Business

Economy Is Elephant In The Room

Spring is here, the legislature has mercifully left town, there is extra snow at the ski resorts, the Pope has the lowest approval rating in the history of the Catholic Church, Obama has signed a health care law, but the BIG ELEPHANT in the room remains the economy.

A one-tenth percent decline in unemployment rates a headline, extended ski season for a few days is “good for the economy” and we are all concerned about rising gas prices and how to meet the mortgage payments. Meanwhile local government keeps purring along trying to create “economic development” by paying businesses to locate in their respective towns.

We got word from Minneapolis that all are not happy about spending public funds for a baseball park–a message both Boise and Meridian need to examine closely as they begin to compete for the minor league Boise Hawks venue.
Here is the MINNEAPOLIS STORY from the Star Tribune.

Reader Steve Edgar recently offered a well researched lengthy comment about unemployment and home foreclosures on the Micron profit posting “TWO QUARTERS DOES NOT A SUCCESS MAKE.” We would be happy to offer space to anyone who can make sense out of just how much a few inches of snow REALLY mean to the economy.

Comments & Discussion

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  1. If you think I-84 is bad at rush hour, you should of seen Bogus Road on Sat. morning. Looked like an elephant train all the way up the hill. Many of the cars with single occupants. The gas stations probably benefited more than anyone else.

  2. If the ski hills stay open then. 1) People that work at them will keep their jobs for several more weeks. 2)Gas stations benefit from the sale of the gas that will be used to get to the hill. 3)In the case of Brundage staying open, McCall will see revenue from lodging and food.

    I guess my point is that every little bit counts. Instead of everyone being so negative, how about some suggestions on how we can strengthen the economy in this area. I think that attracting new business into the area is a great idea. New business that have nothing to do with home building are what Idaho needs to look at to help improve our economy.

    EDITOR NOTE–Hey 101, we are looking for answers from anyone. If we attract a business from California or Oregon, it just shifts the economic problem to those states. We don’t like the “economic civil war” concept of cities and states competing to see who can give away the most.

  3. Seems the elephant is drinking less water, yet being charged more — another sign of the times. See interesting article in DAILY about water rate increases in a down economy:

    http://www.idahostatesman.com/2010/04/04/1141093/water-bills-go-up-in-down-economy.html#storylink=omni_popular

    I would like to see the article localized for Idaho. Meridian’s water/sewer rates recently increased, further burdening unemployed and cash-strapped city residents to cover costs of new developments. As I have pointed out before, the city is not collecting development fees that would help pay the way for new construction. Sen. Shirley McKague calls development fees “hidden taxes;” I say so are rate hikes. I believe the BOCC is currently addressing the development fee question. I’d be interested in learning the board’s decision on this issue.

  4. I would imagine most city and county development staffs don’t have much to do these days. Despite the lack of work they continue at full employment.

    Cities and counties are loath the decision to cut employees. The have to money to fully fund employment so all the cuts in tax revenue translate to increases in “user fee” increases to keep city budgets afloat at the expense of just about everyone.

  5. Dean Gunderson
    Apr 5, 2010, 5:06 pm

    Paul,

    Ada County’s Development Services staff was reduced by 59% from its 2008 staff level — a reduction of 26 full time employees. The department’s Director now splits his time between the directorship of two separate departments at the county — Development Services and Indigent Services.

    I can’t speak for municipal departments, but I imagine they’ve seen a similar reduction in staff — on the planning & zoning side.

    It’s hard for a community to cut building department staff, since the permit revenue from the building division (especially in smaller communities) composes a large part of a city’s revenue projections. This is not so much a wise practice, as it is a common practice.

    Conversely, Planning & Zoning fees(i.e., Development Fees) rarily, if ever, cover the costs to process the development applications. This is why you tend to see large reductions in P&Z staff during economic downturns, while building department staff (plans examiners and building inspectors) are usually more protected.

  6. Ever smell an elephant? That is what this economy smells like.

  7. Casual Observer
    Apr 5, 2010, 6:36 pm

    There must be something in the water at City and County offices. Mayors and Councilmen come from many walks of life but it is somewhat rare for them to be successful developers. Successful developers are too busy making money to lower themselves to public office. However, the first thing many elected officials do after taking office is tap the local tax base to fund one cockamamie get rich scheme after another. It would be much nicer if they would just stick to fixing the roads and bridges.

  8. The goose the lays the golden eggs was cooked some time ago (Core manufacturing and natural resources). We’ve just been handing that old money around the circle for over a decade in the US, with very little new money coming in and a whole bunch going out. It’s been a boondoggle for the governments because they take a chunk every time it changes hands, thus they have grown and the people have shrunk. I see the new bridge plaque honors the tax collectors and not the tax payers. Funny how so many super smart people seem to miss that simple detail.

    Even though government has the laws and the guns to take our money away, the goose is cooked and mostly gone. Those of you in government will see many more pink slips and smaller checks and older pick-ups and squeaky old office chairs and old slow computers and most importantly, efficiency and accountability.

    Then with that monkey off our back, we can start to rebuild an economy again based of stuff that brings money in or generates it, rather than just counting and taxing the same dollar each time it comes around the circle.

    Still a whole bunch of heads in rectums however, they think taking my money away and then giving some of it back is call a stimulus. So it will be several more years yet before a true recovery takes place.

  9. I agree CO, I’m sure Joe the Plumber would have stuck to plumbing if he became a politician. He had values.

  10. Developers come to town for one reason and one reason only. Profit and as much as they can for as little expense as possible. It is incumbent upon elected and appointed officials not get caught up in “increasing the tax base” v having growth pay for itself.

    Developers expect “entitlement money” from cities to underwrite their projects. Entitlement money is another word for a FREEBIE courtesy of taxpayers.

    I welcome developers who want to pay their way and be a good civic partner, others please go somewhere else.

  11. I tend to agree with Zippo, and don’t have much confidence.

    The Boise elephant is Dumbo the baby elephant. The BIG elephant in the room may not even be the “federal” elephant but rather the world elephant.

    Even in countries that still make stuff – like China – they are following the lead of our “elected representatives” (I use the phrase very loosely), and are pouring billions of nonexistent “stimulus dollars” into the black hole. The resultant “economic recovery” is as bogus as that shiny stuff our ski mountain was named after. I’m worried that it’s just a matter of time before the other shoe drops, and even the people who have money will wake up and discover their money no longer has value.

    But I’m no economist, and I pray that I’m wrong.

    (I’m sure grateful that the state Constitution, and local laws, require the books to be balanced. Even though we have clueless weasels who try to get around those pesky rules at every turn. After all, the taxpayers are the goose that keeps laying golden eggs.)

  12. Agree with Zippo that much of the economic boom in America has been natural resource based. As we have shifted our economy from product to service we have to find new “natural” resources. The new natural resource will be innovation and creativity. (One could argue that has always been the case of American Ingenuity, but the point I wish to make is innovation no longer plays back seat to natural resources) In this new economy we should welcome, incentivize and even aggressively compete to attract companies that will bring jobs indicative of the new economy such as R&D, Technology, Bio-medical, etc. Should we roll out the red carpet for the developer who wants to build 1,000 stick frame disasters on prime farm land or another big box store to sell tainted goods from China?…. No, let’s be selective and recruit sustainable economic development.

  13. Dean Gunderson
    Apr 7, 2010, 5:43 pm

    Everyone (citizens and politicans alike) needs to think in generational terms — and stop thinking that somebody else is going to come along and inject money into our local economy.

    This means investing in EDUCATION, to ensure that our kids will have every opportunity to capitalize on their native intelligence. Grow local businesses from the ground up by building the best and brightest workforce & company owners in the country.

    Public education, kindergarten through university, is the single best investment of meager tax revenues — it’s actually the only expenditure that gives back to the community in the form of higher wage earnings and more successful businesses.

  14. Mr Gunderson, I admire your commitment to public service. Are you aware of the top three failures in our educational system as identified by the NEA?
    #1 Lack of respect for teachers by students
    #2 Lack of control in the classroom.
    #3- Lack of parental involvement in their childs educational experience.
    None of these problems cost one penny to fix!
    We must quit hoping that if we just throw more money at the schools, they will be better.
    #1 solution to this problem is to restore teacher control in the class and make schools immune from frivolous law suits by parents.
    #2 Remove the tenure system once and for all.
    #3 Pay the good teachers what they deserve, which is substantially more than they currently make.
    I agree totally that forcing teachers to buy their own supplies is ludicrous. However, the top heavy salaries at the district level, as well as the insane number of independant districts we have in Idaho has to be changed!

  15. Dean Gunderson
    Apr 9, 2010, 9:34 am

    Unfortunately,

    The biggest problem with public education is the physical form of the current school distribution. Put simply, it is the disappearance of the neighborhood school.

    It is extremely difficult for parents to be involved in their children’s education when both parents need to work — and when the schools are no where near within walking distance of the student’s homes.

    These two phenomena, so often overlooked in school district planning, are intrinsically linked. They combine to make life in a community much more expensive than it needs to be.

    School district administration pay only appears excessive, when compared to the disproportionately low pay of the actual teachers. When these salaries are compared to peer positions in other fields (with similar budget and HR responsibilities) they are actually on the low-side.

    What’s the solution? Actually start building & staffing neighborhood schools that kids can walk to. Let parents actually have an opportunity to cut their work hours, so they can be more involved in their childrens’ education.

    In public planning circles there is far too much emphasis on trying to forge a Jobs/Housing balance in order to reduce commute lengths. But, trips to & from schools (by parents who are forced to drive their kids around to these basic needs) account for far more trips on the public roads than trips to work.

    If public schools were better funded, and better planned to ensure walkability, trips during morning rush hour could be reduced by far more than any other means.

    The center of every walkable neighborhood should be a public school, not some ersatz mixed-use, transit-oriented “lifestyle” center.

  16. Thank you Mr. Dean Gunderson. Unfortunately, Idaho seems to be enamored of the boom and bust economy of a resource based feudal state. Plenty of fools gold still to mined here.

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