Monday, July 11th, 2011

Are States an Anachronism?

Today and Thursday I’ll give a point-counterpoint on the relevancy and importance of states in the modern era. (Note: Part two is now online as “Why States Matter” ).

Obviously states aren’t going anywhere anytime soon, but a number of folks have suggested that state’s aren’t just obsolete, they are downright pernicious in their effects on local economies.

One principal exponent of this point of view is Richard Longworth, who has written about it extensively in his book “Caught in the Middle” and elsewhere. Here’s what he has to say on the topic:

In the global era, states are simply too weak and too divided to provide for the welfare of their citizens…The reason is a deep, intractable problem. Midwestern states make no sense as units of government. Most Midwestern states don’t really hang together – politically, economically, or socially. In truth, these states and their governments are incompetent to deal with twenty-first century problems because of their history, rooted in the eighteenth and nineteenth centuries.

Longworth expounds upon this to identify a series of specific issues, which I’ll put into my own terms.

1. States do not represent communities of interest. With some exceptions, states consist of cities, rural areas, and regions that have very distinct histories, geographies, economies, and and event cultures. As a result, it is incredibly difficult for legislators and leaders from various parts of the state to find common cause.

Here’s how Longworth describes Illinois:

Illinois, like Indiana, is three states, and for the same reasons. The southern third, again south of I-70, is a satellite of the South – more give to conservative religions, gun racks in pickup trucks, and a deeply conservative Republicanism….Most of the rest of the state is called Downstate to differentiate it from Chicago, even though some of it, such as Rockford, is actually north of the city. It is an unfocused place…what unites this heterogeneous region is a dislike of the third region, Chicago. Chicago dominates Illinois – politically and economically…If the rest of Illinois obsesses about Chicago, Chicago gives the impression – an accurate one, in fact – of never thinking about the rest of Illinois.

Additionally, I might add my observation that this creates a situation where the policies which are right for one area may be wrong for another. Since it is the nature of governments to promote uniform rules, this often leaves one or even all regions of a state with suboptimal rules. In fairness, there are are often some types of flexibility, such as that provided by different classes of cities. But important macro policies remain one size fits all.

Consider Illinois. It’s a combination of a global city core in Chicago, a Rust Belt hinterland, and a southern fringe region. State policy is set by the Chicago elite as a general rule, and predictably it follows a big city, global city favorable model: strong home rule powers for large municipalities, a high tax/high service type model, strong public sector unions, etc. This pretty much works for Chicago, but for downstate it puts their communities in a major economic vice since they don’t benefit from global city friendly policies and are competing against other places that have optimized in other ways.

Indiana being one example. It is pretty much the opposite. Its largest city region is only about 25% of the state’s population, meaning Indiana is dominated by rural and small city constituencies. As a result, Indiana has optimized for a “Wal-Mart” strategy such as through its low-service/low-tax approach, weak environmental rules, and very weak (I’d argue nearly non-existent) home rule powers for even its largest municipalities. This is great if you are a small manufacturing city trying to beat out Ohio, Michigan, and Illinois for low wage manufacturing and distribution jobs (which sounds bad but is realistically the best short term play these places have). But it’s pretty terrible if you are Indianapolis and trying to fight to have a place in the global economy, attract choice talent, build biotech and high tech business clusters, etc.

2. Arbitrary state lines encourage senseless border wars. With limited exceptions, the major cities of the Midwest (and often elsewhere around the country) were founded on major bodies of water like rivers, lakes, or an ocean. These were often boundaries of states, thus major cities are frequently at the edge, not the center of states. This means not infrequently you find multi-state metro areas, which creates structural conflicts of interest. The logical economic unit is the metro area, but it matters from a local fiscal point of view (i.e., the ability to collect income, sales, and property taxes) where particular businesses locate. Thus we frequently see the case where localities spend tons of money on incentives simply to get businesses to relocate within the same metro area. You can have bidding wars without multiple states (such as neighboring suburbs competing over a Wal-Mart), but these seldom involve major state level incentives.

Longworth again summed this up masterfully in a recent blog post called “The Wars Between the States” where he documents the incentives being doled out to convince companies to move back and forth across the state border in the Kansas City metro area:

It would seem impossible for Midwestern states to get any sillier and more irrelevant, but they’re trying. In a time of continuing recession and joblessness, with crunching budget problems, failing schools, crumbling infrastructure and no real future in sight, these states have decided to solve their problems by stealing jobs from each other.

The most recent example is the so-called “border war” between Kansas and Missouri, as the two states compete to see how much money they can throw at businesses to move from one state to the other. The focus of this war is Kansas City — both the Kansas one and the Missouri one, basically a single urban area divided not only by an invisible line down the middle of a street but by a mindless hostility that keeps its two parts from working together.

Competition with “Europe, India, China and the rest of the world” has nothing to do with this juvenile job-raiding. In fact, this “border war” keeps Missouri and Kansas from competing globally — indeed, robs them of the tools they need to compete globally. Some rational thought shows why. It’s precisely these states’ inability to compete globally that causes them to declare war on the folks next door. In a global economy, Kansas and Missouri aren’t competing with each other, any more than Illinois, Indiana and Wisconsin are competing with each other. The real competition is 10,000 miles away and all Midwesterners know that we’re losing it.

3. Many state capitals are small, isolated, and cut off from knowledge about the global 21st century economy. In some states the state capital is a large city that is well-connected to the global economy – Atlanta, Indianapolis, St. Paul, and Nashville come to mind. But often state capitals were selected because they were in the geographic center of the state, not because they were major centers in their own right. Some, like Indianapolis, managed to grow into major cities. But many others did not. Think Springfield, Jefferson City, Frankfort, etc. This means that the state capital of many states is not very large, and often not very plugged into the global conversation. Longworth again captures the implications of this:

There is another reason why state governments are botching the economic needs of their states. Some 150 to 200 years ago, state capitals were picked not for economic reasons, but for geographic ones. Many of them remain in this isolated irrelevance today, far from the real action of any of the territories they are meant to govern…In this era of globalization, with overnight shipping and instant communications, this shouldn’t make any difference. In fact, it does. Global cities such as Chicago depend on face-to-face contact, and isolated state capitals live out of earshot of this conversation. The winds of globalization are transforming state economies and generating new thinking about state futures, but the news takes a long time to get to the state houses and legislatures.

4. Metro areas are the engines of the modern economy, but the rules for municipal and regional governance are set by states, and often in a manner that is directly contrary to urban interests. In this Longworth channels the Brookings Institution, which has tirelessly documented the importance of metro area economies to the nation as well as all the ways states, frequently controlled by non-urban legislators who are actively fearful of cities, have often imposed enormous burdens on those metro areas by tying them down with a morass of Lilliputian rules. Again Longworth:

States set the boundaries of urban jurisdictions and decide whether or how they can merge. They tell cities who they can tax and how, whether this helps cities or not. State governments help finance local infrastructure and dictate, from miles away, how that money is spent. State priorities on education and workforce programs leave city residents incompetent to deal with the global job market. Highway funds go to rural areas, not to cities that need them more; job creation money goes to wealthy areas, not to the core of battered cities.

Some urban regions have more or less given up any hope that their state will ever change or be a positive partner, such as Kansas City, as Longworth notes:

When the Greater Kansas City Community Foundation issued a report on the city’s future, it pretty much told the state to get out of the way. “Nations and states still matter,” it said. “They particularly can do their cities harm. But cities have to take the lead. San Diego did not become San Diego by looking to Sacramento, not Seattle to Olympia.” When the authors talked about Sacramento and Olympia, one felt their really meant Jefferson City.

I’d probably go even further than Longworth. I think that historically states imposed rules on cities deliberately designed to hobble their growth. For example, the laws that restricted branch banking in most states until recently had the effect of keeping big city banks from buying up rural and small town banks around the state. The end game of course is that when deregulation occurred, the banks in most big cities were so small because of these rules, they were easy prey to out of state acquirers. Thus most states saw basically their entire indigenous banking industry swallowed up.

Also, states seem to more or less treat their urban regions like ATM machines. Every study I’ve seen documents how, contrary to popular belief, cities actually are net exporters of tax dollars to their state government. Marion County, Indiana for example (Indianapolis), sends a net of about $400 million a year to the state – enough to cover the entire public safety budget of the city.

I actually don’t have a problem with some redistribution as cities are generally economic engines and more efficient to boot, so they should be expected to be donors at some level. On the other hand, when states proceed to starve those cities of the critical funds they need stay healthy and strip them of the powers they need to manage their own affairs, this is like sticking a knife in the golden goose.

Again I can use Indianapolis as an example. As part of a tax reform package the state took over all operating educational funding for K-12. So far so good. But they also imposed a funding formula that severely disadvantaged growing suburban districts by denying them equal per pupil funding. The net result was a major funding problem for the best suburban Indianapolis districts like Carmel, Fishers, etc. Many of these districts had to go to referendums to raise local taxes to make up the difference (which was no doubt the state’s plan all along – it simply outsourced the unpleasantries of a tax increase to localities). Here is a state that claims it wants to be in the biotech business, the high tech business, etc, yet it singles out the school districts where the labor force you are trying to attract for those industries is likely to live for outsized cuts. That hardly seems like a winning strategy.

It’s the same on transportation. The I-69/I-465 northeast corridor in Indianapolis is the most congested in the state, yet there’s no plan to deal with it. Despite a record construction program enabled by a great toll road lease, the state somehow still can’t find the money for this. In fact, a start at a fix that they did have in place was recently canceled. Similarly, the state planned to upgrade three sections of US 31 to a freeway, but the suburban Indianapolis section was put last and the vast bulk of that project is unfunded – despite it being the primary north-south corridor in what is by far Indiana’s fastest growing county. Where did all the toll road money go? In fairness, the state did step up and do a lot of Indy projects, but a disproportionte amount of cash has gone to a plethora of mega-projects to build four lane highways through rural areas, generally ones of dubious benefit/cost. (It’s a similar story in Ohio, where the state DOT postponed a reconstruction of the crumbling Cleveland Innerbelt while spending $150 million on a bypass around a town of 5,000 people, the state’s largest stimulus project).

Indiana also keeps its cities on a tight leash, with some of the weakest home rule powers around. Indianapolis basically can’t do much without legislative approval (a transit referendum, for example, will require specific legislative authorization). And the legislature seems to like it that way. Indiana’s property tax caps, which I support generally from a percentage of assessment perspective, include a lot of poorly advertised gotchas. For example, regardless of assessed value, the total tax levy can only grow at a rate equal to the average personal income growth over the last six years. I’ll caveat this by saying I haven’t studied this in detail and thus may be a bit off base, but the levy cap appears to be a de facto spending cap at current levels regardless in growth of tax base. This may be ok for some, but not others that are growing say their commercial office space base at a rapid clip and need to expand infrastructure and services to support it.

Clearly many of these policies have no real benefit to the Indianapolis region, which is more or less being asked to be the economic engine of the state and finance state government without being given the tools to do that job property.

The list goes on but that should give you a flavor. Similar things occur around the country.

To this list I’ll add one of my own, which has also been richly illustrated by Jim Russell. Namely,

5. States can’t to much to help, but they can do a lot to hurt. A lot of the national debate seems to center on whether the “red state” or “blue state” model makes the most sense. But to a great extent, policy almost doesn’t matter. In Ohio, with one set of state policies, Columbus thrives while Cleveland struggles. Tennessee is a right to work state with no income tax, but Nashville booms while Memphis stagnates. Texas is doing great with its red state model, but Mississippi and Alabama not so much. And even within Texas, there are plenty of places that are hurting badly.

While good policy can set the stage for growth, it can’t guarantee local economies will prosper. But bad policies can hurt regions that otherwise would thrive. Extremes of either the blue or red model seem to lead to problems. Witness California, for example, which seems to be holding up a sign to business saying, “Get lost.”

This puts states in the difficult position of being almost being able to aspire at best to being a neutral influence on their own economy. But it’s easy for them to screw things up.

Feel free to chime in with your ideas on why states either don’t matter or are actively harmful for economic growth in the current day. I’ll be back to give the other side of the argument in a few days. Stay tuned.

30 Comments
Topics: Economic Development, Globalization, Public Policy, Strategic Planning

30 Responses to “Are States an Anachronism?”

  1. Jonathan Assink says:

    Good read. Since it is unlikely states would ever split or shift borders to make more demographic sense, it seems like some sort of model where cities have increased autonomy over economic policy inside of a state (perhaps a special tax/economic zone, or something similar) would make sense. But much as the federal government is inherently loath to relinquish powers to state governments, state governments have no incentive to grant increased autonomy to cities.

  2. Tim says:

    Highly ironic you mentioned Texas. Because you could do a search and replace on this article and it would all still be the same for Texas. I think the reason that Texas is doing so well is that it has 5 Chicagos (Houston, Dallas, San Antonio, Austin, and El Paso), which is definitely an advantage in this day and age. I think Texas is succeeding because it has so many Urban powerhouses that the red state politics haven’t been able to stifle them. But they’re trying. Through every method you just outlined.

  3. Jon Hendricks says:

    Ok, for what it’s worth I’m going to point out that Longworth’s depiction of downstate and Southern Illinois is a stereotype which ignores much of the reality on the ground. I’ll take on Southern Illinois since it is the part of the state that I am most familiar. Politically, Southern Illinois votes similarly to the Chicago suburbs not Longworth’s stereotype of gun-rabid Republicans. Just check the NYT maps at http://elections.nytimes.com/2010/results/illinois. Also Williamson County elects Democrats to the state legislature. I happen to personally know someone who is a major figure in the Southern Illinois Democratic party, someone with the ear of Governor Quinn, and believe me this part of the state is not somehow cut off from Chicagoland or Springfield and dominated by Republicans. There seems to be a lot of patronage going on given the amount of road construction despite having a fraction the traffic of further north. And the corrupt political culture for which Chicago is notorious is also strong here. Many people see political activity as a means to personal enrichment and there is plenty of illegal activity. For example, there are/were illegal gambling operations going on at local clubs that everyone including the police knows about and does nothing to stop. I say “are/were” because, for those who don’t know, the Legislature recently passed a law enabling municipalities to legalize that very gambling.

    Longworth’s suggestion that Southern Illinois is practically a separate state from Chicagoland also ignores the myriad business and social ties of the region to further north. I can’t county how many neighbors, family, and family friends of mine travel to Chicago for business and family. It’s not uncommon for people to grow up in Southern Illinois, move to Chicago for their education and/or professional careers, and then retire back in Southern Illinois where the living is easy and cheap. And, with the only exception being the St. Louis Cardinals, Chicago sports culture dominates this region.

    In fact, when I first moved to Southern Illinois, one of the things that stood out is how well connected it is to the rest of the state compared to my hometown of Evansville, Indiana’s lack of connections to its state especially in light of the fact that Southern Illinois is physically further away from its state’s center (Chicago) than Evansville is from Indy.

  4. John S. says:

    Great post, Aaron. In Ohio, state boundaries have proven rather cumbersome for Metro Cincinnati’s movement towards a truly regional approach to governance because substantial portions of the region lie across the Ohio River in Northern Kentucky, as well as in SE Indiana. Arguably, state boundaries are also impeding the progression of regional efforts between Detroit and Toledo, as well as Cleveland and Pittsburgh, city-regions that in either case generally share more economic and cultural ties with each other over state lines than they do with other major city-regions within their respective states (e.g. Columbus). Even if their respective state legislatures and governors were more supportive of cities–something that couldn’t be any further from reality in Ohio with a state legislature and governorship tightly controlled by myopic rural and suburban-embracing Republicans–it would still take nothing short of a constitutional overhaul at the federal level that recognized metropolitan regions and granted them limited sovereignty for these city-regions to finally reemerge as legitimate global economic competitors. I actually could see us arriving at this point within a decade’s time, but I think it’s going to take quite a bit more economic dislocation in struggling city-regions and perhaps a generational shift in leadership for a more sensible approach to governance to emerge through political pressures.

  5. Greg says:

    States aren’t beneficial at this day in time. Buffalo sits on one edge of New York, while New York City sits at the opposite end. They are culturally, historically, and economically different beasts.

    New York City is so gravitating that the entire state is now a support structure for NYC. In the middle of this lie Buffalo, Rochester, and Syracuse.

    For example: The Buffalo-Niagara region is home to one of the nation’s largest hydroelectric power stations, but this power is sent to NYC. Profit (over 100 million last year) is lined up for mostly downstate businesses. So not only does a metro give a state its resources, but the state finds a way to twist the knife.

    article in the buffalo news today – http://www.buffalonews.com/city/article484549.ece

  6. John Morris says:

    What shocks me is just how deeply state lines have warped almost all our business and social relationships.

    For years, I have been trying to get together an online magazine connecting Pittsburgh and Ohio. All the funding and other mechanisms seem completely to run on separate tracks.

    Just for one state to acknowledge the existence of a nearby asset like a major university or The Cleveland Clinic is a major accomplishment.

  7. Andy says:

    Kudos to John S. for making the connection to the Toledo-Detroit region (I’d add Ann Arbor which is pulling in a ton of commuters from the Toledo area). I’m surprised how little inter-regional cooperation you see from these two metros. A lot of this is probably attributable to the lawmakers on these states, who don’t see how much commuting is happening over the Ohio-MI border from their offices in Lansing & Columbus.

    Then there’s the international border, which is another discussion entirely… suffice to say that I think metro Detroit gets shortchanged in comparisons to other regions its size because the bean counters don’t count the significant economic activity and population across the river in the Windsor area.

    I wish I could make the Longworth posts Aaron shares here required reading for state legislators and their staff.

  8. Matthew Hall says:

    Isn’t it interesting that a lot of the more successful cities are in the center of states or at least not too near state borders. Atlanta, columbus, Indianapolis, Minneapolis, nashville, raleigh-durham, austin, des moines, while border cities struggle like, St. louis, memphis, cincinnati, charlotte(if only recently). It isn’t perfectly true but as Longworth suggests, it may be one of several significant factors in metro success over the long haul.

  9. Matthew Hall says:

    To the extent that positive long-term economic and political relationships can be improved by positive long-term personal relationships, some border towns may be better suited than others. I often marvelled at how people from the Maryland burbs of D.C. rarely went to virginia and vice versa other than passing through on their way to more distant destinations. It was similiar in St. Louis. I knew locals who had never been to a destination on the other side and only crossed the border when driving on to some where outside of the region entirely. This contrasts with the cincinnati area i now live in where people cross between ohio and kentucky to live, work, shop and socialize without a second thought. They have close relationships on each side and almost seem to forget that they are in fact crossing between states. Given the opportunity, it still seems likely that some border metros might still do much more with regional economic and political structures than others.

  10. John Morris says:

    This may have some small truth however the reality is much more of a mixed bag. Charlotte is doing OK, NYC at a crossroads of state boarders is also. Portland is near the Washington border. Chicago also is near multiple state borders.

    A much bigger common link between many of the cities you mention, Memphis, St. Louis, Cincinnati, is a history tied to the transport of heavy goods along a river or lake (in the case of Cleveland and Buffalo), and often very heavy industry which are much less relevant in an era in which transport is more efficient.

    I do think, that state borders have worked to undermine the growth and potential of many urban areas.

  11. Aaron Smith says:

    very interesting. So many examples of state borders that seem economically irrelevant today. It seems like today the economic unit is different than the political unit. I would be very interested to see how MSA’s work together more effectively economically.

  12. MD comments says:

    I visited rural Ohio and Kentucky and the rural roads and interstates in rural areas were being paved with state distributed stimulus dollars. The formula must have been miles paved, not people served.

    Despite thousands of users on Baltimore city roads, we barely have enough money to patch potholes.

    If they were going to pave roads, the money should be spent where people live, but to the author’s point, state capitals usually have suburban/rural bent.

  13. Derek Rutherford says:

    There are some valid points here, but no one is proposing a realistic alternative. There has to be an intermediate administrative division between the continental-size US and individual cities, and states fit the bill well. Many of the states in this article (IL, OH) rival or exceed the population and wealth of distinct European countries (Austria, Portugal, Denmark, Sweden, etc.), so I don’t believe they are too small to be viable for the services they are expected to provide.

    And regarding the different interests of urban/suburban/rural, those are inevitable and cannot be “solved”. A proposed “solution” should be more than simply taking from rural/suburban and giving to urban interests. If certain states make dumb decisions (and I agree, some of the competitive incentives are foolish), that is a separate issue from the role of states.

    One element of dissatisfaction here may be that the state boundaries in the Midwest do not closely correspond to cultural divisions, whereas they do in places like TX, CA, UT, NM and much of the South and Northeast. But I don’t see an obvious way to improve that.

  14. John Morris says:

    “no one is proposing a realistic alternative.”

    The very realistic alternative is implied in the post. Political power on no level should be great enough to severely distort natural social and business relationships which is what is happening now.

    A first step is to admit that this is happening and try to build as much dialog and information flow across and between state lines.

    Another great step would be to develop a lot more online and other regional media.

  15. John Morris says:

    The issue is part of a much larger subject which is about the way political power has come to dominate life at all levels.

    It’s pretty clear that regardless of how we like it as political entities go broke, more rational non political forces like markets will play a much bigger role in funding infrastructure and more of these distortions will start to go away.

  16. John S. says:

    Derek,

    I don’t think anyone is arguing that states are too small to be viable for the services they are expected to provide. Rather, the concern is with states getting in the way of economic development and growth in metropolitan areas, particularly when a border shared by two or more states divides a metropolitan area. As the case of Kansas City and others cited above illustrate, state governments seem to be functionally incapable of recognizing and appreciating mutually beneficial economic associations and relationships that transcend their boundaries, opting instead to poach businesses and resources from each other. The latter approach is a zero-sum game that ultimately undermines the global economic competitiveness of all sides.

    Do we need an intermediate administrative division between the continental-size US and individual cities? Where this was a given in the world of the late 18th century in which horseback was the fastest form of travel and communication, I’m no longer certain that this assumption holds up in a 21st century characterized by Internet and mobile phone use for instant communication and the probable continuation of cars, planes and trains for travel in some form or another. The states were an administrative creation of and for an 18th century US that then wasn’t covered with sprawling interconnected metropolises, but virgin forests and rural plains that required days instead of hours to traverse.

    In two and a half centuries, the US has changed dramatically. I don’t think it is too much to expect government to reflect our postmodern times. Perhaps the proper 21st century form of states are in fact “metro-states” that more or less evolve from existing MSAs, many of which already include multiple states.

    What’s required here is a good bit of holistic perspective. Even in the urban/suburban/rural divide or the Republican/Democrat divide, there are more common interests than differences on all sides involved. For far too long, we have focused intensely upon on our differences. That approach might not end in the near future, but I don’t think it’s likely to yield anything different for us than the current “non-results” that it has produced up to this point.

  17. John Morris says:

    There is nothing “post modern” about this. State borders caused similar problems in the 19th Century too,
    however it did seem that at that time market forces held more sway. Part of this was just the weight of logistics since we had less capital to play with and distortions just cost too much.

    Carnegie’s empire was driven by very rational logistical concerns. Waste on this level was just not possible.

    Obviously, the main driver here isn’t just the states, but the whole sick pork driven way cash is diverted through Washington.

  18. John Morris says:

    I do think in general, the main solutions to this problem will start to come about as the state and federal cash machines get more shaky.

    A good example of this is the very recent trends to finance infrastructure through revenues from development. Likely any new major New Jersey to NYC rail links will have to be primarily funded this way. The end result will be growth that is much more synergistic with NYC.

  19. OhioDwight says:

    @ Urbanophile

    Urbanophile is my favorite urban blog. I like your thought processes and, on occasion, change my mind about how our cities can be better, based on your articulate positions.

    However, the following is not a fair statement: “It’s a similar story in Ohio, where the state DOT postponed a reconstruction of the crumbling Cleveland Innerbelt while spending $150 million on a bypass around a town of 5,000 people, the state’s largest stimulus project.”

    Your statement is misleading. ODOT did not postpone construction or shift funds from Cleveland’s innerbelt reconstruction in order to build the Nelsonville bypass.

    For decades Ohio’s US 33 corridor has been upgraded, section by section, to interstate standards. Yes, Nelsonville may be a city of only 5,000 people, but the bypass was shovel-ready (and planned years ahead) and was another segment in Ohio’s Indiana to West Virginia US 33 freeway: in part completing our highway transportation infrastructure from global city Chicago to U.S. southeastern coastal ports.

    Honda of America’s U.S. HQ is on US 33; Ohio’s state capital is on US 33; Ohio University is on US 33. This was hardly a bypass of funding for Cleveland’s innerbelt; which IS getting funded (80% U.S., 20% Ohio).

    I’ve driven on US 33 from Columbus south to the West Virginia border and beyond many times over the years. It’s a lovely drive. When the bypass was completed past Lancaster, it made the trip better. I’m looking forward to traveling on the Nelsonville bypass. It’s gorgeous country AND the freeway helps open a major part of Ohio that is underserved by our mostly outstanding highway system.

    ODOT definitely messes up on occasion. The Nelsonville bypass is not one of the messes and was a great use of one-time Federal stimulus funds.

    And this may not be fair of me, but: Ohio did not have to sell our jewel of a turnpike to get the Nelsonville bypass done or the Cleveland innerbelt reconstruction being funded.

  20. Chris Barnett says:

    Realistically, we aren’t ever going to erase state borders in the US. There might be more will to erase some smaller units of government within a state and to increase home rule.

    At the end of the day, the key is far less state-level control over municipal finances and the possibility for real home rule by large cities. Ultimately, what’s called for is agglomeration of existing metros into home-rule mega-counties that correspond to the metro area. (States that want to do so could even impose UGBs and try to forbid further exurban expansion into fertile farmland and small towns.)

    In states like Illinois and Minnesota where a single metro has the majority of seats in the legislature, this set of solutions might be feasible. In Ohio, where (unique in the midwest) there are a bunch of decent-sized metros spread across the state, there may also be enough legislative votes to get there. In Indiana…unless the citizens of Indianapolis somehow hold the state legislature hostage inside the Capitol, it’ll never happen. (Exactly one city in Indiana is prevented by state law from annexing/expanding its limits: the combined city-county government that is Indianapolis.)

  21. chris fyall says:

    Quite an interesting analysis. I enjoyed it.

    I think one trend in Indiana that is theoretically helpful for urban-like areas are tax-increment financing districts that allow a jurisdiction to capture and control some revenues derived from development within the jurisdiction.

    Perhaps aggressively enlarging these districts, and expanding allowable uses, would enable cities to have better self-determination.Could education be defined as infrastructure for a TIF? etc.

  22. Paul says:

    I will pick a beef with a comment about Indiana, particularly the deduction drawn from Indiana’s
    ” . . . largest city region [being] only about 25% of the state’s population, meaning Indiana is dominated by rural and small city constituencies.”

    The Indianapolis-Carmel MSA is 25.7% of the State’s population. The Indiana portion of the Chicago MSA is 10.8% of the State’s population. The metropolitan areas surrounding the State’s premier research universities, whose interests ought to differ from usual small city interests, are 5.6% of the State’s population. I suppose it is arguable whether Fort Wayne and South Bend are “small cities,” though I would argue that their educational, logistics and medical infrastructure distinguish them from places like Elkhart, Richmond or Terre Haute. Combining the Fort Wayne and South Bend MSA’s and you have another 10.4% of Indiana’s population. At this point urban/suburban areas add to 52.5% of the State’s population. This should be enough to shape state policy away from rural areas toward development of human capital consistent with moving up in the global economy.

    A closer depiction of the State is that when the Republicans control the executive and legislative branches of government a coalition of suburban Indianapolis and metropolitan Fort Wayne interests dominates State government. Consistent with this are present arrangements where the governor is from suburban Indianapolis. The Speaker of the House is from suburban Indianapolis and the Senate President pro tem of the Senate is from Fort Wayne.
    The primary constituencies being served are the suburban elites of Indianapolis and, to a lesser extent, Fort Wayne. The politically active members of this elite are frequently tied to real estate development and highway contracting. Development to these groups is always “physical” and it is focused on suburban areas where the most leverage can be gained from real estate and highway development. How the money gained from Major Moves went (Hamilton County was a huge target)was largely consistent with this view.

    If Indianapolis has a political problem with the state not shaping policies to its advantage I’d suggest its complaint is more with the state Chamber of Commerce and its own elite than with rural areas and small towns. It has been a myth, perhaps one that the state “cultivates, but a myth none the less that Indiana is dominated by its rural areas and small towns.

  23. Jon Hendricks says:

    @Paul,
    Add Evansville (which is larger in both city and metro than South Bend though it resides in the 7th most populous county coming in after Elkhart) and the Louisville suburbs to that urban/suburban count and you get an even stronger urban/suburban constituency. Notably, though, Bloomington doesn’t always act like a mature urban political community as for example their continued I-69 obstructionism. Otherwise, great point about the myth of rural/small town Indiana. Sure, Indiana may seem more rural when compared to Chicagoland or Ohio, but compared to truly rural states like Nebraska or Montana, not so much.

  24. Paul says:

    Jon,

    I saw that the Evansville MSA population was somewhat larger than the South Bend MSA population, but thought that the research orientation of Notre Dame along with the South Bend’s physical proximity to and transportation infrastructure (for example the South Shore Line) linking it with Chicago would orient South Bend’s interests more strongly toward an urban outlook. I believe Evansville’s MSA covers several counties while the Indiana portion of South Bend’s MSA is just St. Joseph County.

  25. Chris Barnett says:

    @Paul, the issue in Indiana is that the suburbs don’t typically align with the cities that they surround. The interests (and parties) typically line up suburbs + exurbs + rural areas vs. Indianapolis + Gary (+South Bend and Evansville, sometimes). The rural conservative Democrats south of US40 don’t typically have much in common with the urban Democrats. But the Bloomington D’s do typically line up with the other urban D’s.

  26. Chris Barnett says:

    Keep in mind Aaron’s migration data: Indianapolis metro grows at the expense of small towns and countryside. Many of those folks live in the ‘burbs after college at one of our fine state institutions. Their mindset isn’t urban.

  27. Anonymous says:

    Chris,

    Aaron asserted, in essence, that the Indianapolis metro area didn’t have the influence on state policy it needed because a coalition of rural areas and “small cities” had dominant influence over State policy. I answered that the usual power coalition was centered on the Indianapolis suburbs and Fort Wayne area (to quote myself exactly “The primary constituencies being served are the suburban elites of Indianapolis and, to a lesser extent, Fort Wayne” and suggested Indianapolis’s problem was with its own suburbs and suburban elites rather than primarily with small cities and rural areas. But you seem to suggest that I have it wrong because “the issue in Indiana is that the suburbs don’t typically align with the cities that they surround.” Am I missing something here because it sounds like we are saying rather similar things.

  28. John Morris says:

    I don’t have any overwhelming solution to these problems, but as I said a big factor in most acses will just be a lower role of states as the financial crunch develops.

    One interesting role will be if the large central mega cities like New York, Chicago, Philly and D.C. will play a larger role as strong advocates and partners in transit oriented projects that cross state lines.

    New York-for example as a city that does not need or want more car traffic has a huge incentive to work with others to improve and create new commuter links. This sounds the same with Chicago.

    In most cases-the tuely urban cities have a huge need to work together.

  29. Chris Barnett says:

    I don’t agree that “the primary constituencies being served” are the Indianapolis suburbs. They must resort to doing anti-urban deals with the exurban and rural legislators, often at Indianapolis’ expense. The balance of power isn’t in the Indy and Fort Wayne ‘burbs, it’s where Aaron said it is in the rural and small-city areas.

    For example, the IndyConnect transit-saving proposal needs state legislative action to allow for a special dedicated local or regional transit tax. The loudest voice against it in the 2011 legislative session came from a small-town committee chair, and the supposed Republican “powers” from suburban Indy (who should have supported a Republican Mayor of Indianapolis in building a regional transit system that would also help the ‘burbs) didn’t and wouldn’t yank his chain.

    When I say “exurban” I mean the small cities that are county seats and college towns two and three rings out from Indy that are now within commuting range of Indianapolis’ far suburbs. (Specifically: Greensburg, Columbus, New Castle, Bloomington, Spencer, Greencastle, Rushville, Connersville, Lafayette/W.Laf., Frankfort, Tipton, Kokomo, Elwood, Muncie, and even Anderson.) Elected leaders there tend to believe that they are in competition with the Indy metro for economic development that brings promised “good pay and benefits”.

    Dominant state capital regions like Indianapolis are net donors to the state, yet the rest of the state treats us as if we’re leeching off them.

    The last published stat for Center Township (core of “Old Indianapolis”) had somewhere between 40-50% of land off the property tax rolls, much of which was state-level non-profit, state government, state institutions, etc. My property and income taxes have to make up for that so they have nice wide arterials for their commutes into Indy.

  30. William says:

    “It was similiar in St. Louis. I knew locals who had never been to a destination on the other side and only crossed the border when driving on to some where outside of the region entirely. This contrasts with the cincinnati area i now live in where people cross between ohio and kentucky to live, work, shop and socialize without a second thought.”

    I think in this case, it can be easily explained in that the kentucky side of the cincy metro has developed into a regional nightlife/urban draw and the area around east st. louis, il has “stepped down” in that respect – except for the “ballet.” In addition, the major airport is in Kentucky. I’ve heard the old “jokes” about not having any reason to go to Kentucky from Cincy, too.

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