Lexington’s revised economic development study is here: It appears that I anticipated it in 2007

After the cut and paste debacle, Angelou Economics has sent the city a revised economic development strategy report.  It sure seems that much of the meat of the study reveals the same things I did in a study as CEO of Bluegrass Tomorrow.

Some of the key points and recommendations from the Herald Leader:

A new draft of a report on Lexington’s economic development strategy emphasizes the role of the mayor and other elected officials and suggests tapping the state for a $5 million regional economic development fund.

The strategy still emphasizes regional cooperation and said economic development efforts must be “funded appropriately.”

The report suggests lobbying the state to “dedicate a portion of existing state sales or property tax revenue to create a $5 million pool for local and regional economic development.”

While I’m over the belief that competing in the global economy is actually a good thing for communities, the words I wrote as the preface to a study I did for Bluegrass Tomorrow ring even truer today – see below .  We are facing severe crisis in revenue collections. Our state constitution limits how local governments can be funded- which must be changed to reflect economic reality. And we must act regionally to be the strongest economically.

Read the whole report and see if we didn’t nail it in 2007.  Our plan was to lobby Frankfort to allow for a local option sales tax.  This tax would have been imposed in communities only by majority of citizens vote, and it would be used to either eliminate or substantially reduce local payroll taxes, which are the most regressive known.  Excess sales taxes – generated because we are a tourism destination – would then be pooled regionally to fund infrastructure and quality of life improvements.  Those improvements then would have become the springboard to a global economic presence.

There’s nothing new under the sun.  We didn’t need to spend money to hire Angelou – we already had the answers in front of us.  But I guess they didn’t come with a large price tag from an out of towner.

——-

In 2006, Bluegrass Tomorrow and numerous regional partners, undertook this groundbreaking study to better understand our regional communities and economy. Our goal was to determine how we can be more economically successful by growing jobs and tax base, while at the same time improving our quality of life.

Our research revealed some disturbing trends. Our regional communities are facing a crisis in revenue collections . This crisis could diminish the provision of effective local services and infrastructure, and could hinder our regional ability to compete for jobs in the global economy.

It is vital for our regional leaders to understand that rapid advances in communication and technology, combined with a worldwide expansion of a free-market ideology, have given goods, services, and capital unprecedented mobility—a reality known as “economic globalization.” The International Monetary Fund defines globalization as “the growing economic interdependence of countries worldwide through increasing volume and variety of crossborder transactions in goods and services, and a more free flow of international capital as well as more rapid and widespread diffusion of technology.”

Put simply, the economic world has changed almost overnight. Today economic competitiveness is not measured against neighboring cities or towns or even against other states. Rather, it is far more complex, and competition now extends on a worldwide basis. As a result, our communities are not only competing against other communities within our region and within Kentucky’s border, but also with cities and communities across the nation and the globe.

The Bluegrass Region has undeniable strengths and unique characteristics to facilitate its competition in the global arena. However, our region must overcome the challenges revealed by this study in order to sustain its economic base and expand its economic growth for the future.

Without new local and regional investments in infrastructure and quality of life amenities and without a vigorous regional effort to attract and keep high wage jobs and skilled workers, the Bluegrass Region will not succeed in the global economy.

Unfortunately at the very time the economic world has changed, our local communities are being squeezed financially by a combination of a State Constitution that forces over-reliance on a limited range of revenue producing systems and a fundamental change of the make-up of our regional economy.

The diminished revenue capacity of our local governments hurts not only their ability to provide the necessary infrastructure and services for today’s residents and businesses, but also their ability to improve local attractiveness to the global economy. Further, diminishing local revenues mean that no funds will exist that could be pooled regionally to make the fundamental improvements to our regional infrastructure, quality of life, and economic development necessary to compete effectively.

As stated above, without these improvements to make ourselves attractive to the world, our region cannot succeed in growing a high value economy. This diminishing revenue base has potentially severe consequences for our local communities.

To deal with this reality, they may be forced into making unappealing choices such as raising taxes, reducing services, limiting growth, or adopting a “growth at all costs” approach. All of these options have significant consequences to the citizens of our region.

The bottom line of this study is this: Do our communities, and our region as a whole, have the money necessary to grow a great economy? The bad news is that under current trends and policies, we do not. The good news is that there are alternatives that can help our communities grow their revenues immediately and provide regional funds necessary for improvements without forcing negative choices such as raising payroll or property taxes on communities.

Our region cannot hide from these facts. Our region cannot wish away the future, nor rely solely on hope for improvements to occur. We must be proactive. We must be dynamic.

We must be unified. And we must act soon. We can create a world-class region in which to live and do business with all the benefits that will accrue or we can accept second-rate status and resign ourselves to that fate.

The choice is ours.

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One response to “Lexington’s revised economic development study is here: It appears that I anticipated it in 2007

  1. Pingback: The true economic picture in LEX | Bluegrass reVISIONS

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