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Responses to Economic-Growth Questionnaire PDF Print E-mail
News/Features - Feature Stories
Written by Jeff Ignatius   
Wednesday, 05 November 2008 02:37

Included here are the responses we received to our economic-growth questionnaire, which was sent to 20 representatives of local governments and economic-development organizations.


Bob Lundin, president, Bettendorf Chamber of Commerce

Economic growth is the machine that moves the community forward. The downside is does the community have the infrastructure to support the growth? This is usually a timing problem. Expanded tax base provides revenue to help meet its infrastructure needs.

Why is it important to pursue economic growth on a local level?

Economic growth is at the heart of a communities' ability to increase jobs and expand its tax base. 80 percent of economic development comes from business and industry within the community.

Can a community survive or thrive without genuine economic growth (that is: beyond population growth and inflation/interest)? Why or why not?

It's not a question of survival, but one of opportunity.

What are the consequences, positive and negative, of local economic growth?

Economic growth is the machine that moves the community forward. The downside is does the community have the infrastructure to support the growth? This is usually a timing problem. Expanded tax base provides revenue to help meet its infrastructure needs.

What are the consequences, positive and negative, of local economic contraction?

Stagnation.

What are the consequences, positive and negative, of local economic growth that only keeps up with population growth and inflation/interest?

Status quo is not real growth.

What is the ideal level of economic growth for this community, and why?

I'm not sure there is an ideal level of growth. Much depends on availability of a trained workforce, technical support, site development, financial assistance, type of business/industry city is looking to attract, etc.


Scott Tunnicliff, former president and CEO of the Bettendorf Chamber of Commerce

Why is it important to pursue economic growth on a local level?

Because local government and taxing authorities are essentially service businesses, utilizing taxes to provide administrative oversight, fire and police protection, parks and recreation, street maintenance, snow removal, libraries and other amenities. Public education can be grouped with this, as it too is a taxing authority providing a service to constituents.

Like any business, local taxing authorities seek new customers so that more revenue may be generated to cover the rising cost of service provision. Without new customers, the cost must be borne by existing ones.

Also like a business, local taxing authorities also must take good care of existing customers or lose them. When services are deemed to be a good value, communities grow; when customers feel they are being overcharged, they go elsewhere.

Can a community survive or thrive without genuine economic growth (that is: beyond population growth and inflation/interest)? Why or why not?

Yes, it can. If it keeps its focus on satisfying existing customers, it can create an environment where sufficient numbers of people and businesses will be attracted to an area, replacing those who leave due to attrition. The challenge is to maintain this level of satisfaction, make certain other potential customers are aware of it, and make sure decisions made with respect to incentives, land use and planning are aimed at genuine economic growth. It is not easy, but it is possible.

What are the consequences, positive and negative, of local economic growth?

Positive ones include an expanded tax base, a more diversified economy, a broader range of career opportunities and a greater chance of an influx of people from diverse cultures, ages and backgrounds. Negative can include the potential for an excessive critical mass of people, which could lead to greater amounts of poverty and a disenfranchised underclass and increased rates of crime. It can also, depending on the nature of the growth and the revenue derived from it, create a greater strain on the provision of services such as street police and fire.

What are the consequences, positive and negative, of local economic contraction?

A more focused and creative use of resources, a waking up of citizens to the danger of complacency, and a heightened awareness of the importance of planned land use and community re-development. Negative ones are well known from the mid-1980s. A loss of payrolls and career opportunities, declining enrollments in schools, and a strain on maintaining existing infrastructure.

What are the consequences, positive and negative, of local economic growth that only keeps up with population growth and inflation/interest?

It gives a community a better opportunity to plan for the longer term, making strategic decisions regarding schools, amenities and tax policy based on reliable expectations rather than either doomsday scenarios or wishful thinking. The negative consequences are that a community can stagnate, retaining only those dedicated to preserving the status quo.

What is the ideal level of economic growth for this community, and why?

With flat population growth over 30 years, the focus should be aimed at re-development rather than new development. Resources should be directed toward areas that in danger of becoming liabilities and trying to encourage reuse and reinvestment that will make them assets again.

Growth will occur at a natural and sustainable pace if those charged with providing quality services maintain their focus on providing value to their existing customers.


Lew Steinbrecher, Moline city administrator

Economic development is important for the City of Moline because it is the means to an end. The City provides several fundamental services to the community, that being police protection, fire suppression, emergency medical response, street maintenance and garbage collection. The City primarily relies on property taxes and sales taxes to provide the revenue stream to fund the delivery of these services. Economic development is the method to grow the pie (equalized assess value and sales tax revenues) so that the City doesn't have to raise the tax rates in order to increase revenues to pay for these essential services to the community.

I think it would be difficult for a community to thrive without growth. It would likely survive for quite some time as long as it continually reduced services to match low or negative revenue growth, just as the City of Moline had to do with its 2009 budget, but you have to have either new investment or reinvestment to grow community wealth defined as growth in the equalized assess valuation and growth in sales taxes.

For Moline, I see as one of the most positive results of local economic development is the re-use of brownfields and converted abandoned industrial and commercial properties that have blighted the community into tax generating properties. This grows community wealth and regenerates property that would otherwise drain resources and making it a revenue producer. And it cleans up the environment.

I think it would be most ideal to see economic growth in the range of about 5% (perhaps 6-7%) annually for the City of Moline. That would generate sufficient revenues to pretty much maintain municipal services at their current levels without causing an increase in the tax rate. I don't think Moline could grow much more than that anyway because of restrictions placed on municipalities concerning annexation. Most of our economic growth is the result of redevelopment opportunities where developers reinvest in under-performing properties. That is another benefit of redevelopment where we as a society have abandoned old property for new greenfields. We can not continue to sprawl into the country-side and eat up farmland. We as a society need to re-use our older properties and put them to better uses in a more urban environment rather than continuing this suburban development practice.


Ray Forsythe, Moline economic-development director

Economic growth that provides for a replacement of the existing workforce as they cycle out of their positions as well as enough new growth to provide for increase of the tax base will allow for an atmosphere where new residents would want to relocate to the community. The ability to expand services and amenities that pay for themselves or provide a positive growth will enable a pattern of positive impacts on the community. This again could have a very positive impact as the increases in opportunities will play off each other and provide significantly more opportunities that build off each other.

Why is it important to pursue economic growth on a local level?

Economic Growth on a local level is very important as the new growth will help to maintain the current level of services as well as expand the opportunities for the changing demographic character of a community. Costs rarely go down so it is necessary to find new sources of revenue just to maintain. Communities like Moline that are dependent on sales and property taxes require increased activity to keep up with inflation. A dynamic community will assist in the retention and attraction of new companies as well as residents.

Can a community survive or thrive without genuine economic growth (that is: beyond population growth and inflation/interest)? Why or why not?

I think it would be very difficult for a city to survive without growth. Because there is inflation and natural depreciation on facilities it is vital that growth continues.

What are the consequences, positive and negative, of local economic growth?

Negative: decline and loss of population would result in either reduction of services or a complete loss.

Positive: a vital community will enable increased amenities or lower costs for individuals. Population growth would provide for not only maintaining existing workforce but would also have additional benefits of creating new opportunities.

What are the consequences, positive and negative, of local economic contraction?

What are the consequences, positive and negative, of local economic growth that only keeps up with population growth and inflation/interest?

Negative: similar to what I said above however it could exponentially reduce services as an aging population requires different services and that coupled with the loss of workforce could have devastating impacts on a community.

What is the ideal level of economic growth for this community, and why?

Economic growth that provides for a replacement of the existing workforce as they cycle out of their positions as well as enough new growth to provide for increase of the tax base will allow for an atmosphere where new residents would want to relocate to the community. The ability to expand services and amenities that pay for themselves or provide a positive growth will enable a pattern of positive impacts on the community. This again could have a very positive impact as the increases in opportunities will play off each other and provide significantly more opportunities that build off each other.


Tara Barney, DavenportOne president and CEO

Why is it important to pursue economic growth on a local level?

We believe it is important that Davenport take whatever steps necessary to ensure its own growth and prosperity; no one else pursues it for you. The State of Iowa, quite properly, focuses on attracting development to Iowa, without regard to location. The Quad City Development Group, similarly, focuses on attracting business interest in our bi-state region. But it's up to Davenport to capitalize on how we can uniquely attract people, jobs and investment within our city limits.

Davenport taxpayers should assume other communities are pursuing economic growth strategies that distinguish them as places of choice for residents, companies and jobs. We cannot sit back waiting to react while other communities are proactive.

If Davenport does not grow its population, the average Davenport taxpayer will pay more for comparable city services, eroding our overall quality of life. If Davenport does not grow, local companies will lack the stable and predictable workforce and customer base to continue doing business in our region. From a regional perspective, a growing Davenport helps stabilize the bi-state region. Davenport today is poorer, older and smaller than it once was and that is not a success formula for Davenport or the Quad Cities in the long run.

What are the consequences, positive and negative, of local economic growth?

As Davenport grows and diversifies its tax base, we lessen the burden of the fixed costs of local government on existing taxpayers. Growing communities are marked by more jobs, increased wealth, higher home values, more business activity, additional retail, generally less crime - attributes that attract additional numbers of people, jobs and investment. Controlled growth that focuses on in-fill development and takes advantage of existing infrastructure, wherever possible, lessens sprawl.

Negatives of growth? Its possible increased population could place higher demands on existing local government services and personnel and necessitate additional infrastructure, public services and schools unless we re-use existing infrastructure and discourage sprawl through sound planning and enlightened public policy.

Can a community survive or thrive without genuine economic growth (that is: beyond population growth and inflation/interest)? Why or why not?

Communities can survive without growth but they cannot thrive with a poorer, smaller, aging population paying more for basic services and aging infrastructure. Local companies surely cannot thrive without a stable and predictable workforce and customer base.

What are the consequences, positive and negative, of local economic contraction?

As local economies shrink and contract, communities see fewer jobs, fewer businesses, and often, higher crime rates (see Upjohn Institute study of Davenport Promise) as the community struggles to survive.

What are the consequences, positive and negative, of local economic growth that only keeps up with population growth and inflation/interest?

If growth in the city stagnates, Davenport never gets ahead. Maintaining the status quo leaves us vulnerable to a repeat of the farm crisis of the 1980s. There are few advantages to marginal or flat growth when our neighborhoods, schools and buildings are not fully occupied.

What is the ideal level of economic growth for this community, and why?

Our immediate goal should be to restore Davenport's population to the level we enjoyed before the farm crisis of the 1980s - when our existing schools, neighborhoods and storefronts were more fully occupied. Over a longer term we should define ideal growth as "sustainable growth"; that is enough business and residential growth to achieve regional full employment plus the additional increment of new residential growth that will provide the employment base to maintain full employment and a predictableworkforce as business velocity grows. It seems that 3% growth is a useful goal to meet this standard over the coming years. Since our regions' growth over the past years has been flat, the .8% growth we enjoyed last year is a start. Consider that the Davenport school district today, can absorb some 2000 additional students with current classroom facilities.


Scott Feldt, East Moline director of economic development

Preface

It is important to distinguish between economic growth and economic development. Economic growth is a result while economic development is a process. Economic growth is often defined as an increase in the capacity of an economy to produce goods and services, compared from one period of time to another. Economic development is defined as efforts to improve the economic well-being and quality of life for a community by creating and/or retaining jobs and supporting or growing incomes and the tax base. The questions submitted focus on economic growth and not economic development. Therefore, the question as to whether local economic development efforts are a wise investment is not really addressed. My responses focus on economic growth as outlined in the questions.

Why is it important to pursue economic growth on a local level?

To put it simply, economic growth pays the bills. Economic growth is important to a community's well-being and prosperity. Economic growth brings additional assets and resources into the community in the form of land, buildings, infrastructure, people, jobs and revenues. All of these things help a community to evolve and progress to improve the lives of its citizens.

Can a community survive or thrive without genuine economic growth (that is: beyond population growth and inflation/interest)? Why or why not?

Only in limited instances. Communities that are self sufficient are likely to survive without economic growth. These communities are most often small and affluent. The costs that the community must bear are manageable and the community has the necessary revenue sources to address any unforeseen expenses or economic downturns. The challenge for most communities is that they rely to some degree on a number of revenue sources that are beyond the community's control whether it be intergovernmental transfers (state/federal aid), sales tax revenues, or other government fees and charges. Therefore, communities need economic growth to help fund general government operations and additional community investment. The revenues generated by economic growth are often the funding source for projects that improve the quality of life within a community and in turn improve the lives of its citizens.

What are the consequences, positive and negative, of local economic growth?

Local economic growth has many more positive impacts than negative. First and foremost, economic growth brings increased resources and assets into the community. These increased assets can lead to a variety of other potential positive benefits: increased tax base; more diversified tax base; lower tax rate; increased community investment; and better quality of life. Increased growth does present some community drawbacks in the form of additional investment costs to obtain and maintain the new community assets. In addition there are other potential challenges such as increased costs for additional government services, potential tax levy/rate increases to fund community improvement, as well as land use and planning issues that would need to be addressed.

What are the consequences, positive and negative, of local economic contraction?

Economic contraction has few if any positive impacts. Depending on one's perspective, an economic contraction will likely lead to reduced community investment and consequently a lower tax levy, but with what effect? Economic contraction produces a smaller tax base which leads to a higher tax rate and decreased community investment. An economic contraction does little to improve a community's well-being.

What are the consequences, positive and negative, of local economic growth that only keeps up with population growth and inflation/interest?

Economic growth that is static with other growth factors (population and inflation) has few positive or negative consequences. If the community's economic well-being remains unchanged, it can be argued that the tax rate should remain unchanged as well. And while the community continues to maintain its physical assets (buildings and equipment) and infrastructure (roads, water and sewer), there is a depreciation cost that the community bears as these items become older and move closer to the need of repair or replacement.

What is the ideal level of economic growth for this community, and why?

The ideal level of growth is something that must be determined by the community itself and what it defines as economic growth. I would venture to say that all communities strive to improve the well-being and prosperity of their community, but different communities take different approaches to achieve this goal.

Most communities try to balance the goal of increased land and business development with the costs of providing the necessary services and infrastructure. They strive to have the long-term financial revenues (property taxes, water rates, etc.) of development be greater than the costs (services, infrastructure and incentives) of that same development. This allows communities to utilize those additional funds for other quality of life projects to further improve the community.


Greg Champagne, Rock Island director of community and economic development

Why is it important to pursue economic growth at the local level?

A fundamental reason is jobs, both creating new job opportunities and retaining existing jobs in the community. Jobs help provide disposable income and allow job holders to purchase goods and services which in turn helps support additional jobs. For example, a person working at local manufacturing plant earning a paycheck will most likely buy groceries, a car, rent or own a home, perhaps attend an event at a local venue or spend that paycheck at a retail store. That means that there must be someone working at the grocery store, car dealership, banks or mortgage company, retail store, etc. to serve that "customer", which creates job opportunities. Also, economic growth can enhance and expand a city's revenue base through increased property taxes, retail sales taxes, permit fees, water/sewer charges, etc. New growth helps spread the costs of local government services over a broader base thereby reducing the costs for everyone in the community and it helps a city meet the increasing cost of providing basic services to its citizens. New growth may also help the local economy to become more diverse which will help to better withstand periodic downturns in various sectors of the economy when they occur.

Can a community survive or thrive without genuine economic growth?

A community can probably survive but most likely will not thrive without genuine economic growth.

What are the consequences, positive and negative, of local economic growth?

The positive consequences of economic growth would include providing area residents incomes that allow them to buy goods and services in the community. In addition, positive economic growth can help stimulate additional growth. An example is retailers who look at areas that are growing when making store site location decisions. Increased new housing starts, increasing population, increasing incomes are all critical considerations for retailers looking for sites and these are all elements of positive growth. There also seems to be a physiological element to growth in that many people want to live in a community that is growing and not contracting. Growing communities appear to be better able to attract additional growth being perceived as more vibrant and having a stronger economy in which to make a housing or commercial investment. On the negative side, much has been written about urban sprawl and the consequences of a national economy that is oil dependent. The more cities and regions grow into outlaying areas, the more costly it may be to access remote areas by auto absent mass transit systems. In addition, new outlaying development may use scarce land resources where a redevelopment or reuse opportunity closer to the already developed area or a backfilling of empty sites would create a more effective use of land. Finally, the cost of new infrastructure to support new growth can be costly. While the long term paybacks can be substantial, covering the upfront capital costs for new street, water, sewer or other facilities can be a challenge.

What are the consequences, positive and negative, of local contraction?

Some negatives of local contraction are the loss of jobs, lessening of support for community organizations, deterioration of housing stock, increased property abandonments or vacancies and the stigma or image of being an undesirable place to live. Some positives could be an available work force, readily available buildings and sites, reduced occupancy costs, a community willingness to more aggressively support new investment and reduced cost of living.

What the consequences, positive and negative, of local growth that only keeps up with population growth and inflation/interest?

Probably the most significant consequence is the perception that the community is not moving forward, that it is stagnant which may affect investment decisions or the ability to foster new growth.

What is the ideal level of economic growth for this community and why?

There is no easy answer to this question. The Quad Cities has been a relatively slow growth economy over the past twenty years, however, that's not necessarily bad. While we haven't experienced the high growth rates of some other areas of the country (particularly the west coast / southwest area) we are also not having to deal with the major declines some of those areas are now experiencing. The Quad Cities economy is characterized by more subtle changes as opposed to abrupt peaks and valleys. If there is an "ideal" level of growth for this community, I would see as continued moderate growth, continued diversification of the jobs base, steady improvements in quality of life issues and a regional perspective on development activities that provides a mix of attracting new jobs to the community while helping existing businesses to grow.


City of Bettendorf

Why is it important to pursue economic growth at the local level?

Just like politics, all economic growth is local. Businesses need to be some place, namely within some community. Thus, by necessity, all communities need to be prepared, or even better, proactive. The world never stops, economies are in constant flux, either expanding or retracting, but in the long haul, the costs of goods sold rise over time. In general, growth provides dollars to cover those ever growing expenses of government. In reference to the general populace, economic growth keeps individuals employed, further, as the old saying goes, busy hands are happy hands. People who are employed feel good about themselves and the world around them. Jobs keep people happy, move the economy and allow for amenities to be built and maintained. Symphonies, concerts, sporting events need customers to make them viable. Economic growth allows those dollars to flow to these activities.

If cities and states want to survive they must compete, as every other city and state is in the game of assisting economic growth. No matter where an economic development project begins, it eventually ends in one local government's border, communities need staff to assist with that effort. If for no other reason, communities need to plan for the employment of the youth of their region.

Can a community survive or thrive without genuine economic growth?

Survive yes, thrive no. There are examples of towns all over the state and country that continue to exist with no apparent economic growth.

What are the consequences of local economic growth or contraction?

Economic growth means more jobs, more people, more amenities, greater diversity, happier (employed) people, pride in themselves and their community, and more money to spend. More money to spend means more people will be employed. More stores get built, more homes are constructed, etc.. Family and friends can stay close to each other as jobs allow them to do so. A better economy means more time for the arts, education and a great quality of life. Economic contraction simply promotes the reverse of the above.


Jim Bowman, Renew Moline executive director

Why is it important to pursue economic growth at the local level?

It's really fundamental to the future health and welfare of a community and a region. If you don't pay attention to the community's economic welfare, oftentimes problems can occur, and communities find themselves in a crisis mode, and reacting versus being proactive for economic growth.

Can a community survive or thrive without genuine economic growth?

You might survive, but not thrive, and not keep up with national and global trends.

What are the consequences, positive and negative, of local economic growth?

Negative could be development that exceeds the capacities of public infrastructure or workforce talent pools or even financial markets, where the development really gets ahead of a community's ability to absorb it. And development that occurs uncontrolled and is not well-thought-out and planned. A case in point might be brownfields versus greenfields, where we have urban sprawl instead of well-thought-out, sustainable economic development, and utilizing those disturbed properties first, which is what we're all about. Positive consequences: the ability to attract and capture wealth so that you've got vibrant businesses and the vibrant economy that's growing. And that oftentimes helps retain the youth and the talent and attract more talent to the community.

What are the consequences, positive and negative, of local contraction?

We could lose more population base, and the slow-up of planned development. And frankly just not see development occur. The positive side is that if a community is having excessive growth, contraction can actually slow development down in order to give a community enough time to catch up. You can look around the country and see communities - Phoenix and Las Vegas are good examples - where the development was way ahead of the community's ability to absorb the development.

What the consequences, positive and negative, of local growth that only keeps up with population growth and inflation/interest?

You get a community that is flat, in my mind. You're not able to attract more investment and wealth and talent. You're getting by, and it could result in a community slipping in to more contraction.

What is the ideal level of economic growth for this community and why?

What's appropriate for the region is a good 1- to 2-percent growth in population. Average household incomes should be increasing steadily. The educational attainment levels should be increasing and at least keeping up with national averages. We're not. The age groups, especially 25 to 35, should be growing at a steady rate. We're not as a region. And poverty should be declining.


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