Sunday, December 28, 2008

Racing For Education In Memphis

These comments were made recently at the "Race and Education" forum sponsored by New Path and Memphis Urban League as part of their important series of honest conversations about race and Memphis:

If urban school districts like ours had a dollar every time somebody said, "Children are our future," they'd never have a funding problem.

Unfortunately for these districts, we are long on platitudes and short on support.

That said, let me begin with the obvious: children are our future.

Or more precisely, well-educated African-American students will in fact determine our future - whether Memphis is on the front of the knowledge economy wave or stuck in its back wash.

We're Different

That's because, as most of you know, we are unlike the other 50 largest metros in the U.S. because of our bulge in children under 18. Next time you wonder why Nashville has so much money for parks, libraries, and public realm, just remember that percentagewise, Nashville has 25% fewer children than we do. That's a $200 million swing in mandated public spending for our community on schools alone.

The bulge of these young people is the good news, because while the rest of America's cities are grappling with workforce problems, we have the next generation of workers already here.

The bad news is that we are in the bottom rungs in percentage of our population over 25 that is college-educated, and if you want to know if a city is going to be competitive in the knowledge economy, that's the only number you need to look at.

It's the Rosetta Stone for future competitiveness.

Power of Self-Interest

While it's tempting to define this issue in terms of lost opportunities for young people, with images of how multi-generational poverty in shameful environments remains a birthright for too many of us, let's just define it in terms of our own enlightened self-interest.

Here it is: If we can move our metro from where it is today to just the median for the largest 50 metros, it would create $3 billion in economic wealth – more money in our cash registers, more tax money for our public services, and more ticket buyers for sports and arts.

In other words, rather than chase companies and sell our city at a discount by giving away taxes to make them love us, our economic development agenda for Memphis should be one thing – getting more students to high school graduation and into the line receiving a college diplomas.

The Memphis Overlay

Of course, there's no question that things in Memphis are always complicated by emotion and reality because of the overlay of race. Just think: anytime Memphis wants to really identify a serious problem, it puts African-American on it: black neighborhood blight is worse than neighborhood blight, black crime is worse than crime, black workforce, black elected officials, and black school system.

Here's the thing: we'll be the first African-American majority metro – not city, metro – of more than one million people in history, and if we want to preordain our own failure, we will allow our institutions to treat our demographics as a problem.

Instead, in a world characterized by its diversity, why shouldn't we be able to have a competitive advantage? Why shouldn't we be able to position ourselves for federal programs and foundation funding for projects that prove that an African-American metro can succeed?

In a world where talent is the key to whether a city succeeds or fails, why shouldn't we set our goal of being the center for 25-34 year-old African-American, college-educated talent?

Getting The Focus Right

And above all, that should be the goal of our schools, because in the end, Memphis City Schools is in the talent business.

It all begins there. Although all the school districts in our metro are important, we rise or fall based on Memphis City Schools, and routinely, its students are victims of the most insidious racism of all – low expectations.

Because of race, our city is lethargic in its push to demand the best urban district in the nation, and because of race, our region essentially assumes that there will only be a handful of students in Memphis City Schools who will excel and that we can't do anything to help the tens of thousands who don't.

To explain it, we talk about the lack of a student ethic, we talk about the stigma of "acting white" by studying and doing homework, we talk about the lack of mainstream values, we talk about the lack of parental involvement, and we talk about how black families are failing to emphasize the importance of education.

That's the rhetoric.

The Facts And Just The Facts

Here's the facts.

According to the National Center for Education Statistics, 43% of African-American fourth graders do one hour of more of homework per night. 45% of white fourth graders do, and African-American students are more likely than any other group to study more than one hour a night.

Black students are twice as likely to get help from their parents on homework every day than white students, and the lower the family income, the more likely the students are to get more help from their parents. Half of the poorest students' parents work with them compared to a third of the wealthiest students.

There is no substantial difference between white and black students in whether their parents attend parent-teacher conferences or school meetings.

Three out of four African-American children are read to by their parents when they are young.

African-American 12th-graders are more likely than whites to have perfect attendance.

A poll of African-American youths 11 to 17 found that their biggest hope is to go to college, valuing academic success just as much as white students.

Now What?

There are more and more of these kinds of statistics, and the fact that I am reciting them is testament to the relationship between race and education and our ignorance about our own history. After all, the history of the U.S. tells us that African-Americans learned to read even though the law forbid it, set up their own colleges when they were prohibited from attending white schools, established "freedom schools" in Mississippi to make sure "separate but equal" did not block opportunities of their children.

What do these statistics mean to me?

They mean that unequal outcomes result from substantially unequal opportunities – especially quality teachers, quality academic programs and quality curriculum.

Self-fulfilling Prophecy

Some are the result of the hopelessness that surfaces whenever we talk about Memphis City Schools, some is the connection between poor teaching and poor student achievement, some is the lack of challenging curriculum and innovative use of technology, some is poor teachers being sent to the poorest schools, and some is teaching to the test, and some is the prejudice that African-American students need remedial classes more than accelerated classes.

In other words, it shouldn't be surprising that students perform poorly when everything about their lives tells them that they are not as smart as white kids, that their schools are not as good as other schools, that the assumption from the outset is that they will not succeed and that their own city places no value on them.

It's The Teaching, Stupid

If you remember nothing else I said tonight, remember this: a study in Tennessee found that elementary school students who are assigned to ineffective teachers for three years in a row score nearly 50 percentile points lower on achievement tests than those assigned to highly effective teachers over the same period.

That's where we start…in every classroom and with every teacher.

In the end, there are no magic answers. There is only the magic that comes from the kinds of teachers that make a difference and do more than teach. They do in fact turn lives around. Most of us in this room can point to the impact of such a teacher in our lives, and we need to make sure that the current students in Memphis City Schools do the same.

Saturday, December 27, 2008

This Week On Smart City: Best of 2008

2008 was a great year for cities until the economic crisis overtook us all. On Smart City we talked to more than 100 of the best thinkers and doers who are working to make cities great. To close out the year, we're reprising some of my favorite guests to share their wisdom on how to make 2009 a better year for cities.

From the entrepreneurial spirit of Bryant Park Corporation's Dan Biederman to Ed Glaeser's riveting historical view of cities, and from fascinating trends like Alan Ehrenhalt's demographic inversion to the green initiatives of Seattle brought to us by Mayor Greg Nickels, we've got the best of the best on this week's show.

Smart City is a syndicated, weekly hour-long public radio talk show that takes an in-depth look at urban life: the people, places, ideas and trends that affect us all. Host Carol Coletta, president and CEO of CEOs for Cities, talks with national and international public policy experts, economists, business leaders, artists, developers, planners and others on the pulse of city life for a penetrating discussion on urban issues.

Smart City is broadcast at 6 a.m. Saturday and Sundays on WKNO-FM, but it is also webcast and podcast so you can listen to it anytime you like. For the webcast, times for the broadcast in other cities and to sign up for the podcast, visit our website.

Wednesday, December 24, 2008

Starting The Journey Toward A New Memphis

Continued from yesterday.

In the past, economic development programs like Memphis 2005 – the much heralded answer to solve our structural economic problems and to revive our economy at the close of the 20th century - have received widespread support from the private and public sectors, but in the end, their real impact was limited.

The reasons included alienation of many economic development groups that were expected to accept responsibility for goals but received no money to achieve them, lack of the community-based support that was needed for the program to become implanted in the Memphis DNA and a tendency to see economic growth in terms of the old, gas-dependent economy.

There are cautionary tales from Memphis 2005 as we ramp up new plans to grow the economy. Most of all, there's the need to be realistic and to emphasize results rather than marketing, to emphasize quality of place rather than cheapness of place. Memphis often suffers from civic amnesia when it comes to the history of past economic development plans, and this time, we need to be clear-headed about potential pitfalls.

Sticking With The Facts

Some have said the current plans for economic development are different from all previous plans because "it's actually being implemented." We hope everyone will pull the Memphis 2005 file out of their filing cabinets. It too had specific objectives. It too was implemented. It too had measurements and regular reports to the community. It too had broad city government, county government and business support. It too had a highly-publicized launch and standing room only meetings to report on its progress.

It reminds us of why it's important to evaluate our economic development plans in light of MIT's Sean Safford's instructive report, "Why The Garden Club Couldn't Save Youngstown: Civil Infrastructure and Mobilization in Economic Crises." In his research, Mr. Safford compared two historically and economically similar cities in the Rust Belt – Youngstown, Ohio, and Allentown, Pennsylvania – and reached conclusions that he shared on Smart City about why Allentown succeeded and Youngstown failed.

"Youngstown has suffered from an inability to develop a coherent approach to attracting inward investment, a lack of entrepreneurship and the inability of major local employers to transform in ways that benefit the community," he wrote, citing causes that deal with social network density, social capital, elitism and duplication.

Learning From Others

The reason that social organizations couldn't save Youngstown, in Mr. Safford's opinion, was that the civic organizations "rather than being forums of interaction, then, these were simply places were social status was affirmed. In the end, this may have done more harm than good by strengthening the ability of a small group of actors to assert narrow interests over those of the community more broadly. Moreover, these ties ultimately proved extremely brittle leaving the community without strong leadership when it was absolutely necessary to have it."

The lessons of Youngstown are important for Memphis. Despite our Southern status, our city has a gritty city edge to it, complete with gritty kinds of problems more in common with industrial cities like Youngstown. That's why the Youngstown connection is so intriguing to us, and what we can learn from it.

As for lessons from our own past, they are especially useful right now as well.

Lessons From 2005

So what are they?

• The ultimate outcome of the plan is new thinking, not just new money for economic development budgets and new marketing.

• Success requires sustained leadership and attention that transcends the initial push.

• It's about leadership – engaged, committed and inventive – who are able to think of the future as more than just an extension of the present.

• It's about collaboration between key Memphis organizations, not just top-down direction without meaningful input along the way.

• It's about spreading the wealth; if the help of organizations are needed, they need the money to make it happen.

• It's about increasing the capacity of existing organizations rather than creating a bevy of new task forces, committees and groups.

• It's about average Memphians hearing a narrative that they can imagine themselves being a part of.

• It's about one over-arching vision that encompasses all strategies into a cohesive, easy-to-understand, aspirational story.

• It's about focusing on key levers of the greatest change – such as increasing the number of college graduates in our workforce.

• It's about measuring success by our ability to leap frog ahead of the competition, not just by improving our economic performance.

• It's about calling a spade a spade by ignoring the spin and calling the Memphis economy what it is – in crisis.

Boiling Water

In the end, it's about creating a city where people, especially middle-income families and college-educated professionals, come to work and live. It's about realizing that selling Memphis for its cheapness is in the end a prescription for short-term success and long-term failure. The cities that are succeeding and prospering in the new economy are those who are selling quality, and yes, they have taxes higher than ours.

Two years ago, we wrote: "Sometimes in Memphis, it's as if we're the city equivalent of the frog sitting in the pot on the stove as the water gets warmer and warmer until it's boiled to death." That's why many national urban commentators have already given us up for dead, ascribing to us the fate that awaits any city seen as dysfunctional and out of control.

But things are changing. There is widespread understanding in Memphis that the water is indeed boiling. And that is indeed progress.

Now, we need to take the kind of actions that are bold enough to not only turn around our economy and get us out of the bottom rungs of economic performance but spring board us ahead of our competitive rivals. It will be hard and it will take time. But we have the grassroots strength, the emerging creativity in some unlikely places and a singular determination to make it happen. Most of all, we have a history of innovation and entrepreneurship whose spirit we should tap into as we move ahead.

Other cities have shown that it can be done. And if other cities have been able to do the same, why should we say that we can't?

Tuesday, December 23, 2008

Memphis Must Leap Frog Into The Future

The Memphis economy has reached the moment of truth.

Languishing in the lower rungs of the economic indicators that matter, we have reached the point where we either snap out of it or we sink into the abyss with Detroit and Cleveland.

It's that serious, and the choices are that stark. In the family of cities today, the rich get richer and the poor get poorer. It doesn't take a Harvard University economist to point out which group we are in.

Leaping Ahead

Today, cities that are successful are becoming ever more so, gaining momentum, attracting talent and gaining knowledge economy jobs. Likewise, cities that are floundering are failing behind at a quickened pace, lacking the kind of leadership that can pull them out of the downward spiral, reject their reliance on low-wage, low-skill jobs and adopt strategies that have the potential to shake off the civic lethargy and to set them on a dramatic course for the future.

It's not going to be easy for the cities that are floundering. In other words, it's not going to be easy for Memphis.

We have no margin for error, and we have to start doing things right. Really right. Right now.

To have any chance at all, cities like ours need leap frog strategies that catapult them ahead of rival cities. In Memphis' case, it would take a major leap forward just to get to the median in most economic indicators, but that would be a start.

Seeing A New Future

Mary Jo Waits – a guest on Smart City and someone who pioneered these kinds of strategies for Phoenix and State of Arizona – explained the leapfrog approach this way:

"The principles are straightforward, whether for companies or communities. It's a one-two punch: Spot opportunity and respond faster and better than anyone else. Remember when Steve Jobs and Apple challenged IBM? They didn't do it by catching up, by building a better mainframe.

"They did it by seeing a different future, betting on the personal computer and leapfrogging over IBM. It works for regions, too. Austin and San Diego leapfrogged over most U.S. metropolitan areas by capturing more talent, research funds and science- and technology-oriented jobs in a relatively short period, less than a decade.

Take Your Best Shot

"Not entirely. Mostly, leapfroggers pick their shots. Sometimes, the best shot is to play at the edges, aiming to set the pace of innovation. And sometimes, in this economic whirlwind, the best shot is to follow the 'first mover.' Appropriating an idea that is already working in the world can produce the quickest results.

"Ray Kroc didn't invent McDonald's; he took the idea from brothers Dick and Maurice McDonald when he bought their small chain of burger joints. And Home Depot founders Arthur Blank and Bernie Marcus didn't invent the first warehouse-outlet hardware chain. They got the 'big box' concept from their earlier employer, Handy Dan Home Improvement.

"But copying a good idea is not enough. You have to make the idea your own, grafting it onto your situation. And you have to improve on it so that your competitive position takes a big leap forward, as do the benefits it offers. Leapfrog players pursue with single-minded focus big jumps in performance."

Improving ED

That in a nutshell is the challenge facing MemphisED, the economic growth part of Memphis Fast Forward, and all the rest of us.

We'll know we're on the right track when we quit talking about distribution as the Holy Grail and start talking about entrepreneurship and innovation. We'll know we're succeeding when we quit giving away tax freezes for marginal industries that do nothing to improve job opportunities or job skills for our workers. We'll know we're on the right track when we yank down all the "America's Distribution Center" signs that remind every visitor that we have set such low expectations for ourselves.

As a result, there's no time like the present to dream big dreams. Pursuing the same old industry anchors is risky if the ultimate aim is to transform Memphis into a strong competitive position for today's talented workers – whose presence in turn attracts new jobs.

In fact, if you want to predict our success in the future, throw away all the statistics and graphs. There's only one indicator that we really need to watch – the percentage of Memphians who have college degrees. There's no more accurate proxy for future success than this.

Flunking Out

Unfortunately, Memphis is near the bottom of the top 50 U.S. cities in the percentage of college graduates and near the bottom in the percentage of young people in college. In other words, we can sift through dozens and dozens of strategies, but at the end of it all, every one of our programs need to aim at doing one thing – increasing the percentage of college-educated workers in Memphis. Absent a change in those numbers, Memphis' future is sealed.

Meanwhile, some people in local government believe that MemphisED aims too low in the number of new jobs it hopes to create in five years – 50,000. For one thing, that number is essentially what Memphis' economy was generating 15 years ago, so it has a certain "back to the future" feel to it. Secondly, it's not about the number of jobs but where the jobs are being created, because the success of our economic growth plans will be judged fundamentally on creation of jobs in sectors that pay higher wages and elevate our city to compete in the new economy.

Most of all, we need to become a city where people choose to live and work. That's the toughest challenge of all, because it requires a wholesale shift in our mindset about who we are and who we can become. But in the end, that's the task ahead, because if we don't accept it now, we have preordained Memphis' future as a failing city.

Tomorrow's Post: Learning From the Past

Sunday, December 21, 2008

A New Year's Resolution For A New Memphis

Memphis is in trouble.

There is no doubt that if the future is merely an extension of the present, our city is destined to fall off the economic cliff.

Too many trends are running against us. The middle-class has abandoned Memphis. We are not attracting or retaining college-educated 25-34 year-olds. We are doing nothing to strike at the causes of poverty (which is increasing) while its symptoms consume our public budgets. Our economic development strategies remain driven by real estate interests, and the public investment in sprawl results in strained city services stretched over an area bigger than New York City’s 305 square miles.

Wrong Directions

We continue to chase an old economy built on tax breaks, cheap land and cheap labor while future success in the new economy is built on quality workers, quality communities and quality investments that create a vibrant city. Our crime rate paints a national picture of a city that’s out of control and inspires the prejudicial predictions of urban commentators who are virtually united in their forecasts of spiraling failure for us.

Our 15 years of hemorrhaging wealth from our metro continues and the imbalance now totals several billion dollars that has left our region altogether. Unlike most metros in the U.S., Memphis is not ringed by well-educated, high-income counties, and instead, traveling outside Shelby County takes us to lower incomes and lower educational attainment.

And that’s just the high points of our crisis. Underneath these troubling statistics is the reality of an economy that is struggling and in the face of fundamentally restructuring in the economy returns to the same old economic development theories that created the current economy’s lack of competitiveness in the first place.

The News

We have been writing about these concerns since the first month that we began this blog in spring, 2005, and unfortunately, our concerns have been fully realized. That’s the bad news.

The good news is that there is growing recognition of the seriousness of the current challenges. As a result, more and more people are talking about new ideas to deal with poverty, talent and sustainability. There is no question that in the future, we will need the energies and help of every Memphians if we are to change our future.

After all, other cities have proven that no city’s destiny is preordained. More to the point, the lessons of successful cities are that citizen activism, disruptive innovations, a new sense of urgency and bold public leadership can transform just about anything.

New Year’s Resolution

If in 2009, we are to set New Year’s resolutions for ourselves, let it be that all of us will play a role in turning our city around, in finding new solutions and committing to a renewed determination to make Memphis a place that is known for being green, safe, clean, vibrant and tolerant – the qualities that must be present for success in this economy.

As we look ahead to what must be our most transcendent era of rebirth, we will concentrate on our blog between now and the new year on economic growth issues. We hope you will join in the discussion.

At the root of our problems, Memphis manages somehow to hold two countervailing attitudes. On one hand, a lack of self-worth leads to a tendency to accept any big idea that rides into town claiming to be the magic answer to turning things around. On the other hand, there’s the widespread notion that our seriously deficient economic indicators are largely caused by image problems.

Both seem to stem from the same place – a civic propensity to grasp at simplistic answers to complex questions.

The Best Policy

Let’s all be brutally honest. Memphis has a reality problem. Not a marketing problem. Not a branding problem. Not a self-image problem.

Yes, we all know about Memphis’ pervasive negative self-image, and we all agree that we need to be more positive and more upbeat about this endlessly fascinating, funky place. But as we do too often, we use our self-image problems as an excuse to stall action and to tackle the toughest problems before us. Other favorite time wasters here are suggestions that we can’t do anything to change things because we have two local governments, we are too poor, we are spread over three states.

Here’s the thing. Most cities have self-image problems, but what makes the successful ones different is that they don’t get bogged down in justifications for non-action. Instead, they are honest about the facts facing their cities, and they are willing to do the hard work of place-making and city-building.

Change Happens

Remember when Chicago was called “Beirut on the Lake,” and today, it’s been praised as one of the world’s great cities by countless publications.

Portland had no reason to become one of the country’s premier cities. In the Sixties, it was called a dump. It had little going for it. It didn’t have any natural assets. It didn’t have any Fortune 500 companies. It didn’t have a great university. Today, it’s on every one’s list of most successful cities.

And, don’t even get us started on Nashville.

In other words, the future does not have to be merely an extension of the present. There are ways that cities have developed strategies that allowed them to leap frog over the competition and move from a regional city to a national and international city.

Turning Around

They all had image problems, and it was in transforming their realities that they transformed their self-image. No, we’re not saying that we shouldn’t be paying attention to creating a more positive vibe about Memphis – and that it necessarily will have to begin inside Memphis.

However, in countless meetings in Memphis, when it comes time to get to the hard, gritty work of turning around our city, people instead talk about how we just need to turn around our image. Even The Commercial Appeal opined on how poorly Memphis is doing in attracting foreign-born people and ended up suggesting that we need to improve our image. “It seems a big part of the equation boils down to image,” it said. “Many of us who live in the Memphis metro area share the responsibility for that…We also need advocates who are willing to step into the spotlight and tell the rest of the world how good Memphis is – and how great it can become.”

Nothing But The Truth

The truth is that tomorrow, we can become the masters of happy talk, the nation’s biggest civic braggarts or the world’s most positive thinkers, but that would do nothing to change the fact that our population growth is essentially the number of births over deaths, our lagging educational attainment is a drag on economic growth that is deadly, our failure to attract young professional talent is crippling and the people who have driven economic growth in cities for the past decade – foreign-born immigrants – are scarce here.

More to the point, we are on average in the bottom of the 50 largest U.S. metros in all these categories, and we really need to be doing better in all of these areas if we are to have a chance to drive economic success in today’s knowledge-based economy.

First and foremost is doing something about young and foreign-born talent. They are largely moving to cities where they find more people like themselves. We are in the bottom five of the largest 50 metros in foreign-born residents. We are in the bottom six in the percentage of 18-24 year-olds in college and the pace of their exodus is quickening. We are in the bottom two in the percentage of people who have traveled outside the U.S. We are in the bottom two in innovation capacity. We are in the bottom eight in high-tech jobs. We are in the bottom four in degrees granted in science and engineering. We are in the bottom two in venture capital as a share of the gross metropolitan product.

Finally, of the largest 100 cities, we are in the bottom three in the percentage of middle-income neighborhoods. Of the top 50 metros, we are dead last in economic integration.

Bottoming Out

All in all, it paints the portrait of an insular metro at a time when young workers are looking for welcoming cities known for their vibrancy, their tolerance, their knowledge-based jobs and a thick labor market for skilled jobs. Most of all, it paints the portrait of a metro that has never had more compelling reasons to act boldly if it is to get out of the bottom rungs of successful cities.

A few months ago, a new bizjournals study said it well: “Youthful spirit and economic vitality go hand in hand. Communities with large concentrations of young adults are more likely to prosper.”

The five top places for job opportunities for young adults were Raleigh, Austin, Washington, Las Vegas, and Phoenix, followed by Salt Lake City, Charlotte, Seattle, Orlando and Houston. At the bottom of the list of 67 cities, the report said the least desirable places for young adults were Memphis, Grand Rapids, Dayton, Cleveland, Detroit and New Orleans.

Danger Ahead

It’s just the latest warning shot for our city, but while we at least have put talent attraction on our economic growth agenda, we still have not put together the comprehensive strategy and the concentrated civic muscle to put it at the top of an agenda anchored in innovation, research, entrepreneurship and a culture of creativity.

In this regard, the ultimate challenge is to do more than to identify a batch of big projects but to develop strategies that imbed creativity and vibrancy into the culture itself rather than treating them like something that results from multi-million dollar buildings and projects.

Innovation is largely about change and culture. Already, we’ve seen that the old adage that trends start on the coasts is being upended by a new digital world where they can begin anywhere. Most important is the fact that these days, we know what works – strong regional assets and knowledge-based networks that include research universities, cultures that encourage risk-taking, incubators, civic appreciation of diversity and informal connections between people engaged in creativity on the edges of our economy.

It’s a long, hard journey to a more successful future, but it begins with all of us telling the truth about the cold, hard facts about the challenges in front of us. That’s something we can all be positive about.

Friday, December 19, 2008

LocalEx - “Growing” The Memphis Local Food Economy

This guest post is by Aaron Shafer, research scientist and the creator of Skatelife Memphis, and an always entrepreneurial thinker about Memphis:

Smart City has long been advocating that a successful city builds on its existing assets and strengths.

Fred Smith, our local founder for FedEx, recognized the geographic placement of Memphis as a potential strategic advantage for building a national distribution powerhouse. So as Memphis looks to compete in the global market, perhaps it need not look any further then its own corporate backyard and our stomachs.

FedEx has invested millions into its logistics system for package distribution. Mr. Smith is also heavily vested in seeing the Memphis economy thrive. In addition, we can largely thank the Hydes and the Smiths for the monumental efforts toward making Memphis a biotechnology hub for the 21st century. Let's hope their half a billion dollar effort succeeds.

The gaping leak

The food business, similar to many other business sectors, has undergone a massive consolidation, according to the World Watch institute, the "go-to" scientific resource center that provides fact-based analysis of critical global issues. If you are concerned about what you eat, take to the time to comb over this website.

Essentially, three major conglomerates (ConAgra/Dupont, Cargill/Monsanto and Novartis/ADM) dominate every link in the North American food chain (and increasingly the global food chain). And what we mean by dominating the food chain is from selling the seed all the way to owning name brands in the grocery store.

In return for this massive consolidation, the consumer benefits with low-cost food products.

Wake-up Call

However, consumers are slowly waking up to the hidden costs that aren't factored into this industrial approach to agriculture. What's the evidence of this collective awakening of our food consciences? Farmers' Markets: starting with a few hundred in the 1970's, the number has risen to 4,385 registered markets as of September, 2008.

So what are these hidden costs that you won't find on the balance sheets of these companies? There are entire books, such as the Omnivores' Dilemma by Michael Pollan or Deep Economy: The wealth of Communities by Bill McKibbeen, that are devoted to discussing these hidden costs, but briefly, the costs can be grouped into three categories: the health of consumers, job loss and the effects on the environment (land and animals).

Let's just consider the job loss component.

Bottom Line

The bottom line is that farmers used to reap the fruits of their labors. In 1910, for every retail dollar spent on food, a farmer received 40 cents. At present, his share of that dollar is now 7 cents. Probably one of the best sites on the Internet to investigate these numbers is So how does a small farmer survive against a very fast, efficient and cheap agribusiness? Not very well, but a change and hope are in the air.

Thanks to the Internet, consumers are learning more about their food origins, and it's this awareness that's allowing our farmers' markets to flourish and grow. Yet the farmers' market is still a niche and privilege for those who can afford it.

For example, a 2006 economic study of the West North Carolina region showed that food sold directly from the farmer to consumer accounted for only 0.6% of all food products sold. This study is of particular interest to Shelby County because the populations are nearly identical. Citizens in this study spent $2.1 billion in food each year and yet $1.5 billion was spent on food coming from outside of the region and state.

Think About It

Take a second and think about that. That's 1.5 billion dollars that could be recaptured by rebuilding a local food economy. And don't forget the local multiplier effect. For every dollar spent locally, $2.5 more is generated through its local recirculation into other local stores. So now you are looking at a $3.75 billion re-infusion of money into the local economy!

Basically, this is a gaping void waiting to be filled by a cooperative effort between the consumer (you, schools, hospitals) and the producer (farmers urban gardeners, school farm projects). Jack Kloppenburg, a sociologist at the University of Wisconsin, says it best "there needs to be a distributor somewhere in size between Sysco and the CSA's (consumer supported agriculture)."

The World Wide Watch report states: "This daunting void 'between Sysco and CSAs' may hold the greatest money-making opportunity for communities, allowing larger farms and food companies to tap into the interest in local foods and making it possible for a broader range of consumers to buy local foods."

Our Competitive Advantage

Memphis has a logistics advantage. We can be the first city to show the rest of the U.S how to efficiently distribute locally-grown food from many small farms and even backyard plots to local consumers and businesses. This is the biggest barrier right now for local growers.

Local growers have no voice in the world of distribution and food production. It's the massive distribution systems that have stripped returns away from small farmers. With the formation of a non-profit distributor that reinvests its service fees into interests of the farmers and local businesses, we can be a community that recaptures our local agricultural based economy.

Awhile ago, we spoke here about Memphis branding itself. This could be our brand - the first city to incorporate the little guy and to rebuild a new oil-independent food economy. In fact the brand is already ours, check out the Shelby County seal.

It says "Agriculture: Commerce." Perhaps that seal is not such a relic after all.

Are we ready for LocalEx? I am ready, let's do it!


Thursday, December 18, 2008

This Week On Smart City: The History Of Food And The Future Of Education

We're going bi-coastal on the show today with stories about education and eating. First from New York: What would it take to change the lives of poor children? Not one by one, but in big numbers, and in a big way. That's the question that led Geoffrey Canada to create the Harlem Children's Zone, a place to test new and controversial ideas about poverty and education. We'll speak with author and journalist Paul Tough about his experience writing his book about the Harlem Children's Zone, and the future of this innovative experiment.

Plus we'll have a special presentation from our friends at Next American City. As part of their Urban Nexus series, they've brought in Mark Vallianatos of the Urban and Environmental Policy Institute to tell us about the transformation of Los Angeles from an agricultural hub to a sprawling metropolis, and how it might regain it's agrarian heritage.

Smart City is a syndicated, weekly hour-long public radio talk show that takes an in-depth look at urban life: the people, places, ideas and trends that affect us all. Host Carol Coletta, president and CEO of CEOs for Cities, talks with national and international public policy experts, economists, business leaders, artists, developers, planners and others on the pulse of city life for a penetrating discussion on urban issues.

Smart City
is broadcast at 6 a.m. Saturday and Sundays on WKNO-FM, but it is also webcast and podcast so you can listen to it anytime you like. For the webcast, times for the broadcast in other cities and to sign up for the podcast, visit our website.

Tuesday, December 16, 2008

It's No Time To Thaw Out Bad Tax Freeze Policies

The Greater Memphis Chamber – whose renaming apparently takes off some of the pressure to lead regionalism by removing “Regional” from its name – celebrated all that is right about Memphis last week, featuring some of our city’s most recognizable celebrities and boosters.

The goal was to create a new current of optimism in and confidence about Memphis – a spirit often sorely wounded by brutal statistical indicators of our uncompetitiveness – and it was a reminder of what a mythic heritage there is here and what a special place it is. Still.

Most of all, it was a reminder of how the intangibles in Memphis are often more powerful than the tangibles. Of course, the problem is that it’s hard to sell intangibles in the cut-throat world that is modern economic development.

This and That

While we don’t have an imposing skyline, we have the authenticity of Cooper-Young and South Main.

While we don’t have the kind of vibrant downtown that other cities boost, we do have a growing café society and an ever impressive neighborhood-based activism that can transform our city much as it did in Portland over the past four decades.

While we don’t have booming reinvestment like many cities, we do have great bones with the historic buildings that still remain standing here, waiting for the day for economic revival.

But more to the point, Memphis is about the indescribable, palpable feeling in the air, an attitude, a bit of a chip on the shoulder, a funky feeling, a rhythm that stems from our legendary music and our legendary river. There’s also an underpinning of personal warmth and generosity that’s embedded in our culture.

Then, there’s the “plug and play” openness that allows almost anyone with a passion to find a place to pursue it and to be invited into an organization working on the problem.

Logo Progress

A new logo was also unveiled, and it’s a welcome new image for our city – solid, imaginative, adaptable and a platform for creative messaging. It’s a three-dimensional “M” that’s malleable, becoming a putting green, a river, a road, an airport and more. Best of all, it should send to the dustbin once and for all the “swoosh” that was already a cliché when the Chamber added it to its name years ago.

Then, even better, the new logo has no cutesy tagline or bumper sticker slogan. The “M” says it all. It stands for it all. It’s a solid, clever, new symbol for Memphis.

It’s because of the celebration spotlighting all that is right and special about Memphis that it’s makes it even stranger that economic development types and businessmen are working well below the radar to change some of the rules that were enacted little more than 18 months ago to improve a PILOT (payment-lieu-of-taxes) program that waived taxes almost indiscriminately.

Out Of Control

The tax freeze program was so out of control that it was criticized by everyone from pro-business Forbes magazine to researchers, and most of all by city and county governments’ own consultants, URS Corporation and NexGen Advisors, who called for major overhaul of the program in its 97-page report issued December 1, 2005. Even then, it took more than a year for local government to get around to reforming the PILOT program, which has always been more about real estate than economic development.

But, most importantly, the tax freeze program lost public support and credibility because of the Memphis and Shelby County Industrial Development Board’s pro forma approval of any application whose paperwork was filled out correctly. But most damning of all, in a 10-year period, for every tax freeze approved in Nashville, Memphis approved 83 totaling about $60 million, a total that was more than the other major cities combined.

Decades ago, Nashville decided to send a message about quality government, quality of life, and quality of public investments. It set out to execute “quality strategies” that make it a magnet for young college-educated workers and skilled jobs. It identified key public investments to make this happen. It rejected the notion that a city should sell itself at a discount to get jobs and people to move there.

The Road Too Traveled

Memphis, meanwhile, took another road. It was rooted in “old school” economic development programs so our city was sold on the basis of cheap land, cheap labor and cheap taxes. Ultimately, what we’ve learned is that throwing money at companies to convince them to love us is not only poor public policy, it is also counterproductive, stimulating higher tax rates that choke off the small businesses and the entrepreneurs who create most of the new jobs in the first place.

Three years ago, we had several warning signs that we were on the wrong path. Two George Mason University professors studied the IDB program and concluded that it was characterized by fatal flaws, such as erroneous calculations, fallacious assumptions and errors in fact.

If that wasn’t warning enough, Forbes magazine held up the local PILOT program as the poster child for tax incentives gone amok: “Targeted tax cuts aimed at attracting particular employers are bad policy. For decades now targeted tax incentives have been a favorite elixir of state and local politicians in depressed communities. But targeted tax incentives don’t spur real growth. Quite the contrary…tax incentives are inevitably financed at the expense of established businesses. Today’s winner of a targeted tax break is tomorrow’s victim of a broad increase in business taxes.”

And You’re Out

The third strike for the program was the thoughtful report by the city-county consultant. One of those recommendations – the so-called “but for” test - was for companies asking for tax freezes to prove that they need the public investment (and that’s what it is) to make their projects work.

Here’s the thing: We don’t quibble with some of the “housekeeping” kinds of changes that are being proposed by the business community, especially the requirement that 75% of a company’s employees must live in Shelby County. It’s largely unenforceable, and as we wrote about police residency requirements, the trick is in creating a city where people choose to live. Force is never a successful public policy.

That said, there is rumbling that some business leaders want to water down the “but for” test. If they do in the end ask for such a change only 18 months after it was implemented, it should be turned down summarily.

What He Said

It seems timely to revisit what the consultants wrote in their report: “The current matrix approach (the score sheet now being used to award tax freezes and set their terms) for awarding PILOTs should be abandoned and replaced by a ‘but for’ test or the true economic need of the project.”

This was what was always missing from the PILOT process. Instead of an emphasis on facts, there was an emphasis on rhetoric: “This company will move to Mississippi if it doesn’t get the PILOT,” “This company is looking at locations in Indianapolis right now,” or “This company wants a sign from government that Memphis values its presence.”

In truth, this “but for” test is straightforward and good stewardship of scarcer and scarcer tax dollars. The consultants define “but for” as a private investment that isn’t reasonably expected without the public tax freezes, and it can be proven by a “gap analysis, a competitive cost analysis for competing sites, or a combination of the two,” the report states.

But For…

“The establishment of a ‘but for’ test is the whole premise of any public investment or the need for it from a logical, moral and legislative standpoint,” the report said. “Most, if not all, business incentive programs across the country imply a ‘but for’ test in their intent and enabling legislation.”

Previously, we’ve expressed our concern about the pervasive feeling of unworthiness that is found in Memphis, and which is mirrored in public policy like the PILOT program. It embodies the attitude that we aren’t worthy to have new business and business expansions without bribing them. Is it at all possible that unlike the other cities who ask for justification or sell their cities on quality rather than cheapness, we come off looking desperate and less professional, and a result, we give more than necessary?

We think David Birch, former Harvard and MIT academician and now president of a company that advises companies on where to locate, said it best: "The cities growing fastest right now have the highest taxes, most expensive workers, most expensive land...To say you want the cheapest worker is an old way of thinking. What you really want is a talented labor force, not the least expensive labor force." Birch says the days are over when companies selected locations for new factories or offices on the basis of where business costs are cheapest.”

Focusing On The Right Thing

Or as Professor John Eger puts it: "The effort to create a 21st century city is not so much about technology as it is about jobs, dollars and quality of life. In short, it is about organizing one's community to reinvent itself for the new, knowledge-based economy and society; preparing its citizens to take ownership of their community; and educating the next generation of leaders and workers to meet these global challenges...At the heart of this effort is ultimately defining a 'creative community.'"

In the end, it seems logical that the overriding question about tax freeze policies is whether they are encouraging the reinvention of Memphis into a creative community, a city of choice, known for its quality and innovation. The answer seems obvious, and so then is the rationale for refusing to roll back changes that came from the PILOT reforms.

As county government considers what it's going to do, we recommend that officials listen to the Smart City interview with Greg LeRoy, author of The Great American Jobs Scam: Corporate Tax Dodging and the Myth of Job Creation. He said: “There’s a popular myth that’s promulgated by companies and their consultants and their public relations machines suggesting that tax breaks are responsible for companies locating or relocating or expanding. I think that’s just not true because all state and local taxes combined has a cost of doing business for the average company in this country of less than one percent of their cost structure.

Everybody’s Wrong But Us

“Tax breaks, therefore, comprising some fraction of less than one percent of a company’s costs can’t create markets, can’t drive innovation, can’t drive skilled labor. It’s really become a way for elected officials to take credit for things that are already going to happen in the market. And by letting these programs become so loose and allowing them to become pro-sprawl, we’ve also allowed these incentive programs to turn into things that are really harming our land use, undermining our public schools, forcing people away from transit…”

Mr. LeRoy suggests that programs like ours are in truth real estate development masquerading as economic development. “We hope elected officials look at the broader policy issues about how policies affect everybody paying taxes to the city, to the county, to the state, and what’s really going on is a burden shift in which companies that are foot loose, or threaten to be foot loose, are getting lots of other people to pay for their public services, because when a company doesn’t pay its fair share of the cost of public services it uses, everybody else either has to pay higher taxes or get lousier public services.”

Amen. And we pray that no one thinks now is the time to return to policies that were key to creating the low-wage, low-skill economy on which we are too dependent.

Sunday, December 14, 2008

Nothing Healthy About Memphians' Tax Burden

Memphis City Councilman Bill Morrison is right.

He has proposed for Memphis City Council to end city government’s funding of the Health Department.

The logic is similar to the courageous – and completely logical – cut of $66 million in school funding: Shelby County Government, according to state law, is mandated to provide health services, and Memphis taxpayers are paying twice for them – once as county taxpayers and again as city taxpayers.

It’s an untenable, not to mention completely inequitable and regressive, tax policy, and Councilman Morrison, who led the fight to end the double taxation for public education, finds himself once again leading a cause of significance to every Memphis taxpayer.

Communicate, Not Litigate

That’s not to say that Shelby County CAO Jim Huntzicker isn’t also correct when he says that city and county governments should meet to discuss these funding issues. That is of course preferable, and based on what we are hearing from City Hall, there’s really no aversion to doing that; however, it will not derail the present consideration of ending the Health Department funding unless Shelby County Government demonstrates convincingly that these talks are imminent.

Meanwhile, Bartlett Mayor Keith McDonald engages in magical thinking in trying to defend the status quo, which for decades has resulted in Shelby County Government directly subsidizing services within the small town borders as part of their preferential treatment. Mayor McDonald says that Memphis entered into an agreement to pay more for health services because they use most of the services.

There’s nothing to indicate that he’s right, and anyway, we thought he abhorred consolidation in principle. When the city and county health departments were officially merged September 1, 1950, it followed the consolidation of several functions – vital records in 1934, venereal diseases in 1939 and tuberculosis in 1941.
Times Change

It was a totally different time. Shelby County Government was a rural government of good old boys who provided services to Memphis grudgingly, if at all, and even then, Memphis had to scratch and claw for whatever it got. It’s this fact that is behind city funding for several services typically the sole province of county governments.

We are now light years from the county government that was so rurally dominated that it was ground zero for the landmark U.S. Supreme Court's "one man one vote" ruling in Baker vs. Carr that changed reapportionment not only for Shelby County, but for every legislative body in the entire country. Until then, although the majority of Shelby County's population had always lived inside Memphis, the majority of the county's legislative body members was from outside Memphis.

In fact, every county town – including the hamlets Germantown and Collierville and four-way stops like Arlington – had their own County Court Squires (now the county board of commissioners), so decisions were all about what to do for the people outside of Memphis. Meanwhile, the Chairman of the County Court was also in charge of large parts of the administrative functions, and the long-time occupant of that post was the legendary, powerful Charles Baker of Millington, whose name is attached to the landmark Supreme Court ruling.

Small Town Logic

In other words, Memphis got short shrift in services and funding, and because of it, city government layered on funding to get services that the other towns got without any funding at all from their local governments, prompting city government to jump into the breach and tax for schools and other services although it was ultimately the responsibility of county government.

Over the years, the predecessors to the present cadre of town mayors have pushed back anytime anyone in Shelby County Government tried to even out the financial scales. To his credit, after 30 years of limited efforts to create more fairness, Mayor AC Wharton has made strides in ending some county subsidies that had existed for decades for things from roads to libraries.

As part of this tug of war, the county mayors have created their own justifications for the double taxation of Memphians. Mayor McDonald – ironically someone who talks a good game of “we’re all in this together” – rolled out his explanation: Memphians pay twice for health services because these funding arrangements were made years ago on the basis of who uses the services.

He’s wrong. There has never been a test for funding that addressed the sources of users. And last time we checked Bartlett used schools funded only through county taxes (with about 60% from Memphians).

Two Wrongs Don’t Make A Right

To add to his error, he said that Bartlett residents pay county taxes for certain things, including the county jail, in which Memphis usage is high but its funding is minimal. Actually, Memphis has no jail, because it helped to fund the Justice Center (unlike the towns, by the way) and the jail was part of the quid pro for the help.

As for his fundamental point, he’s right and he’s wrong. Yes, the vast majority of people in the Shelby County Jail are Memphians, but no, Bartlett taxpayers shouldn’t be freed from paying taxes for it. That’s the concept of democracy, and despite the demagoguery of the recent presidential election, our entire government is built on the basis of redistributed taxes from one area to another to pay for services that are needed for the overall health of the area. But come to think of it, most Memphians aren’t using the roads and schools that they were forced to fund as county government became the willing vehicle for more and more unsustainable sprawl (which costs about $100 million a year in bond payments).

We’ve said it until you’re tired of hearing it from us, but Memphians should only be paying for services that are comparable to services in the county towns. All other services should be regional, or countywide, and they should be supported by the larger tax base.

A Level Playing Field

In other words, Memphians should be paying primarily for fire, police, sanitation, parks and libraries. Everything else should be immediately moved to the county tax base, especially regional amenities like museums that should be backed with the broader tax base, and Memphis Area Transit Authority, which is running buses to the towns although citizens of Memphis are footing the bill. These are regional services and should be treated and funded as such.

If we had the power, we would also move to the countywide tax base all libraries and all parks. We deserve to have a coordinated, interconnected system that delivers services seamlessly and without regard to the imaginary government borders that we put so much stock into.

Clearly, Shelby County Government saw this funding issue coming. Mr. Huntzicker asked for a legal opinion about it from the Shelby County Attorney’s office a few months ago, and on October 13, 2008, he received the standard “the county is right and the city is wrong” legal opinion. Before this debate ratchets up much more, we are certain that we’ll have a City Attorney’s opinion saying just the opposite.

Opinions: Everybody’s Got One

Mr. Huntzicker asked the attorney’s office to answer this question: “Whether the City of Memphis could reduce or terminate funding to the Memphis and Shelby County and what consequence would result?” Of course, no one in City Hall is swayed by what county government says about city rights and responsibilities, but the answer from the county attorney’s office was: “City of Memphis remains a financial partner of the Memphis and Shelby County Health Department.” The opinion acknowledged that by law, Shelby County is “required to maintain and support a county health department,” but adds that the “City of Memphis is responsible for a proportionate share of the costs of operations, maintenance, and financing of the Memphis and Shelby County Health Department.”

Not mentioned in the opinion is that the conclusion flies in the face of three decades of county policy built on the principle that county government is required to provide health services and that city government could end its funding any time it had the political will to do so. In fact, it was 10 years ago that the former director of the health department wrote a memo reiterating the long-held belief. He said county government is ultimately responsible for the health department, not the city, and that the city could end its funding with six months notice.

In fact, when city and county governments sat down at the table to consider a new alignment of public services in the wake of the “tiny town” controversy, both sides agreed at the beginning of the meeting that Shelby County Government was responsible for health funding, not city government. For that reason, it was assumed as a given that health department funding should move totally to the county’s side of the

Courting Disaster

Perhaps, this issue is headed for court, where it can join the tin-eared lawsuit filed by Memphis City Schools against City Council for cutting its funding. Some, including the editorial page of our daily newspaper, say that a court judgment is the wisest way to resolve this issue. But that position fails to recognize the obvious fact that this is not about contractual obligations and 50-year-old legal agreements.

More to the point, it is a question of equitable tax policy for Memphians. Surely, no one in county government would argue that it is fair that Memphians pay twice for services and that city taxpayers- -who have lower median incomes - should pay a greater percentage of their incomes in taxes than taxpayers outside Memphis - who make higher median incomes.

That’s why it was encouraging that Mr. Huntzicker said that city and county governments should begin discussions to consider the full array of funding issues between them. That said, it’s got to begin immediately and have a deadline that we’ll live to see, based on 30 years of promises that city and county engineering will be merged or headlines two years ago that city and county fire departments were looking to merge.

It’s past time to bring rationality to our local tax structure, and it’s way past time for Memphians’ tax burden to be equitable and fair. In the end, there should be no greater objective for either city or county governments.

Thursday, December 11, 2008

This Week On Smart City: Going Green And Going Online

How do you preserve a magnificent national landscape by promoting city living?

That's the mission of The Cascade Land Conservancy, which is working to make Seattle appealing so that sprawl doesn't consume the Cascade Mountains that surround the city. We've got two guests from the Conservancy who will tell us what it does, and how it works with developers, loggers and a community to help save the cascade landscape.

And the world of public planning can sometimes seem closed off to the average citizen. Deb Ryan of the University of North Carolina Charlotte is looking to change that. She's created a virtual collaboration tool called Wikiplanning, which she presented during the Urban 20x20 event before the CEOs for Cities National Meeting last month. We'll talk to Deb about creating a place where citizens can weigh in on the future of their city, and how it all works.

Smart City is a syndicated, weekly hour-long public radio talk show that takes an in-depth look at urban life: the people, places, ideas and trends that affect us all. Host Carol Coletta, president and CEO of CEOs for Cities, talks with national and international public policy experts, economists, business leaders, artists, developers, planners and others on the pulse of city life for a penetrating discussion on urban issues.

Smart City is broadcast at 6 a.m. Saturday and Sundays on WKNO-FM, but it is also webcast and podcast so you can listen to it anytime you like. For the webcast, times for the broadcast in other cities and to sign up for the podcast, visit our website.

Tuesday, December 09, 2008

Sprawl Makes Road To Sustainability Long And Hard

The burgeoning green ethos that’s bubbling up from grassroots Memphis is gaining ground, and it can’t come too soon.

The downturn in gas prices may lull our city into a false sense of security, but we’re confident that the various forces for change – the evolution of cycling from a group of enthusiasts into a community of activists, the ambitious agenda of Sustainable Shelby attacking sustainability on all fronts, and the mushrooming of community-based programs like Green Fork, Green Hope, Clean Memphis, Grow Memphis and more – will not allow us to lapse into lethargy.

The actions of county government that drove up the public debt paid by all of us to about $2 billion and effectively put millions of dollars into the pockets of politically-connected, influential developers and homebuilders produced a pattern of sprawl that will require Herculean efforts to reverse.

The Numbers

Here’s the tale of the tape:

• Of the world’s largest cities by population, Memphis is #159.

• In land area, it is #69 in the world.

• In population density, it is #168.

It would be bad enough to contend with the consequences of sprawl in terms of the financial costs, but the social costs are even more. The warren of houses stamped out on small lots on parallel streets make finding an address in many suburban areas as difficult as finding an address in Venice (where the street names change every block).

Digging Out Of A Hole

Worst of all, the problems that characterize Hickory Hill are destined to be repeated in other areas where the design ethic, the inferior construction and the inattention to creating neighborhoods have been recreated. In other words, there is little question that like Hickory Hill, these sad developments will require homeowners to invest significant money in their houses before the first mortgage is even paid off.

Despite the temporary respite from gas prices, it is likely that there will remain increased interest by many suburbanites in moving westward to reduce their commuting. If we can reduce the average mileage driven by motorists by just one mile, it produces $250 million in additional income.

Sadly, we have to dig out of a really deep hole if we are to create a more sustainable community. Most surveys of green behavior find us on the wrong end of the rankings.

It’s Pretty Rank

Of the largest 50 metros in the U.S., Memphis ranked #45 in city preparedness for an oil crisis. The top 10 cities were unsurprising: 1) San Francisco; 2) New York; 3) Washington, D.C.; 4) Seattle; 5) Oakland; 6) Chicago; 7) Portland, Oregon; 8) Philadelphia; 9) Baltimore; and 10) Boston.

Ranking highest, according to the survey by Common Current, are cities with strong public transit system ridership (which we suspect is tied to delivery of a quality product, the crux of the problem here), well-organized and relatively dense city centers, a high degree of mixed real estate uses (retail, office and residential) and medium-to-high city population density.

Memphis’ ranking in various categories is revealing and points to the areas where we need to concentrate our efforts:

Carpooling: #13

Telecommuting Rate: #50 (dead last)

City Resident Public Transit Commute Use: #36

City Resident Walk/Bike Commute Rate: #38

Metro Area Overall Per Capita Public Transit Ridership: #39

Metro Area Sprawl: #35 (of 46 cities)

Trouble In River City

In stating the obvious, “clearly, the way in which cities and metro areas are planned and developed also has a measurable impact on fuel use, household transportation expenses as well as the degree of dependence on auto transport,” the report might as well have been commenting on Memphis.

A recent survey by BusinessWeek identified the 20 cities where Americans would most like to live and where they would least like to live. Memphis wasn’t on either list. The magazine observed how important it is to attract talent these days, and we’ve repeatedly pointed out the particular challenge facing Memphis when it comes to 25-34 year-olds – the most mobile, most entrepreneurial and best educated generation in history – and the precise group we need to retain and attract.

From 2000-2006, Memphis lost 14,508 people in this demographic, speeding up a skid that began in the 1990’s with a decrease of 6,814. It’s a troubling trend, particularly at a time when Memphis is struggling to compete in a knowledge-based economy. Past public policies, especially tax freezes given to companies that don’t pay living wages and that subsidized industries offering low-wage, low-skill jobs that relegate Memphis to the bottom rungs of economic growth in the future.

Selling Memphis At A Discount

By the way, already, the dismal job creation rate in Memphis and the weak record of capital investments are producing a Greek chorus calling for weakening the PILOT (payment-in-lieu-of-taxes) program of the Memphis and Shelby County Industrial Development Board little more than a year after some of the most liberal policies in the U.S. were reformed.

The mantra from developers and economic development types is that we need to loosen up the public cash register once again because we can’t compete with Desoto County unless we do it.

First off, our challenge isn’t to compete with DeSoto County. That’s part of our problem. We’ve got the question all wrong: we’re competing with cities in Asia and India. And frankly, we’d just as soon see some of the low-wage, low-skill jobs move to DeSoto County so their taxpayers can pay for the social services that they need as a result of not receiving living wages.

Freezing Tax Freezes

If we are going to loosen up the regulations for tax freezes, we sure don’t need to return to business as usual and the over-reliance on tax freezes. As we were the first to point out three years ago, in a 10-year period in which Nashville only stamped approved on 5 tax freezes, Memphis/Shelby County approved 415 tax freezes which waived $60 million a year in taxes (we gave more tax freezes than the other 94 Tennessee combined).

If the IDB returns to the good old days, there would be one of those rare outcries that will reverberate loudly in the halls of government. That said, and this was why we brought up tax freezes in the first place, if the IDB is going to shift from perpetuating Memphis’ non-competitiveness in the knowledge economy to being a vehicle to create the kind of community that we need to compete in the future, it needs to tie its incentives to the objectives and strategies of Sustainable Shelby and to the overall sustainability programs that are creating a buzz about cities today.

And if you don’t think that is important, let us quote BusinessWeek: “Perception is a big deal when it comes to places. Everybody has preconceived notions.”

On A Bubble

Here’s the thing: we don’t have the margin for error that many cities have. We have to get things right, and we have to make the most of every investment, every program and every opportunity.

That’s why Sustainable Shelby is so crucial. It institutionalizes sustainability as a core principle and a core business of the public sector, and that’s an important beginning. There is so much to do, and we are blessed right now by the presence of so many people – especially young, creative ones – who are prepared to do what it takes.

Tomorrow: Bikes as vehicles for change

Sunday, December 07, 2008

Moving Memphis From Pay Day Lending To Micro-Lending

It seems more than passing strange that at a time when local government is considering a lawsuit against the predatory lending that contributed to Memphis’ foreclosure catastrophe, some members of Memphis City Council would try to defend the predatory lending that is the underbelly of our personal finance businesses – pay day loan companies, title loan businesses and check-cashing storefronts.

It made for an odd tableau at last week’s City Council meeting as high-powered, politically-connected lawyers stood side-by-side with clients who looked like they stepped out of one of those newscasts of people whose trailers had just been hit by a tornado. To their credit, Council members did vote unanimously to move ahead with a change that was almost negligible in its impact, but only after some seemed to try to throw a lifeline to members of these parasitic businesses.

It is troubling what we are willing to accept as part of our city – as long as it’s “only” the poor who are being victimized. City Councils in the past have shamelessly acted as an enabler to the worst visual polluters in Memphis – the billboard industry – and given them carte blanche to pepper inner city neighborhoods with an endless array of ads for liquor, cigarettes and gambling. These billboards deserve greater regulation, but there’s been little will to do it, so we guess that it’s no surprise that some Council members – ironically, representing inner city constituents – seemed to grudgingly go along with a modest requirement that the companies could not be located less than 1,000 feet from each other.

There’s Legal And There’s Legal

We admire Councilman Bill Morrison for putting it on the City Hall agenda. His concern is well-placed, and because of him, we did at least acknowledge the presence of companies in Memphis whose introductions at City Council seemed only to be missing the theme from Jaws, so willing are they to feast on desperate victims trying to keep from downing in financial emergencies.

Councilman Morrison, who is emerging as a reliable voice of reason and source of new thinking, has greater ambitions for regulating the companies, but at least this was a start. It’s hardly a fair fight in City Hall, because for too many politicians, money talks, and as usual, there’s no one lobbying for the poor.

Their neighborhoods remain dumping grounds for tawdry businesses that prey on them and are justified by some Council members on the simplistic grounds that they are “legal.” Well, so are strip clubs, but no one wants them in their neighborhoods.

Naked Greed

As a result, valiant Thomas Pacello, assistant city attorney with the Memphis and Shelby County Division of Planning and Development, was left to reason with some Council members who seemed unable to grasp the simple notion that if government can regulate naked bodies, surely it can regulate naked predatory lending.

Ultimately, the new ordinance will not end the financial strip mining of our poorest neighborhoods, but at least it sends a message, albeit a soft one, that our community is concerned about companies that charge so much in interest that they make usury look inviting. Despite that, Council Member Barbara Swearengen Ware said that “nobody’s holding a gun to these people to make them walk in and hand somebody the title to their car.”

We couldn’t help but think of the famous Woody Guthrie lyric: “Yes, as through this world I've wandered/I've seen lots of funny men/Some will rob you with a six-gun/And some with a fountain pen.”

Robbery By Another Name

We’re certain that Council Member Ware’s true feelings aren’t as callous as they sounded, because there are places in her district where desperation is as real to her constituents as guns in their backs. And like the “company store” before it, once you start doing business with the loan predators, it’s awfully hard to ever pay off your balance. After all, the business model is built on keeping you in debt.

When the annual interest rate is about 450%, it’s pretty hard not to stay upside down in the loan. Consumer Federation of America conducted a survey of 100 lenders that showed they frequently charged 650%, a rate that stirs up nostalgia for the days of the old Mafia loan shark.

Parenthetically, all of this conjured up the war in the blogosphere some time back when it was pointed out that there was a strong correlation between the number of these pay day lenders and Christian Right strongholds in the Bible Belt, despite the Biblical admonition against usury. Pay day lenders have been able to side stepped usury limits by affiliating with a South Dakota or Delaware-chartered financial institution.

Big Bucks From Poor People

You wouldn’t know it by looking at the sometimes seamy storefronts, but this is big business. According to the Center for Responsible Lending, “despite attempts to reform pay day lending, now an industry exceeding $28 billion a year, lenders still collect 90 percent of their revenue from borrowers who cannot pay off their loans when due, rather than from one-time users dealing with short-term financial emergencies.”

The Center also concluded that “states that ban payday lending save their citizens an estimated $1.4 billion in predatory payday lending fees every year. “ North Carolina shut down payday lending in 2006 and an analysis by the University of North Carolina said that the closing “had no significant effect on the availability of credit for the households of North Carolina.”

To fill the gap in states without payday lending, some credit unions have set up Salary Advance Loans with annual interest rates of 12%. While we are supportive of emulating North Carolina’s actions, it’s unlikely to happen, because, to repeat, there aren’t any high-paid lobbyists in Nashville representing the interests of the state’s low-income families.

Memphis Microcredit

Perhaps, what we need to do here is to experiment with microcredit, the kind of loans that have proven successful for Third World nations. It began in Bangladesh, and there are census tracts in Memphis whose infant mortality rates and other disturbing demographic statistics aren’t too different from that South Asian nation.

Microcredit is even gaining attention of the traditional financial industry, which is considering ways to get in the game.

In other ways, if Memphis City Council wants to help out, it could consider ways that City Hall could help set up some form of micro-lending here. We are willing to bet that just like and other micro-lending sites, there are an awful lot of Memphians willing to lend money to allow people to have more financial sufficiency and to engage in self-employment projects.

Memphis Branch Of Kiva

It may be that Kiva isn’t the exact model for our city, because it’s aimed especially at entrepreneurship, but we love the person-to-person aspect of the program. But if we can inspire and create national model programs like MIFA and Church Health Center, and if social entrepreneurs like Aaron Shafer can imagine ways that poor people can control their own destinies, surely we can come up with the model micro-bank for Memphis.

Perhaps, besides offering a new way to address the financial needs that are being exploited in neighborhoods across Memphis by predatory lenders, this kind of program could also contribute to an attack on the divisions that weaken us at the time when community connectivity is a competitive advantage.

We leave the details to people a lot smarter than we are, but put us down to buy the first share in this revolutionary people-to-people business.

Thursday, December 04, 2008

This Week On Smart City: Christmas In The City

This week on the show, we're kick starting the holiday season with a program about celebrating the holidays in an urban environment. We'll speak with Cindy Gatziolas of the Chicago Mayor's Office of Special Events . She'll tell us about the city's plans for the holidays, and how a city works with private organizations to make the season bright.

Then, what's Christmas in the city without a Christmas carol? We'll speak with sound designer Lindsay Jones about bringing the sounds of Charles Dickens' London to life in the theatre.

All that, plus we'll have a line-up of our own ghosts of Christmas past. We've brought back some of our favorite guests and friends of the show to discuss their holiday plans, and what makes the city such a special place to celebrate this time of year.

Smart City is a syndicated, weekly hour-long public radio talk show that takes an in-depth look at urban life: the people, places, ideas and trends that affect us all. Host Carol Coletta, president and CEO of CEOs for Cities, talks with national and international public policy experts, economists, business leaders, artists, developers, planners and others on the pulse of city life for a penetrating discussion on urban issues.

Smart City
is broadcast at 6 a.m. Saturday and Sundays on WKNO-FM, but it is also webcast and podcast so you can listen to it anytime you like. For the webcast, times for the broadcast in other cities and to sign up for the podcast, visit our website.

Wednesday, December 03, 2008

Mayor-led School Districts Make The Grade

Chair of the Education Department at Brown University Kenneth Wong, in Nashville yesterday, made a compelling case for our capital city to move toward a mayor-led school system.

It’s impossible not to apply the same advice to Memphis.

Dr. Wong, who holds the Annenberg Chair in Education Policy and directs the graduate program in Urban Education Policy at Brown University, is author of the influential book, Education Mayor: Improving America’s Schools. He also is familiar with Memphis City Schools as a result of his years of work with Partners in Public Education (PIPE).

One Vote For Mayors

Dr. Wong, who has devoted 20 years to the study of school governance and organizational structures, is one of the most respected and compelling speakers on the opportunities for urban districts like Memphis City Schools to improve and excel.

He said the tension in these districts is normally between a structure based on centralization and one based on decentralization. But, he said, there is a third way which involves establishing a city mayor in a formal leadership role as the head of the district.

Based on his detailed research, he concluded that mayor-led districts create a “stronger sense of accountability, keeping in mind that you are spending public money and the inherent messiness of the democratic process.”

The Blame Game

Underscoring the importance of large urban districts to the future of the U.S., Dr. Wong pointed out that although there are 15,000 school systems in the U.S., but 27% of all students attend the largest 129 districts and 41% attend the largest 375 districts.

“The challenge of the urban district is interesting,” he said. “There is intense politics in the face of economic challenges. They need to know how to deal with competition. They’ve been complacent. They’ve been given public money, and they think about how to create more staff rather than how to create more productivity.”

Meanwhile, the circular “blame game” goes on unabated, with superintendents blaming their boards, the boards blaming City Halls, City Halls blaming school systems, and around and around they go. “One office has to be accountable and that should be the mayor’s office,” he said.

It’s About Results

While some suggest that this structure could reduce citizen involvement in their schools, he said that voter turnout has increased in cities where the mayors are in charge of public education. But more importantly, he said that in these school districts, student performance has improved steadily, spotlighting Chicago’s dramatic success in increasing student proficiency, climbing about 50%.

He reached the conclusion that mayor-led schools improve student performance after analyzing results and after controlling for poverty and ethnicity. Then, he reviewed outcomes to determine if the different in governance made a difference. “Student achievement (in mayor-led districts) is moving in a statistically significant way,” he said. “In two to three years, we see four to five months of additional learning, and I believe that is the case because of stronger accountability and a more strategic use of resources.”

In New York City, he said that the city school district under a Bloomberg-led district improved significantly and test scores caught up with the rest of the state.

The Buffer Zone

In particular, he said that mayors don’t just look for educators for their management team, opting instead for a more diverse group of managers who includes more non-educators to tackle budgeting, finances, information technology, and other areas where outside experience can encourage innovation and change. “The mayor can assemble a team that buffers politics from the classrooms so teachers can do their jobs,” he said.

Overall, “mayors are strategic thinkers, and since Proposition 13, it has been important to them to have fiscal solvency,” Dr. Wong said. “When they take over a system, they immediately ask how the money is being spent, and we see a move of resources from the central office to classrooms.”

In addition, his research indicated that in mayor-led districts, there is a tendency to move more funding to low-performing schools and to improve bond ratings, because these are decisions that mayors are accustomed to making. As a result, while student scores are improving, school funding hasn’t increased. “They aren’t spending more. They are spending differently,” said Dr. Wong.

The Better Angels Of Their Nature

When asked about the reaction of teachers’ unions to mayor-led districts, he pointed out that in the 13 years before the mayor took control in Chicago, there were 7 teacher strikes. In the 13 years following the takeover by the mayor, there were none. “Mayors have political capital that they can use and they have more negotiating experience,” he said.

It’s also worth remembering that teachers’ unions are changing, he said. For example, the teachers’ union in New York City is now operating two charter schools instead of lobbying against them.

One surprising aspect of the research is that mayors are more willing to experiment with innovation and take risks, because they can see public education with new eyes.

Asking The Right Questions

The key questions that cities should ask: “What is the opportunity cost if we don’t redesign our district now? What is the cost of losing a generation of students?”

Also, he said that improving urban schools by emphasizing higher standards and establishing schools as hubs for their neighborhoods are crucial to attracting the middle class back into the city. “It’s about creating an urban district that is the first choice for all parents in your city,” he said. “That’s the most important question of all.”

While endorsing the mayor-led district as a strategy for better schools, Dr. Wong said that one size does not fit all. “There is no one single design or framework,” he said. “It varies from city to city.” Today, there are 2 million students attending schools managed by city mayors, the same number nationwide that are attending charter schools. “Most of all,” he said, “institutional competition is a healthy development.”

Tuesday, December 02, 2008

Nashville Flirts With Mayor-led School District

In Nashville, the election of a new city mayor and the selection of city school superintendent converged to create a growing maelstrom resulting from change – City Hall’s call for change and the educational community’s tendency to fight anything resembling change.

While the tension created by a dynamic, visionary new mayor and the resistance inherent in most urban school districts is instructive from a political perspective, it should be even more fascinating for us because of the chance that the same forces will converge here in 2011.

In our capital city, new Mayor Karl Dean cuts an impressive political figure, creating even more energy in a city already doing an awfully lot right in today’s economy. But with his push for broad green strategies, new parks, school reform and a new vision for his city, he has the kind of opportunity that can be historic for his hometown.

Preaching From The Pulpit

In particular, he is clearly comfortable being labeled as the education mayor, and from his bully pulpit, he has challenged conventional thinking and the old guard to suggest that more national resources and private financial support are needed to transform the 75,000-student, countywide Metropolitan Nashville Public Schools into a magnet for young families and the middle class.

It’s interesting to watch these dynamics play out in Nashville. There’s David Fox, school board chairman, clinging by his fingernails to his turf, and then there is Mayor Dean, who sensibly interprets his mandate as mayor as a demand from the public to “fix” public schools.

To that end, he is aggressively asserting several programs that have been in Memphis for a couple of years – New Leaders for New Schools, The New Teacher Project and Teach for America – and he is enthusiastically calling for more charter schools. While the mayor and the business community in Nashville are pursuing these programs with the same commitment that they have shown to prospective businesses, the same programs here generally receive lukewarm from new Superintendent Kriner Cash on their best days and the cold shoulder on their worst.

Fresh Eyes

To give you an idea of the breath of fresh air that Mayor Dean is bringing to all things public in Nashville, a couple of weeks ago he proposed that the city library system take over the operations of the school district’s library. Of course, some people in the school district immediately started talking about how impossible it is.

Meanwhile, the Nashville mayor’s continued push for a mayor-led district – similar to Chicago, Boston, Philadelphia, Providence and 10 more cities – where the mayors are responsible for the operations of the city’s schools and accountable for their success or failure.

After an initial flirtation with the idea, the school board predictably seems to be doing nothing to give the idea the fair hearing that it deserves, but the potential of a mayor-led district gained a major push this morning when respected Brown University scholar and expert on school governance Ken Wong advocated a mayor-led district to a well-attended breakfast meeting of the Nashville Area Chamber of Commerce, which has taken the lead in facilitating the discussion about a change in school governance.

An Issue Whose Time Has Come

Dr. Wong chairs the Education Department at Brown University, where he holds the Walter and Leonore Annenberg Chair in Education Policy and directs the graduate program in Urban Education Policy, and is one of the most enlightened speakers on issues shaping today’s urban school districts.

In Nashville, he presented his research on the strides being made by districts where mayors appoint the superintendent and are ultimately responsible for operations of their public schools. It was an idea advanced earlier this year by Memphis Mayor Willie W. Herenton, but collapsed under its own weight as the Memphis City Schools Board of Commissioners moved ahead with selection of a new superintendent.

Clearly, it was not a scenario relished by Supt. Cash since it’s a condition that would release him from his contract with Memphis City Schools, but the issue of a mayor-led district should be a major subject for the next city mayor’s race because it is an idea whose time has come.

Death Penalty

Unlike Memphis - which needed Tennessee Governor Phil Bredesen to flex his legal muscle to start the clock on a mayor-led district here - Nashville in a year is likely to give the governor the option within the normal context of the state educational accountability law.

That’s because this year, after five years of failing to meet state standards, the Nashville school district was placed on the high-priority list and the Tennessee Department of Education took partial control. Next fall, if the Nashville district has not improved, the system could get the death sentence. At that point, Governor Bredesen can throw the switch and appoint someone like Mayor Dean or Vanderbilt University to run the district.

While there is broad business and City Hall consensus behind bold action, it’s still uncertain that Governor Bredesen will be willing, as he prepares to re-enter private life, to put his legacy on the line for Nashville schools and invest his political capital to give Mayor Dean this level of control. That’s not even mentioning that he knows that if he does anything to help Nashville, there will be a large delegation from Memphis standing in his front office waiting to ask for the same thing here.

Center Of The Universe

It will be fascinating to watch all of this play out. Already, we’ve learned one thing that we’ve always suspected: there is no longer any question that Nashville receives preferential treatment. It was answered conclusively by the actions of the DOE in Nashville and its inaction in Memphis. When Memphis City Schools found itself in similar straits, there was the unmistakable feeling that DOE couldn’t wait to get out of here.

After all, the deep suspicion lingers that DOE is keeping two sets of books – one for Nashville and one for Memphis. It’s worth remembering that even though the Nashville district is on the state list, the schools there still outperform our own.

Back to DOE’s preferential treatment of the Nashville school district, it hasn’t been that long that the Department of Education, given a chance to force transformative change in our district, accepted the so-called and aptly named Proposal for Expenditures of Additional State Revenues,” largely a list of everybody’s favorite ideas with no thread of academic philosophy underpinning them.

If Only It Was Us

Compare that to Nashville. There, the DOE mobilized into action and focused its considerable influence and resources on turning things around, taking unprecedented action to change the organizational structure of the Nashville district. State officials have appointed three associate superintendents to oversee instruction, along with new leaders for the district’s federal, gifted and special ed programs.

The state has replaced 60 principles and assistant principals who were considered ineffective and the curriculum was changed to emphasize literacy and numeracy. Small learning academies were opened at some high schools along with more career and technical programs.

A Vanderbilt University education expert said that these drastic measures are generally reserved for districts in the worse conditions (which suspiciously sounds like the definition of our district). DOE’s action in Nashville has been called the single largest school district reform effort ever undertaken in Tennessee, begging the question of what it would take to get that much assertive action out of state government to help here.

Squeaky Wheels

At a time when DOE has treated a “state take over” of even a few schools in our district as a petrifying idea, there has been no such reticence when it came to Nashville. Perhaps, it’s the political equivalent of “out of sight, out of mind.”

Then again, maybe with Nashville media daily and loudly trumpeting the serious problems in their schools, state officials were being reminded constantly that something had to be done and Nashville reporters regularly called DOE to ask what its officials were going to do to fix things.

Obviously, it’s easier for DOE to ignore problems 210 miles away in a city that too often accepts poor schools as a simple fact of life. It’s true that the squeaky wheel gets the grease, but that’s certainly true when it’s the squeaky wheel that you have to hear all day long every day.

Tomorrow: Dr. Wong’s Hypothesis