Tag: Allentown NIZ

A Note About Class Warfare and the Earned Income Tax

~ Chris Cocca ~ 2 Comments

When the powers that be saw urban cores diversifying racially in the 60s and said “here’s a good idea: lets move the hell out and take our EIT with us,”  that was class warfare.  And the poor have been losing ever since.

Bill O’Reilly addresses what he sees as the real problem with Mitt Romney’s “I’m not worried about the very poor” comment here, saying that the real causes of continued poverty are “poor education, addiction, irresponsible behavior and laziness. That’s right far-left people. Some folks are lazy.”

O’Reilly’s right, of course, that each of these things contribute to poverty.  But some of these things, like poor education, are systemic causes.  Saying “some folks are lazy” doesn’t square with calling laziness a systemic root of poverty.  That collapses into race-baiting buzzwords and O’Reilly knows better. That’s journalistic laziness, Bill, and you know it.  Maybe you’re making a Straussian meta-point here, but I doubt it.

That said, the failure of the Great Society is something we must wrestle with across the political spectrum.  Why has it failed? Why do our core cities have poorer educational systems than their suburban counterparts?  Why can a school in the City of Allentown be without books or year-round music education and a school a mile away in the suburbs have access to the finest of these things in spades?  And why, when we ask that question, are we called class warriors?

With regards to the Allentown Neighborhood Improvement Zone, we’ve been considering the historic fallout of situations that arose along with the Great Society:  the flight of capital from urban cores and the subsidizing of the suburbs that came with the decision to move Earned Income Tax out of the cities in which they were earned (cities whose infrastructures make that earning possible in the first place) and into the townships where they were used to build impressive schools and new neighborhoods for cents on the dollar when factoring in environmental and social externalities.

It’s no great wonder why the Great Society failed.  In the Allentown example, it failed by the State legislature’s design. It failed because any entitlement program without robust endemic opportunity creates dependency.  This is where Newt Gingrich is right in spite of himself.  And let’s make no mistake:  I’m not proposing some great apologia for the failed policies of Lyndon Baines Johnson.  From Vietnam to Camden, New Jersey, those speak for themselves.   There are many on the right who believe that systemic dependence on the welfare state was Johnson’s goal and remains the only true goal of most liberals.

I’ll say this:  I believe LBJ was probably one of the biggest racists to have occupied the White House in modern times.  I don’t think he cared about most people, let alone people that didn’t look like him.  I believe he was cynical enough and manipulative enough to believe that his policies would ensure black fidelity to the Democratic party for the “200 years” about which he is said to have boasted.  But I do not believe the Great Society is, on its own, the key to understanding the unsolved issues of poverty in this country.  Add things like capital flight and the movement of EITs from urban cores to cow pastures, and then we’re cooking.

Who’s to blame for the origins of our often racially charged class warfare?  Whatever you believe politically, you can’t honestly think it’s the poor.  You can’t honestly think it was African Americans who were moving to then-prosperous industrial cities for a piece of the opportunity they’d been promised since Lincoln.  If you do, you might be more beholden to ideology than to generative solutions.

Speaking of ideology, isn’t it a shame that, as the media and the ideologues have it, we have but two systems from which to form our political identities?  We’re either left or we’re right.  Oh, sure, maybe some of us are soft-left and soft-right, but really, the key to figuring all of this out lies in the talking points of one of our two bogus systems.  It’s almost as if someone, somewhere is making money from all this confusion and childish division.

If you’re like me, you’re too liberal and too conservative for either camp depending on the issue.  Good for you.  Not for being like me, but for not being people who insist on dividing us with labels and political rhetoric.  Meta-narratives be damned, because the truth is in the middle, and it’s far more interesting.  The future will not come from the front of the room, nor from the busted framing fables of either broken party.

It will come from us.

Dear Wealthy School Districts: It’s Not Your Money, Anyway (A Note About Non-Property Taxes and the Earned Income Tax in Our Cities)

~ Chris Cocca ~ 4 Comments

Even if you don’t live in Allentown or the Lehigh Valley, if you’re interested in infrastructure, urban renewal, and stopping suburban sprawl (let’s call it “mall creep”), this post is for you.

As you might know, the former Philadelphia Phantoms are coming to Allentown.  The Phantoms are the top-level developmental affiliate of the Philadelphia Flyers, and their new arena is being built downtown as the centerpiece of what will ultimately be at least a $600 million dollar redevelopment project in the Queen City.   Honestly, redevelopment doesn’t begin to describe what the special tax zone (the Neighborhood Improvement Zone, NIZ for short) will mean for Allentown.  The NIZ, created by a bill in the PA legislature, does things that make relocation to the NIZ very attractive.  You can learn more about that here.

Something else the bill that created the NIZ does is return the Earned Income Tax of people who work in Allentown but don’t live there back to city to help fund the arena project. Some people don’t like that.  Some, maybe most, local municipalities are used to using EITs to help fund the suburban school districts they support.  Some people are starting to say “why should School District So and So pay for an Arena in Allentown?”

Those people miss the point.

For the last 47 years or so, Earned Income Tax in the Commonwealth has gone back to a worker’s home municipality instead of staying in the place where it was generated.  Before 1965, this wasn’t the case.  Before 1965 (read, before our core cities started failing), Earned Income Taxes stayed where they were made.  Pennsylvania legislators, keen on seeing farmland turned to suburbs, put a stop to that and the townships blossomed with stripmalls, blacktop, and sprawl.  Urban cores and urban schools were left to wither on the vine.

Now, the same school districts and municipalities that have benefited from this tax grab for close to 50 years are crying foul because EITs are going back where they belong. Heaven forbid the core cities and the near-broke school districts in them get a fair shake in 2012.

For shame, township people on the wrong side of this issue.   The Allentown School District can’t afford year-long art, music or gym classes, even at the elementary level.

Look, I know it’s easy to get used to privilege, and then to expect it.  But as Jon Geeting and others have been saying, the cost of living and doing business in the suburbs has been subsidized from the start.  This isn’t about a hypothetically free market dictating that setting up shop in low-density townships made more sense than continuing to develop walkable cities.  This is about, and always has been about, the myth of cheap suburban sprawl.  Sprawl came at a cost to our economies, our infrastructure, our environment, and our mental and physical health. It came at a cost to our cities, to be sure, and to our schools.

No one is building an urban arena with money that should be going to buy football pads for rich school districts.  No one is suggesting that we slash the budget of the Parkland High School closed-circuit television station so Spanish-speaking kids in Allentown can live in a city with a future.  Who would ever suggest something like that?

Allow me to paraphrase one person who actually might.  “Render onto Allentown what is Allentown’s.”

The Free Market Works Best When (Or Hockey, Rite Aid, Thai Proverbs and Doubting Government and Business)

~ Chris Cocca ~ 3 Comments

I’ve been thinking a lot about the free market lately.  In part, I’m wondering why Center City Allentown has one good drug store (Rite Aid), and why that one good drugstore is being displaced by the coming AHL hockey arena (I generally support the arena project), and what that drugstore is going to put up its next shingle in the suburbs, and where that leaves Center City residents no longer able to walk or take reasonable transit routes to a drugstore of any kind, and what all of that says about the degree to which markets are efficient at providing basic needs.

One might argue that the arena project would not be happening without governmental canoodling and the creation of a special tax district downtown.  Sure.  But that doesn’t explain why there’s only one viable option for prescription drugs within a reasonable distance for residents who either walk wherever they’re going (we all say we want walkable cities!) or take transit (we all say we want more people riding buses).  Some arguments will come and go from the fiscally arch-conservative side: the people downtown are poor because the government’s meddling keeps them poor.  If it weren’t for government, those people would have better jobs, cars, nicer places to live, better healthcare options and so on.

And yet, at a time when rental prices and retail space downtown are likely to be at their lowest points ever (so much vacant space, but lo, an arena project looms), I don’t see a whole hell of a lot of savvy business types flocking into even the nicest, newest spaces the city has to offer.  If ever there was a time to come in from suburbs to set up shop, surely it is now.  And yet. Indeed, the coaxing of various businesses with tax breaks and economically favorable statuses is a tweaking of the supposedly pure state of equilibrium the market is thought able to deliver.  We’re in an economic mess, say some, because of government meddling.  In the process of wars on poverty and building great societies, lots of people got screwed.  These are not of themselves outlandish hypotheses. But when some fiscal conservatives take the next step to say that government has no real, legitimate role in trying to fix the mess it has created, I get confused, Columbo style.

Government makes mess.  Government perpetuates mess. Government never should have made this mess in the first place, so now government has no role in trying to fix it.

That doesn’t sound right, does it?  The real kicker: let business do what business wants and business will save everyone.

I’m not anti-business by a long shot, but I am very anti-dogma.  Enron was a business.  All those big banks that helped bring us to the brink of ruin were businesses.  Wall Street is a business.  Yes, Congress is a business. Like government, business can do harm and business can do good.  Like government, business can be generative.  Like government, business does not deserve our total, utter, faith and trust.

Here’s when the market really can cure all that ails you:

  • Perfect information is universally available, obtained, and understood on all sides of every transaction and hypothetical transaction.
  • Every consumer or investment choice is made by perfectly rational beings with the same exact meta-goals.

So, in other words…yeah.  Sounds good on paper.

Unfettered beliefs in the efficiency and tangential goodness of markets or government aren’t tenable forever.  At the local level, we long to believe that a rising tide will lift all boats, and, to a degree, I think it will.  But I also read a Thai proverb today that gave me pause:

At high tide, the big fish eat the ants.  At low tide, ants eat the fish.

I’m not calling anyone an ant.  But isn’t this idea basically the fear behind the fear the well-horned have of the Occupy movement?  And isn’t it the fear most people caught somewhere in the disappearing middle have in general, that when push finally comes to shove, when things get REALLY bad, it won’t be push and shove but blocks on fire, looting, violence, chaos?

Even if high tides lift all boats, low tides come regardless. Will we trust the government, the market, or will we invest now in each other, in communities, in partnerships, in new ways of being neighbors?