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DAVID ROSMAN: Enhanced enterprise zone an immoral enterprise

Thursday, June 21, 2012 | 6:00 a.m. CDT; updated 9:01 p.m. CDT, Sunday, June 24, 2012

Monday night’s City Council meeting is not going to fade into the annals of history quietly. Those opposed to the enhanced enterprise zone designations made sure of that.

The argument: To designate an area as an EEZ, a portion must be declared as "blighted."

Blight has become the newest insult added to our lexicon as something more than "a deteriorated condition (urban blight)." It is the newest battle line between a pro-business government and local citizens, one side seeking economic development, the other side not wanting to be labeled as somehow inferior or diseased.

It is a question of the definition of "blighted area," as often seen in statutes, defining blight as those conditions that endanger life and or property. Unfortunately, the state’s definition also includes "morals" in reasons for declaration of a blighted zone.

The Missouri Revised Statutes adds to the definition to include having "pervasive poverty, unemployment and general distress, and (2) At least sixty percent of the residents living in the area have incomes below ninety percent of the median income of all residents."

Now this is not supposed to be an easy criterion to meet for more than the obvious surface reasons.

Though Columbia’s unemployment rate is lower than the national average, we have not added jobs that do not require a college degree. In fact, Columbia’s manufacturing business has taken a tumble as we concentrate on technology, university and finance careers.

Columbia’s median income, at $42,800 or about $21.40 an hour, is lower than both the Missouri ($45,000) and national ($50,600) median incomes. This indicates that despite Columbia’s focus on the university and colleges, hospitals and banks, there are too many jobs that fall into the lower end of the income schema. Read this to mean too many jobs are in retail, which pay less than $20,000 annually if the employee is permitted to work full time. Few are.

Using these figures, a blighted area needs at least 60 percent of its population to have an income below $38,520. Darin Preis, executive director of Central Missouri Community Action, told me that a family of four would need an annual income of about $38,000 to get by without falling into deep debt. Poverty, as defined by the Department of Health and Human Services, for the same family is $23,050. For assistance to survive, many federal and state programs use 150 percent of poverty, or $34,575.

Poverty is only a few cents away for many, and the areas targeted by the EEZ represent the lower income bracket of Columbia’s working class. Why does the City Council want to harm the working poor in the name of economic development?

Then there is the problem with the term "morals." Exactly whose morals are going to be used here? Those of the upper income bracket and industry? How about biblical morals? Secular morals? Morals made up on the spot?

In their upcoming book, “The Betrayal of the American Dream,” authors Donald Barlett and James Steele rail against “trickle down” economics and the “1 percenters” who seem to control the American financial and legislative arenas. Yes, our City Council members do not fall into this elite community, but some seem to be representing industry over citizenry. Are the morals of the council now equating to make money, hoard money and pay as little as possible to increase corporate wealth to meet financial criteria?

Mind you, this is not all corporations, and the few factories we still have in Columbia and Boone County seem to be here at least in the short term.

The ultimate question might be: Is it fair that we treat those in the upper 10 percent better than the lower 50 percent of our citizens?

David Stokes of the Show-Me Institute told the council Monday that enhanced enterprise zones and similar economic zones are usually unsuccessful. He called these zones a "dirty little secret that nobody seems to want to recognize," lowering local tax base, requiring more government intervention and possible abuse of eminent domain.

It appears that the proposed EEZ will do more economic harm than good and is morally repugnant.

I urge the City Council, the new EEZ Board and business leaders to consider what they are about to do to those who live in the proposed enhanced enterprise zone, those who work hard, pay their taxes and vote, and those who happen to earn less than $40,000 annually.

They are as important as our local millionaires.

David Rosman is an award-winning editor, writer, professional speaker and college instructor in communications, ethics, business and politics. Questions? Contact news editor Laura Johnston.


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Comments

Jim Jones June 21, 2012 | 10:56 a.m.

The question about 'whose morals' is an interesting one. Some would be so crass as to say that if it is the government deciding, and government has no conscience, then there are no morals involved. OR one could be very critical of politicians by saying that they wouldn't know a moral if it bit them on their ---!

(Report Comment)
Michael Williams June 21, 2012 | 11:29 a.m.

Rosman may have confused "morals" with "ethics".

Ethics is the branch of philosophy which determines right or wrong.

Morality is whether you follow your ethics.

Hence, if your behavior reflects your ethics, you are a moral person. If your behavior does not reflect your ethics, you are an immoral person.

My read of Rosman's missive is that he has confused the two, especially when he writes:

"Then there is the problem with the term "morals." Exactly whose morals are going to be used here? Those of the upper income bracket and industry? How about biblical morals? Secular morals? Morals made up on the spot?"

(Report Comment)
Ray Shapiro June 21, 2012 | 12:31 p.m.

@MW:
So for morality sake, should Rosman eat his own words as that would be the morel thing to do, but not his ethics as there's not mushroom?

(Report Comment)
Jack Hamm June 21, 2012 | 1:21 p.m.

Mike:

Unfortunately for you the dictionary agrees with Rosman:

From dictionary.com:

"Morals refers to generally accepted customs of conduct and right living in a society, and to the individual's practice in relation to these"

http://dictionary.reference.com/browse/m...

Ray:

That comment is an insult to the English language. Between you and Frank I'm starting to wonder if they taught English back in the day.

(Report Comment)
Michael Williams June 21, 2012 | 3:10 p.m.

Jack: Your own definition says you're conclusion is wrong.

The words "...generally accepted customs of conduct and right..." and "...to the individual's practice in relation to these..." refer to ACTIONS in response to an already-decided ethic(s).

An "ethic" is a decision about what is right or wrong.

You are moral or not moral depending upon whether you practice what you preach.

(Report Comment)
Ray Shapiro June 21, 2012 | 3:22 p.m.

("Ray:
That comment is an insult to the English language.")
Insulting to the English language, or just a damaged humerus bone? Either way, is that comment based on your own morality and/or ethics or do you just place a higher value on literal English over punning?
("Trust me, I'm a philosopher. Believe me, I have a beard.")
http://www.philosophersbeard.org/2010/10...
("Changing Minds-
Values, morals and ethics")
http://changingminds.org/explanations/va...
And, in addition to values, how do politics and legalities play in Rosman's article?

(Report Comment)
Ray Shapiro June 21, 2012 | 3:51 p.m.

I also wonder if The Missourian values their comment section as much as they have in the past.
All too much, if you click on the article by title, it pops up with no comments below.
However, if you click on a comment, it comes up at the bottom of the article.
Why are articles, which have cyber-space comments, often coming up without their comments?
Is it a computer glitch worthy of correcting?

(Report Comment)
Michael Williams June 21, 2012 | 4:03 p.m.

Ray and the missing, hiding comments:

I have this problem, too, except there is no rhyme or reason when the comments disappear. Sometimes there are no comments (when I know there are) when I click on the article, and sometimes the comments are there.

Same thing happens when I click on the comment itself. Sometimes yes, sometimes no.

It's been especially bad today and yesterday. I tire of it, especially when it takes 2-5 times to get the comments back.

(Report Comment)
linda green June 21, 2012 | 4:24 p.m.

Here's another moral question: If two cities are supposedly competing to see which can cut their tax base the most to entice a corporation to their town, what happens to the schools of the children in those two cities?

Answer: children in both places lose, because both places have cut education funding. How moral is it to cut education funding of any children?

Also, you can google the following, which gives specific data about the consistent failure of EEZs to provide benefit in Missouri:
http://showmeinstitute.org/publications/...

Here's the intro:
"Measurements of Enterprise Zones: Comparative Economic Growth in Missouri Counties
By David Stokes, Monday, June 18, 2012

"The dirty little secret that nobody seems to want to recognize, or even attempt to uncover, is that EEZ, Tax Increment Financing (TIF), Community Improvement Districts (CID), and other subsidies do not work. They do not succeed in growing the local economy. The panoply of subsidies that come into play when a large area is declared blighted can have a number of adverse side effects. They shrink the local tax base, encourage more government planning of the economy, and increase the chances of eminent domain abuse. As a famous Swedish economist once said, “It is not by planting trees or subsidizing tree planting in a desert created by politicians that the government can promote . . . industry, but by refraining from measures that create a desert environment.""

Columbians have not been shown data which prove that EEZs are a viable jobs program or that the economies of Missouri cities have benefited from them.

Due to insufficient data, Columbia's City Council should not establish any EEZs in Columbia.

(Report Comment)
Ray Shapiro June 21, 2012 | 4:45 p.m.

@linda green:
("How moral is it to cut education funding of any children?")
It's very moral if you can educate children better with less money.
More money does not ensure improved education of children.
Do you value efficiency and results over wasted dollars being pumped into the public schools?
("Science, Religion, Markets and Morals:")
http://blog.beliefnet.com/roddreher/2010...
("Money And School Performance:")
http://www.cato.org/pubs/pas/pa-298.html...

(Report Comment)
Michael Williams June 21, 2012 | 4:47 p.m.

Linda: I've mainly been on the sidelines with this, but I have a question:

If a new company benefiting from an EEZ hires...say 100 people...and most of the new employees are from out of town (i.e., newcomers), and they buy new houses (the town is growing in population), won't they pay property taxes that mainly go towards the schools?

I think "yes", but I don't know where the breakeven point is, tho.

From my distant perspective, I don't like the prospective use of eminent domain, no matter how city fathers try to sooth the concerns. After all, the current city fathers won't be here 5-20 years from now. I remain unconvinced about "no eminent domain" statements.

PS: There are areas of Columbia that I would consider as "blighted". Mainly I make this description based upon visual observation. Some places are just butt ugly.

(Report Comment)
mike mentor June 21, 2012 | 5:01 p.m.

Linda says...

"Here's another moral question: If two cities are supposedly competing to see which can cut their tax base the most to entice a corporation to their town, what happens to the schools of the children in those two cities?

Answer: children in both places lose, because both places have cut education funding."
_______________________________

Wrong!!!

Which is more?

25% of $1,000,000

or

35% of $500,000

If you can answer this question correctly you should see the problem with Linda's assertion.

Not to mention that, if in her example, neither city chooses to bargain with the corp and the corp goes to city 3 somewhere else, how much has either of the two original cities helped their kids?

tax base-same, unemployement-same

City 3 that bargained saw these positives...
tax base-increased
unemployment-decreased
Po'd progressives-increased (he he just kidding...)

Now, the devil is in the details. Like any other business deal, you try not to give up too much margin if you don't have to and you try to protect the relationship with your other customers as much as possible. Not easy going, but seems beneficial if done effectively (I just coughed up a lil' at the thought of government employees doing anything like this effectively.)

My only problem with this is the property rights of those folks who become "blighted" and how all that plays out. I am not up to speed on this part and thus don't have a definitive stance on this one yet.

(Report Comment)
Ray Shapiro June 21, 2012 | 5:04 p.m.

Will the residential property taxes be reduced for home owners in these blighted designated/EEZ zones?
Will the city utilize eminent domain to "steal" properties for corporate use?
How do the Columbia Housing Authority and the Public Schools benefit from blight and EEZ?
Is this blight/EEZ push the dream child of our Chamber of Commerce, local Muleskinners, or some other outside source?

(Report Comment)
Tom Wood June 21, 2012 | 5:06 p.m.

The first time I heard the details of the plan to "Blight Columbia to create an EEZ," I knew that "Something wicked this way comes." In every burg, town, or city, there naturally accumulates a set of "Good Ol' Boys" who'd like to use their relative money, power, and influence to twist laws to favor themselves over the "little people." They may not be members of the "Actual 1%," but they influence local events, to the detriment of normal, hard-working people. The book by Greg LeRoy, "The Great American Jobs Scam: Corporate Tax Dodging and the Myth of Job Creation" does an outstanding job of explaining how their "dirty tricks" are applied. Columbia's approach to cramming the EEZ down the citizens' throats is a classic example of this - done poorly. The City Council and REDI want the citizens to just quiet down and pay the bills so those who proposed it can rake in "their" money. We have a duty to make sure that this NEVER happens, one way or another. With a couple of exceptions (if you've attended any Council meeting, you know who they are), the whole bunch should be sent packing. Columbia should NOT be a city where the Rich get richer at the expense of the average tax-payers.

(Report Comment)
Michael Williams June 21, 2012 | 5:10 p.m.

Linda: ("How moral is it to cut education funding of any children?")
__________________________

As a last resort, the acts of citizens are the only mechanism to change the way in which we give a public education. Many of us have lost confidence in government officials/senior educators that have to-date dictated how we give this education. We want changes (many of us here have listed them), but to us changes do not seem forthcoming.

In the end, withholding/cutting funds (via our vote) is the last resort.

(Report Comment)
mike mentor June 21, 2012 | 5:22 p.m.

I happen to have some interesting statistics at hand on the educational spending sidetrack discussion...

The first school district below is one of the 10 poorest districts in the nation and spends $16,323 per student and has miserable results to show for that expenditure. The second school district is the 3rd richest district in the nation and spends almost the same amount per student, but has dramatically different results.

My take: It's the parents, not the money!

>Median household income: $18,980
>Pct. households earning $200,000+: 1%
>Pct. households earning less than $10,000: 6.2%
>Expenditure per student: $16,323
>Pct. local funding: 51%

The Centennial School District in San Luis, Colo., has three schools for the area’s 220 students. Residents in the area are extremely poor, with 30% of households receiving food stamps or some form of government assistance. The expenditure per student, $16,323, is higher than the national average. Despite relatively high per-student spending, less than half of Centennial School students met proficiency levels of the Colorado Student Assessment Program state exam in 2010-2011 school year. Less than three in four adults in San Luis have a high school diploma, while only 11% hold a bachelor’s degree.

> Median household income: $199,167
> Pct. households earning $200,000+: 59.8%
> Pct. households earning less than $10,000: 1.9%
> Expenditure per student: $16,807
> Pct. local funding: 76%

The only school district outside Westchester County, N.Y., or Fairfield County, Conn, among the 10 wealthiest districts is Riverdale School District, where the median household earns almost $200,000 a year. With a median home value exceeding $1 million, the district is able to collect property taxes as needed to fund its educational initiatives. Though the district spends less per student than any of its East Coast counterparts, this has not limited educational success. Roughly 80% of 10th grade students met or exceeded state standards for math and more than 90% met or exceeded standards for reading. In both cases, Riverdale High School students far exceeded state averages for the Oregon Assessment of Knowledge and Skills tests.

(Report Comment)
linda green June 21, 2012 | 9:09 p.m.

All other things being equal, would you rather your child go to a school
that had the money for a nice building, for good salaries for teachers,
for computer equipment and for books--or not?

As far as where companies locate, here's a bit from Greg LeRoy's book,
"The Great American Jobs Scam: Corporate Tax Dodging and the Myth of
Job Creation" (read the whole book online for free
at: www.greatamericanjobsscam.com.). Chapter 2 is called,
Site Location 101: How Companies Decide Where to Expand or Relocate
Here are some quotes:
"[As a businessman] I never made an investment decision based on the Tax Code . . . [I]f you are giving money away I will take it. If you want to give me inducements for something I am going to do anyway, I will take it. But good business people do not do things because of inducements, they do it because they can see that they are going to be able to earn the cost of capital out of their own intelligence and organization of resources.
—Paul O’Neill, former CEO of Alcoa and President George W. Bush’s first Secretary of the Treasury 1

LeRoy says, How companies decide where to expand or relocate is not rocket science. Their decision-making process is driven by business basics; subsidies rarely make a difference. The trouble is, the way the system is rigged, companies are getting huge subsidies to go where they would go anyway."

See a whole lot about jobs and data on tax giveaways for corporations at LeRoy's site:
www.goodjobsfirst.org.

(Report Comment)
Michael Williams June 21, 2012 | 10:03 p.m.

Linda asks: All other things being equal, would you rather your child go to a school that had the money for a nice building, for good salaries for teachers, for computer equipment and for books--or not?
_______________________

That's not the issue in my book, so you've asked an irrelevant (and emotional) question.

The issues are a demand problem for teachers (therefore low pay), teachers unable to say who stays and who goes in their classes, methods of teaching, the curricula, too much paperwork, too many discipline problems in schools, too much fed money involved, nonlocal control of curricula, too much tenure, too little competition of schools for students, to much reliance on electronics, too little writing, incompetent boards and superintendents, principals with little power in their schools, too many legal issues, too many teachers' unions, unreasonable retirement ages, unreasonable (and unsustainable) pensions.....I could go on.

What you don't understand is there are many of us willing and waiting to vote for school $$$ increases. I'm one of them.

But we see little use in pouring money down the same rathole it's gone into for the last 40 years.

Nope.

I'm on a voting strike, and many others are, too.

Until we see REAL change. Lip service doesn't cut it anymore.

(Report Comment)
Carol Greenspan June 22, 2012 | 1:12 a.m.

Roisman notes that a blighted area has to have "[a]t least sixty percent of the residents living in the area [with] incomes below ninety percent of the median income of all residents." For Columbia, this is $38,520. It is quite bizarre to me that an income within 10% of the median income of the area would be able to be used to blight an area! The median income is that income where half of the incomes are higher and half are lower. This figure also does not take into account family size. $38,520 for a single person is quite different than this amount for a family of two or more people!
Mr. Preis believes that falling below the median income means a family of four will necessarily fall into deep debt. I find this insulting. It would be interesting to actually determine the debt levels of people in Columbia, but I strongly doubt such data exists. YES, if there is a medical crisis in a family, this could be true. Is this problem one of not enough income or an archaic delivery system of medical care, unique in the developed world? [a rhetorical question here]
SO, returning to Rosman's main point: "Blight has become the newest insult added to our lexicon.. It is the newest battle line between a pro-business government and local citizens, one side seeking economic development, the other side not wanting to be labeled as somehow inferior or diseased."
So, should those businesses which pay below the median immediately raise all salaries to the median so as not to label their employees as "inferior or diseased?" or should we consider the criterion as "diseased," labeling half our hard working citizenry as inadequate due to the ability of the employers to force employees to work for low wages?
A much more practical solution is to note those jobs which are in demand and set up available educational resources to train people in these fields. As Leroy mentions in his book, when there is a trained/educated labor force, companies locate in those communities.
Meanwhile, what is more immoral, labeling hard working people inferior for earning in the bottom half of incomes or being those people making such judgments? Anyone who has been in a health care facility and encountered the many wonderful people who do the actual personal care duties at low wages, anyone who has been in retail stores and been waited on by knowledgeable respectful employees can easily answer this! Thank goodness for such people. They have my gratitude.

(Report Comment)
Mark Foecking June 22, 2012 | 4:04 a.m.

I still don't have a strong opinion on this, because the fundamental problem is there aren't a lot of manufacturing type jobs being created in the US anymore. It's so much cheaper to make things in Asia and ship them here that we mostly do it that way.

When one company decides, say, to outsource its manufacturing to save money, that puts their competitors at a disadvantage. They can either improve efficiency/productivity (if possible), or outsource themselves. We've wound up doing much more of the latter, because for many industries there's only so much more productivity to be wrought from your processes or work force. So here we sit - you can have cheap goods, lots of jobs, or high wages. Pick any two.

LeRoy wrote (linda green):

"Their decision-making process is driven by business basics; subsidies rarely make a difference."

However, once one community starts offering incentives, if all else is equal (or close enough), the business is going where the incentives are. So other communities are faced with a classic market competition scenario, and in order to compete, have to offer incentives also. Companies that are expanding manufacturing type jobs are rare enough that they can ask for these concessions.

This rarity is why I think we could form an EEZ, or not, and not be able to tell the difference five years from now. Because the problem isn't lack of incentives, fundamentally it's globalization.

DK

(Report Comment)
Ray Shapiro June 22, 2012 | 2:53 p.m.

As far as I'm concerned, I would rather see crime stats being used to determine blight then earned income of the residents.
The amount and nature of these crimes have a greater impact on the quality of life in these areas/wards.
Also, why not just blight/EEZ non-residential tracts of land, instead of "red-lining" residential areas, unless the city is willing to collect less property tax money from these home owners.
It also seems a bit of an insult from Rosman to employers seeking a place to set up shop.
But, what can you expect from an Occupy sympathizer who takes the progressive stance of vilifying corporations.
In fact, if he wanted to do something productive, he could have focused on how to increase small business opportunities for Columbians, if he has something against "big business."
That would have at least made a much more moral column.

(Report Comment)
David Rosman July 4, 2012 | 11:07 a.m.

Good discussion folks.
1) Ethics is the study of what is just or unjust, right v. wrong.
2) Morals are the practices by each community of their version of right v.wrong. Those moral differ between individual societies, including moral between churches of the same sect, classrooms, bowling leagues, nations...

So the question, again, is whose morals or rules of right v.wrong do we follow? With only a few exceptions, those rules are secular-Humanist in nature.

The second part of this column is due in Thursday's paper.

David

(Report Comment)
Michael Williams July 4, 2012 | 12:07 p.m.

David: So the question, again, is whose morals or rules of right v.wrong do we follow?
_____________________

Referee, anyone?

Otherwise, it's just a "I'm right, you're wrong" argument, and you have no more of a claim to "right" than I do.

Which, of course, is why secular-humanism offers no solutions outside of competing brainpower.

(Report Comment)

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