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January 11th, 2012
The Right to Work law debate is in the national news — Republican presidential frontrunner Mitt Romney insists it would be good for the country — and it’s a big topic right here in the Great Lakes, too.
Right to Work laws mean employees can’t be required to pay union dues, even if a union is formed in their workplace. There are 22 states around the country with Right to Work laws, many in the South, but there are none in the Great Lakes states, which have long been union strong holds.
On Tuesday, the governors in Michigan and Indiana, who’ve faced off in the past, weighed in on the subject with sharply differing views. Michigan’s Republican governor, Rick Snyder, said passing a Right to Work law is not a priority for him this year, even though some lawmakers say they plan to push for it.
Rick Pluta, at our partner station Michigan Radio, reports Snyder says a Right to Work debate would distract the state from the repair work it needs to do on the economy.
“…to get into a very divisive debate like that, you create an environment where not much gets done and I would point to Wisconsin, I’d point to Ohio. If you look at Indiana, that’s kind of consuming all the dialogue in that state,” Snyder said at the North American International Auto Show in Detroit.
In Indiana, Democratic lawmakers have refused to let the legislature consider the Right to Work law that Republican Gov. Mitch Daniels proposed last month.
Daniels previously had resisted the same efforts Snyder faces. But in his state of the state address, Daniels said,
“Everyone knows that, among the minority favoring the status quo, passion on this issue is strong, and I respect that. I did not come lightly, or quickly, to the stance I take now. If this proposal limited in any way the right to organize, I would not support it. But we just cannot go on missing out on the middle class jobs our state needs, just because of this one issue.”
Daniels faced protestors during his speech, who shouted, “kill the bill” and marched outside the state capitol rotunda.
Where do you stand on Right to Work? Do our Great Lakes states need it to be competitive?
On Saturday, Gary, Indiana officially swears in its new mayor, Karen Freeman-Wilson. She’s actually been on the job since last weekend, though, with a long agenda of big and small goals.
Freeman-Wilson is the first African-American woman mayor in Indiana, where she served as the state’s attorney general. She’s a Gary-raised, Harvard-educated lawyer who has worked in Washington, but feels an obligation to her hometown.
“I know about the good things and the good places. It’s irresponsible to know about the good, to know about the potential, and not do anything about it,” Freeman-Wilson says.
I talked to Freeman-Wilson for this profile in The Atlantic Cities. She also spoke with our partner station WBEZ late last year about the challenges that she’ll face, namely a high crime rate, shrinking population, and citizens who feel they face obstacles in getting what they need.
On a grander scale, she wants to increase service at Gary’s under-served airport, which sits adjacent to Interstate 90; land a major hotel for downtown and spur broader economic development activities.
Freeman-Wilson has collected a series of advisers ranging from Newark’s former business administrator, Bo Kemp, who headed her transition team, to Ronald S. Sullivan, Jr., a Gary native who is now a law professor at Harvard.
Freeman-Wilson says she’s going to hunker down for the next few months to focus on her new job. But if she sees any success at all, she’s likely to become a visible player on the political scene. One of her mentors is Newark’s mayor, Cory Booker, who faced a Gary-like situation when he took office a few years ago.
The new Gary mayor says her Newark counterpart told her, “You really have to understand the difference between campaigning and governing. You have to understand your constituency and communicate with them.”
At least Gary residents know she understands their city. Along with her new job, her biggest priorities are her ailing mother, who lives with her family, and helping her 17-year-old daughter Jordan choose a college (finalists on her list include Columbia University, Howard, and Emory).
January 6th, 2012
It’s been a tumultuous year in many of the Great Lakes states.
New Republican governors in Wisconsin, Michigan and Ohio have pushed for legal and policy changes. Illinois has faced a fiscal crisis. And Indiana’s governor is now backing a Right to Work law.
We know what the political debate has been like. But we’d like to know how the changes are affecting you. What did state government do that mattered to you?
Let us know, and then check in as Changing Gears covers how these leaders are changing the way things are in our states.
Last month, Indiana’s Republican Gov. Mitch Daniels finally put his weight behind years-long effort to pass a Right to Work law in Indiana. He is making it a priority in the new legislative session in Indianapolis, and is facing immediate opposition from Indiana Democrats.
Democrats stalled business on Wednesday, the first day of the 2012 session, when they did not report to the House floor, according to the Associated Press. They continued to block action Thursday on a bill that would make Indiana the first state in a decade to enact a Right-to-Work law.
The laws bar private sector unions from automatically collecting dues from employees that do not join organized labor groups. None of the Great Lakes states, long union strongholds, have Right-to-Work laws. Some economic development proponents say Midwestern states need them to compete with the Right-to-Work friendly South.
The Indiana Democrats aren’t getting off easy: last year, Indiana lawmakers enacted a $1,000 a day fine for not showing up. The fines could take effect today.
Meanwhile, protestors are beginning to gather at the state capitol in Indianapolis, much as they did in Wisconsin and Ohio last year when governors sought to strip state employees of collective bargaining rights.
Michael Puente at our partner WBEZ reported this week on what’s at stake in Indiana.
December 16th, 2011
For years, Indiana’s Republican governor, Mitch Daniels, has resisted efforts by fellow Republican lawmakers to implement Right to Work legislation. But now, Daniels is making a Right to Work law one of his legislative priorities for 2012.
Right to Work laws mean employees do not have to join a union, if it is formed in their workplace, nor do they have to pay union dues. (To see Right to Work states, click here.)
Under “closed shop” laws in effect in Michigan, and other northern states, employees must either join a union when one is certified, or pay dues. Some people say that forces them to become union members against their will, since they must pay dues anyway.
Daniels, in a presentation Thursday laying out his goals for the new year, said Indiana needs the law because he believes it will lead to increased job opportunities. Daniels said the nation’s 22 Right to Work states enjoy faster job and income growth, and have lower unemployment rates.
“After a year of study and reflection, I have come to agree that it is time for Indiana to join the 22 states which have enacted right to work laws,” Daniels said in a statement Thursday.
But a poll by Ball State University shows state residents haven’t made up their minds. About half said they were undecided, 27 percent supported the idea and 24 percent opposed it, according to Bloomberg.
Indiana, which has aggressively sought economic development, has a record of leading other Midwest states on job-related issues. The state eliminated collective bargaining for state employees six years ago, well before the furor that surrounded similar moves in Ohio and Wisconsin.
Daniels’ call for a Right to Work law in Indiana could fuel tepid moves in other Midwest states. Organizers have begun the ground work in Michigan in hopes of winning approval there, although Right to Work has not been a priority for its Republican governor, Rick Snyder. Our Kate Davidson took a look at the Michigan effort in March.
Daniels, in his presentation, said workers’ right to organize would remain unchanged, but workers would have the ability to decide whether to pay union dues. Union organizers say it depletes their influence in the workplace if workers do not have to contribute.
Should Indiana and other Midwest states implement Right to Work laws? How have they worked in your state?
December 14th, 2011
The incentives war between the Midwestern states has heated up over the past few months, especially between Illinois, Indiana and Ohio, which, are fighting over Sears and the CME Group. Here is a look at how states use incentives to keep or steal companies, and how that effects overall economic development.
Remember the ending? (No? Keep reading.) The movie’s star, Matthew Broderick, wants to show Joshua, the computer, that there’s no way to win a zero-sum game. He gets the computer to play itself, first Tic Tac Toe, then a simulation of a nuclear war between the then-Soviet Union and the United States. In the end, Joshua realizes no one can win.
Keep game theory in mind, because we’ll come back to it later. But that’s kind of what’s happening between Illinois, Ohio and Indiana. These states have spent the past few months waging an economic incentives war worth millions of dollars and thousands of jobs.
The most recent round ended yesterday, when the Illinois Senate approved more than $200 million in tax breaks – specifically designed to keep Sears and the Chicago Mercantile Exchange from leaving Illinois.
The CME Group owns the Chicago Board of Trade, the Chicago Mercantile Exchange, as well as the Chicago Board Options Exchange.
Last week, at a news conference with Gov. Pat Quinn and Senate President John Cullerton, Chicago Mayor Rahm Emanuel echoed their sentiments that much is at stake.
“Chicago Mercantile Exchange allows Chicago and the state of Illinois to be a leader in the futures and risk management industry,” said Emanuel.
Indiana offered CME a reported $100 million to leave Illinois. Ohio offered four times as much to try to lure Sears.
But it doesn’t just happen with big companies. Indiana’s Economic Development Corporation earlier this year spent $50,000 on ads asking lllinois businesses if they were “Illinoyed” by the state’s taxes.
States find themselves over a barrel when officials feel the need to offer millions to lure and retain companies.
That’s a mistake, said Jennifer Bradley, a fellow with The Brookings Institution’s Metropolitan Policy Program.
Bradley said that in the case of incentives, governors and public officials face a classic “prisoner’s dilemma”.
“Governors would probably all be better off, or state economic development authorities would probably all be better off, if nobody got into these kinds of bidding wars,” she said.
In Illinois, the current tax package for Sears was set to expire. The legislation has extended those credits for 10 years for one set of credits, as well as 15 years for a special taxing district in regards to property taxes.
But Bradley says the effort to win jobs from other states may be misguided. She says most research indicates that 95 percent of a state’s typical job growth comes from existing or new businesses.
And here we’re back to the prisoner’s dilemma: with the current game of incentives, though, no one wants to budge.
“If you can’t count on everybody to do the right thing, then nobody’s going to do the right thing,” she said. “So companies have incentives to ask and individual states have incentives, temporarily, to make the offer.”
But some states are playing differently. Michigan is trying something that might break the Midwest out of this prisoner’s dilemma. In his first State of the State speech in January, Gov. Rick Syner rejected the “up the ante” mindset.
“We need to put more emphasis on economic gardening as opposed to hunting,” he said to much applause. “For those unfamiliar with economic gardening, it means we’ll focus first and foremost on building businesses that are already in the state.”
Since that address, Michigan has eliminated almost all of its tax credit incentives – including its much publicized film incentives.
“We’re really trying to provide key access to tools that will help a business’s customer base grow as opposed to just providing them money and hoping that they will be able to grow their business,” said Michael Finney, president of the Michigan Economic Development Corp.
For Finney, that means the focus is more on providing help with accessing export markets, debt financing, and the like. He hopes this approach will also make it easier for the Midwest to work together.
“I happen to think if we worked together as a Midwestern region we’d be much more successful,” he said.
It’s not unprecedented for states within a region to cooperate. Take the South.
“Our former director used the term ‘coop-er-tition’,” said Kathy Geltson, Deputy Director of the Mississippi Development Authority. “We cooperate in instances where it makes sense, but there are instances when it’s a true competition.”
She’s talking about several specific alliances Mississippi and several southern states have formed for industries like the automotive or aerospace center. There, the states work together to bring companies to the region, and don’t try to compete, at least in this case, with incentives.
For Michigan, cutting those hundreds of millions of dollars out was a necessity given its fiscal state. But it works – if Michigan can show that this new strategy will still lead to comparable job growth –maybe other Midwestern states will start to follow suit.
What do you think about incentives? Should it be every state for itself? Or would the region be better served following other models?
And because I can’t resist, in case you’re nostaglic: that final scene from War Games:
Pete Bigelow · Midwest Memo: Chicago Mayor Unveils Microlending Plan, Auto Dealerships Renovate, Indiana Finds Extra $320 Million
December 7th, 2011
Three stories making news across the Midwest today:
1. Chicago unveils microlending program. Chicago Mayor Rahm Emanuel unveiled a plan Tuesday to create a new organization that helps the city’s small businesses. The Chicago Microlending Institute would train potential lenders on advising and giving loans to people starting small businesses, and would be funded by a $1 million loan pool funded by the city. Our partner station WBEZ says the proposed institute would be run by ACCION Chicago, an area small business lender. Emanuel said small businesses sometimes struggle to get loans from traditional institutions. “That’s the hardest first step,” Emanuel tells WBEZ. “That’s the hardest loan. You don’t have a proven model. You don’t have a proven record.”
2. Auto dealerships undergo facelifts. Three auto dealerships in the Milwaukee area are joining a growing national trend of expanding or renovating their facilities. Jim Tolkan, president of the Automobile Dealers Association of Mega Milwaukee, tells the Milwaukee Journal Sentinel that auto manufacturers are requiring dealerships to remodel in order to meet “a look that is easily recognizable regardless of where you are in the country.” Others are unconvinced that dealers will recoup expensive outlays. “That is the unknown question,” Tolkan tells the newspaper. The National Automobile Dealers Association is expected to issue a report on the subject later this year.
3. Whoops! Indiana finds leftover $320 million. Indiana officials discovered Tuesday the state had $320 million more than anticipated in its main account. Gov. Mitch Daniels said the windfall came as a result of a multi-year programming error that was only recently caught by a stunned employee. Democrats aren’t necessarily buying the explanation after watching Republicans cut public education funding by $300 million at the end of 2009, according to the Indianapolis Star. “This wasn’t just an accounting error,” Senate Minority Leader Vi Simpson told the newspaper. “Children got hurt by this, families have suffered.”
December 1st, 2011
All across the Midwest, cities and suburbs are tackling the problem of Empty Places. Throughout November, Changing Gears took a look at some of the challenges and solutions involved in transforming property from the past.
In Flint, Mich., Kate Davidson found there may be no better example of how the industrial Midwest is changing than the site of the old Fisher Body Plant No. 1. It’s one of the factories that was occupied by sit-down strikers in the 1930s. The plant made tanks during World War II. It was later closed, gutted and reborn as a GM design center. But GM abandoned the site after bankruptcy and the new occupants don’t make cars. They sell very expensive prescription drugs.
In suburban Chicago, Tony Arnold reported that as companies adjust to economic conditions, many in the region have been re-evaluating the basics – including where they’re located. Cities and states bend over backwards to create jobs, and they’re left with some big challenges when a company decides it no longer wants its headquarters there.
For many people, the most threatening emptiness isn’t a shuttered factory. It’s the abandoned property next door. But in Detroit, some residents are using that emptiness to quietly reshape their neighborhoods. They’re annexing vacant lots around them, buying them when they can or just putting up a fence. They’re not squatters, says Davidson, they’re blotters.
There are vacant factories all over the Midwest. But where some people see blight, others see opportunity. One example: a former Chicago meatpacking plant has been transformed into a vertical farm, as Niala Boodhoo discovered.
Barry Van Dyke and his two siblings told us their story of turning Jack’s Liquor Store in Grand Rapids, Mich., into a brewery. As he said to Sarah Alvarez, “Over the last three or four years there has been a huge boom of people re-occupying buildings and putting work into them. It’s great to be a part of that in Grand Rapids. I think the general public sees that, and they are just bending over backwards to be supportive.”
But there’s plenty more work to be done across the Midwest. In fact, there are 3,000 empty buildings alone in Northwest Indiana. Take a look at the work that’s going on there.
Any thoughts on our Empty Places series? Let us know if you’re working to transform an abandoned place in our region.
Pete Bigelow · Midwest Memo: Indiana Republicans Will Introduce Right-To-Work Legislation, Wisconsin And Ohio Add Jobs
November 22nd, 2011
Three stories making news across the Midwest today:
1. Wisconsin shipbuilder adds jobs. A northeast Wisconsin shipbuilder plans to double its workforce over the next 18 months after winning a contract with the U.S. Navy, according to our partner station WBEZ. Marinette Marine, located on the shores of Lake Michigan, will add 1,100 more employees as it builds 10 new ships under a contract for approximately $4 billion. “Seven hundred of those are hourly wage earners,” says company president Charles Goddard. “They’re union employees. They’re steel-fitters. They’re welders, pipe-fitters, electricians, they’re painters.” The ships, called Littoral Combat Ships, mark a new direction for the Navy toward smaller vessels able to navigate in shallow water.
2. Indiana will consider right-to-work law. State Republican leaders will attempt to turn Indiana into a right-to-work state during the upcoming legislative session. “I do expect an intense debate,” GOP House Speaker Brian Bosma told our partner station WBEZ. Republicans say the legislation would set Indiana on more competitive footing in enticing businesses to relocate. Such right-to-work legislation would end requirements that force workers to join unions or pay dues as a condition of employment, according to the station. Democrats fought similar legislation during the last legislative session, and dispute that there would be economic benefits. “House minority leader Patrick Bauer said, “This could be the eventual decline and fall of Indiana being an economic, viable state.”
3. Kasich touts Ohio job gains. In the past week, Gov. John Kasich has announced the arrival of more than 1,700 new jobs at three locations across Ohio. On Monday, he was on hand as material-handler Intelligrated announced it would add 200 technical and engineering jobs over three years in suburban Cincinnati. It was the third such announcement Kasich had attended this week, seemingly marking a shift in his strategy since SB5 was repealed by voters, says The Columbus Dispatch. “What that illustrates is that we’re starting to get our act together in the state of Ohio,” Kasich told the newspaper. “We’ve got a long way to go, but we’re answering the bell.”
November 21st, 2011
The Midwest has the highest concentration of homegrown residents of any region in the country.
That’s good and bad news, according to analysts. The distinction could mean the Midwest has done the best job retaining strong community ties with native residents. It can also mean the area, overall, has struggled to lure employees from other states.
William Frey, a Brookings Institution demographer, tells Governing, which compiled state-by-state data on residents living in the state of their births, that “you have a very rooted population in some of the Midwestern middle of the country,” while the western U.S. is “still filling in.”
Louisiana ranked highest in the data with an overall homegrown population of 78.8 percent, but Midwestern states took the next four spots: Michigan (76.6 percent), Ohio (75.1 percent), Pennsylvania (74.0 percent) and Wisconsin (72.1 percent).
Looking at the homegrown population ages 25 and up, the results are similar. The top five are: Louisiana (75.0 percent), Michigan (71.9 percent), Pennsylvania (71.4), West Virginia (70.7) and Ohio (70.2).
Nationwide, slightly less than half residents age 25 and above live in the state of their birth, according to Governing.
Across the Midwest, the six states of Wisconsin, Illinois, Michigan, Indiana, Ohio and Minnesota averaged 71.3 percent of homegrown residents. The Deep South ranked second, with the five states of Louisiana, Mississippi, Alabama, Georgia and South Carolina averaging 66.9 percent.
Here are state-specific results across for homegrown populations across the Midwest:
Michigan 76.6 percent
Ohio 75.1 percent
Wisconsin 72.1 percent
Minnesota 68.8 percent
Indiana 68.3 percent
Illinois 67.1 percent
Midwest percentage homegrown, age 25 and above
Michigan 71.9 percent
Ohio 70.2 percent
Wisconsin 68.4 percent
Minnesota 63.8 percent
Indiana 63.2 percent
Illinois 59.3 percent
Curious about the rest of the country? Here’s an interactive map at Governing that has state-by-state data.