, they should be embarrassed, and they’re not.”

Economy/Income (8)
o Recession; per capita income is down
o High percentage of free and reduced lunches
o Lack of customer base and business-to-business opportunities *
o Large budget deficits
o Loss of traditional industries *
o Jobs loss more than other counties
o Economy is a problem and has affected workload
o Market size and demand has shrunk

Divisiveness (6) *
o Distinct variations in quality of life in the community
o Divisiveness *
o Negative undertone, particularly of weekly newspaper
o Grudges and retaliation; an “owe me” mentality
o Pettiness

Income/Wages (4)
o Declining personal income
o Free and reduced lunch program has increased; higher public assistance *
o Poverty rate
· Jobs (8) *
o Jobs for recent college grads
o Jobs–lost high paying jobs that have not been replaced
o Large underemployment/unemployment base *
o Limited/no job opportunities
o Lack of high paying jobs
o Lack of jobs leads to systemic problems; related issue of housing *
o Lack of middle jobs, challenge in spousal employment *
· Leadership (4)
o Need leadership with new ideas, including civic, elected, and business leadership *
o There is a willingness and readiness to follow
o Negative perception among young people

Other (8)
o Center for Creative Leadership
o Ranked 2nd “Holiest city”
o Proposed Horse Park of the South
o Natural Science Center
o Strong sense of volunteerism
o Resource rich for human services
o Engaged citizens

Engage ideas of Leadership Greensboro and other young leaders; old guard needs to step back and let fresh ideas flow

Special interest groups should be careful when attempting to influence policies; listen to what taxpayers want, not just what they think is important.

According to the John Locke Foundation, Guilford County has the 14th highest tax burden in NC out of 100 counties.

East Greensboro has been in constant decline for over 50 years while downtown has been on the rise. If a Greensboro Performing Arts Center is to be built then it should be built inside the little green circle

Continue to article #39 Confirmation bias