August 26, 2010, 10:00 a.m.
Iowa City School Board Hires Governance Consultant
(bought to you by FromDC2Iowa.blogspot.com*)
The School Board (ICCSD) has announced it's going to bring in a consultant (a practice it regularly uses, most recently with drawing District boundaries and hiring a new Superintendent) to help it come up with some notion of "governance." Gregg Hennigan, "Iowa City school board may hire ‘governance’ consultant," The Gazette, August 20, 2010.
My hat's off to them, and our new Superintendent, Steve Murley, for displaying the leadership to undertake this always-ongoing "Job One," extraordinarily difficult and time consuming, but absolutely essential task.
I have written at length on this subject, during my service on the Board and since, and won't repeat all that here. However, recently a blog entry of mine from a year ago has been receiving a lot of hits. The viewership may have something do with the School Board's new effort. It was written about the Iowa City City Council's difficulties with their City Manager. "River City's Problem: Council-Manager Governance; The Necessity of Governance Theory and Practice," April 18, 2009. Here are its concluding paragraphs that someone may find relevant to the Board's current undertaking:
Most of us enter into our roles as members of corporate or non-profit boards, multi-member public bodies (such as school boards or regulatory commissions) with some notion of substance (such as "education" in the case of a school board or the Board of Regents, or a city government's functions in the case of a city council) but little to no thought about governance process.
It's something the group has to perceive as an individual and group benefit, something each member wants to do. Otherwise it won't work. Carver has walked away from what would otherwise have been very lucrative work sessions once it became obvious that there was not that kind of commitment on the part of every member of the group. (Speaking of which, there's no need to hire Carver; the school board went through the process all on its own, relying on the books.)
Thinking through what that process should be, understanding and implementing a "governance" model (there are others besides Carver's), are among the most difficult jobs a city council member will ever undertake -- and given their responsibilities that's saying a lot. It takes individual study, research, hours of analytical thought and hopefully writing, the kind that causes little drops of blood to form on your forehead and drop onto the keyboard, before you are even ready to begin the group's discussion, agreement, and drafting that can produce your own specific application of basic governance principles. Although the process can be facilitated by an outsider, the end product is not something that can be delegated to a consultant or to staff. It has to be done by each individual council member.
No wonder most city councils and boards of all kinds aren't enthusiastic about undertaking such a task.
But there's a word for those who do. They are called "successful."
And their city managers tend to stay on the job for more than 11 months.
Good luck, folks. I'll be watching with interest -- and hopefully, in the end, with admiration.
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* Why do I put this blog ID at the top of the entry, when you know full well what blog you're reading? Because there are a number of Internet sites that, for whatever reason, simply take the blog entries of others and reproduce them as their own without crediting the source. I don't mind the flattering attention, but would appreciate acknowledgment as the source -- even if I have to embed it myself.
-- Nicholas Johnson
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October 3, 2007, 6:00 a.m.
Courage, Councilors
Nicholas Johnson
Guest Opinion
Iowa City Press-Citizen
October 3, 2007
p. A12
Corporate welfare. Subsidies. Tax breaks. TIFs.
All, in effect, transfer taxpayers’ dollars to a business’s bottom line.
Do they make sense for Iowa City?
Our present and potentially future City Council members think so.
My thought? We need more community dialogue, and consensus, before perpetuating this path to public poverty.
I’m not advocating “tax cuts.” I get more from a local park or library for my tax dollar than from Exxon or General Motors for my personal dollar.
“Socialism” isn’t a nine-letter swear word for me. I like public schools, roads and police.
I also think a competitive private marketplace can be the consumer’s best friend.
It’s combining them that produces problems.
Full length books better document our Council’s folly than a column can summarize. But here are some highlights.
Corporate subsidies make no sense for Iowa City both because of the multiple categories of reasons they’re foolish for any community, and the additional reasons they’re especially silly for Iowa City.
The "opportunity costs" are enormous. County Supervisor Rod Sullivan estimates nearly $700 million of property value has been diverted from normal taxation – resulting in either more taxes for the rest of us or cuts in needed programs.
They reek of hypocrisy. How can a business simultaneously say, “Get the government off my back,” while holding out a tin cup?
Corporate welfare tilts the playing field. It’s fundamentally unfair to ask businesses to compete against a favored few funded by government. It upsets a smoothly working free market to no one’s benefit – except the lucky recipient.
If the market won’t back a project, why should the public? If private sector money isn’t forthcoming that’s a pretty persuasive indication it’s not appropriate for the public's money either.
It doesn’t work. Governor Tom Vilsack offered Maytag $100 million not to leave Newton. It left anyway. Should he have offered $200 million? I don't think so.
“Money can’t buy love.” It may buy sex – but we have another word for that. Why compete for businesses that won’t come without bribes? Let ‘em go elsewhere. Besides, a firm that likes San Diego's climate and needs port access to the Pacific probably isn't going to come here for any amount of money.
The subsidy-grantors' record’s not great. Public officials are skilled at keeping constituents and contributors happy, getting re-elected, and moving to higher office. They’re less skilled at evaluating taxpayer-funded business proposals – a lot of which go belly up, miss construction deadlines, or new job goals even with our money.
Alternative approaches do work. Businesses look for more than taxpayers’ bribes; things like an educated and skilled workforce, transportation and communication infrastructure, and quality of life – schools, parks, theaters, neighborhoods, restaurants and natural settings. Those investments will both attract business and benefit the public.
Try “seed funds.” There’s nothing to keep the business community from creating group venture capital efforts called community seed funds – as it has. Those are investments of private money, not gifts of public money.
“Need” is impossible to know. Many projects will go ahead without subsidy. If tax breaks are available, of course entrepreneurs will say they won’t act without them. But how can we know when that’s just blackmail?
Lack of transparency. It’s virtually impossible for the public and media to follow the shell-and-pea game of cheap land, tax abatements, cash grants, and other transfers of their money. Few projects would be funded if all benefits were translated into public cash on the table for voters to approve.
That’s why business subsidies don’t make sense for any city.
Why are they especially inappropriate for Iowa City? We don’t need them. We’re not in a 1930s depression with boarded-up store fronts and 40% unemployment. Our economic growth is satisfactorily driven by entrepreneurs, investors, venture capitalists and banks – plus the University.
We’re one of America’s top ranked cities by virtually any measure.
Have a little self-confidence, City Council candidates. It makes us less attractive, not more, to tell the world we, too, have to offer bribes.
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Nicholas Johnson teaches at the University of Iowa College of Law and tackles TIFs and other controversial issues at http://FromDC2Iowa.blogspot.com.
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Note: This column appeared on a two-page spread containing the Press-Citizen's endorsements, and statements by the candidates, in an Iowa City City Council primary, October 9, 2007. For links to the 12 items on those two pages today, October 3, check out the Press-Citizen's index to its opinion pages.
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September 12, 2007, 12:10 p.m.
"A TIF-kit's a Basket, With Money for the Askin'"
"Hello, I'm Johnny-with-your-Cash,"
(With credit to, and apologies for mangling, Johnny Cash's "Folsom Prison Blues.")
I see that TIF a comin'
Comin' down the track
No one seems to care much
And it ain't turnin' back
That engine looks so funny
We used to feed 'em coal
Now they burn our money
With wealthy on the dole
Their golden rule's a changin'
Our Council thinks we're fools:
"Those that have the gold, boys,
Are those who make our rules"
"So shut up and pay your taxes,
And don't forget to vote.
The rising tide's that's coming,
Will lift our leaking boat"
Yes, folks, it's TIF time in Iowa City once again; a time to sing, dance, drink and celebrate.
TIFs, which our City Council candidates think are one of the best ways to divert what would otherwise be general property taxes for the benefit of all of us into grants to individual wealthy business persons, were originally designed to help the poor, build low income housing, and fix up blighted areas. They didn't make much sense then (if it's a worthy public project let the City own it, as long as the City's paying for it), and they make even less as a "rob the poor and give to the rich" scheme.
The next TIF coming down the railroaded track in Iowa City is designed to help that underpriviledged, economically depressed sub-group in our local population we call medical doctors! Hieu Pham, "City considers TIF for surgical center; If OK'd, would get tax rebates from '01 to '13," Iowa City Press-Citizen, September 12, 2007, p. A3.
How much? $600,000. The doctors' executive director says, "We're excited about it." Yeah, I expect they are. Wouldn't you be excited if someone would agree to pick up $600,000 of your property, or income, tax bill?
Don't get me wrong. I'm alive because of doctors. I like doctors. "Some of my best friends are doctors." Doctors are brighter than the rest of us, well-traveled, good writers (with the exception of their handwriting on prescriptions), great story tellers, good musicians -- and many really are compassionate conservatives (especially pediatricians).
Moreover, I actually like their idea. It has merit. I just think that the risks associated with whether it has economic merit ought to be theirs rather than mine -- especially since they haven't proposed to share the profits with me if it succeeds.
What's next, a taxpayer-funded private dental clinic? The dentists have already trained us to believe that we should put our money where our mouth is. So why not our tax money as well?
You sure can't blame the doctors for trying to get the taxpayers to fund their for-profit company so long as the money is so freely being handed out to others. Shucks, I've even got my application in for a TIF for my backyard tool shed. It sure will cost the taxpayers a lot less than what these doctors want. I haven't heard anything back from the Council yet.
I know a couple guys living under the bridges where I bike who would actually like to use a TIF for its original purpose: building low income housing. They tell me they haven't had any better luck with the Council than I have; not a lot of enthusiasm among the City Council candidates. And the nights are already getting colder.
Oh, well. Now they won't have to walk all the way to Mercy Hospital when they get pneumonia.
At least I assume there will be a "free clinic" at our new, taxpayer-funded "outpatient surgical center." Won't there? Gee, I guess you're right. Hieu didn't really write anything about that. Maybe the editors just cut that part of her story.
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P.S. Normally I don't respond to comments. I like to leave as much opportunity for readers' dialog as possible (within some bounds) -- thoughtful, and not so much, critical and agreement.
But since Irl Tubbs has suggested in his 12:14 p.m. comment that I am lying ("a TIF is not taking tax money from someone else . . . the author believes that if he tells a lie long enough...it will be the truth") I thought a brief reply might be in order.
Does this lighthearted blog entry overly simplify TIFs? Absolutely.
Is it a "lie"? I think that's both inaccurate and unnecessarily harsh.
1. If you save me an expense, that is the financial, the bottom line, equivalent of my (a) paying that expense, but then (b) getting that amount of cash from you. On the other hand, if you cause me an expense that, but for you, I would not have had and that does not benefit me, that is the equivalent of "taking money from" me.
2. Cities can't print money. They depend on tax revenue. That revenue changes from year to year with both tax rates and property values.
3. When a city's revenue declines -- for any reason -- it is presented with two options: (a) increase taxes ("taking tax money from someone else"), or (b) cutting City programs benefiting the entire community (the equivalent of "taking tax money from someone else").
4. Why does a business person want a TIF? Because there is a financial benefit associated with it. It may involve getting land for a price well below market -- up to and including for free. It may involve the City paying for features required by a given business project that, but for the TIF, would not otherwise have been paid for by the City. It may involve paying what the normal taxes would have been on the property and project and then getting an immediate rebate of that tax payment in whole or in part.
5. Whatever the details may be for a given TIFed project, the fact is that the City is, for a given year during the applicability of the TIF, ending up with less property tax income from the TIF-ed property/project for that year than it would have received had the project gone ahead (as a part of the free private enterprise, entrepreneurial, capitalist system) without the TIF (or other government subsidies) having been granted.
6. As in any group project (which a tax-funded community is) if one member of the group does not pull his or her weight, put in their time, do their share of the work, show up on time, has their hand in the till -- or fails to pay their fair share of the expense -- the net effect is that either someone else has to pick up the slack or all will end up getting less out of the project than they thought they would.
7. Given the nature of the above blog entry I didn't want to have to (and did not feel it necessary to) get into this level of detail. Having now done so, hopefully anyone who shares Mr. Tubbs' view can see why, with very little literary license, I don't think it's a "lie" to say that the TIF beneficiary is, in effect, "taking tax money from someone else." Frankly, I don't think I actually said that anyway. But if I had (or did) I think it's a perfectly legitimate simplistic way to communicate what's going on.
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