Macon County Shared Vision

Does Decatur Get A Free Lunch?

MCSV's news site has a copy of an editorial in Tuesday's Wall Street Journal (7/31/2007) regarding Milton Friedman on his 95th birthday. Friedman, a Noble Prize winner in economics, was one of the most influential thinkers of our time on economics and public policy. We encourage everyone to look at this article. According to the article:

"Friedman knew that the answers depended on the extent to which governments supported personal freedom, political freedom and economic freedom. And thanks to his advocacy, many countries around the world have come to see the connection between freedom and prosperity."

Decatur & Macon County would benefit from applying Friedman's lessons regarding taxes and school choice in our community. He advocated government policies that encouraged self-determination. Friedman taught leaders around the world that economic growth flourishes when taxes are lowest. When taxes are lowest, personal freedom, ingenuity and creativity flourish. This principal has been proven and demonstrated in countries, states and cities around the world. (Recent economic evidence shows that states with no income tax have the strongest economies.)

Right now, the Decatur community is considering strategies to revitalize our community. We encourage those in the process to recognize that high local taxes discourage families and businesses from locating here. Without new investment and families in our community, we will continue to decline and suffer from the ills of a declining community.

Decatur's current "spend and tax" policies ignore this reality. The taxes in Decatur and Macon County are some of the highest in Illinois. Local taxes are 20% to 50% higher than other Illinois communities. Numerous projects pursued in Dectaur have the effect of promoting individual interests while increasing the tax burden on everyone else. This is in direct conflict with Friedman's teachings. (For a list of these projects and others that have and will increase the structural tax burden in Decatur - see below.)

Should we ignore Milton Friedman's teaching that increased taxes will hinder the goals we have for our community? How will Decatur ever lower the tax burden if local spending and taxes increase? We suggest two policy initiatives:

1. Local Government Units Must Live Within Their Means
2. Local Taxpayer Funded Investments Should Demonstate Economic Benefits

"Living within our means" refers to applying fiscal discipline and limiting tax levels to levels that are competitive with other Central Illinois communities (that compete for our jobs and workers). If someone can save 20% of their property taxes by buying their home in Forsyth, or any other city, rather than in Decatur, they will do so. Friedman taught us this. The tax policy of the City, Park District, School District and Township must manage spending and tax burden to lower the tax rate from $8.8 per $100 (equivalent of nearly 3% of market value) to a competitive level of close to $7.0 per $100 (equivalent of nearly 2.3% of market value).

"Investments Should Demonstrate Economic Benefits " refers to expecting measurable economic benefits for any development project that are proportional to the taxpayer contribution. Economic benefits can be estimated and measured, and, should be. Retail sales and sales taxes can be tracked - landlords require this reporting all the time. Property taxes can be logged. Most importantly, jobs created or maintained can be committed and monitored. States have required companies to demonstrate job creation as a legal condition for state investments in projects. Decatur has not. The elected leaders in our community should expect these measurable benefits and monitor their achievement. Economic development commitments not met should result in loss of benefits to the developer.

More on "school choice" in a later post.

Making a Real Difference

Once in awhile great policies become transformational. We have always advocated policy initiatives and discussions to promote genuine and lasting economic growth. Occasionally transformational ideas also provide breakthrough opportunities to change a local area for decades to come. Rarely these ideas come together. Kalamazoo Michigan received a lot of attention this year when the community offered all graduating high school students a four-year scholarship. The Kalamazoo Promise received a lot of attention in a Wall Street Journal article on March 10, 2006. Another article was written in the Chicago Tribune on April 2, 2006, and went into detail about the early effects in Kalamazoo. A parent quoted in the Tribune article said "This is mind blowing".

Decatur Airport & Community Growth

Kudo's to Team Decatur and others that hosted an informational event for the community on the attributes and potential of the Decatur Airport. We will post a summary of things we learned today, but wanted to offer our support for the Airport and invite critical thinking about how best to leverage a source of competitive advantage for our community.

The Decatur Airport is a great resource and has benefited from support and investment for years. Millions have been invested and continue to be invested in this facility. The airport accommodates 55,000 air operations (take-offs or landings) per year, 11,000 commercial passengers per year and 2 UPS air transport flights every day. (Decatur is the Central Illinois hub for UPS with 100,000 air package shipments per month). It also is home air base for ADM, a customs facility for the Homeland Security department, and, a base for the Illinois National Guard. We should be proud of this airport.

Team Decatur asked the community to support efforts to obtain $500,000 per year in state grants to subsidize passenger air travel to Midway Airport. This may be worthwhile. Most of us in MCSV believe that it is even more important and beneficial for the community to focus on the east side bypass to encourage much greater use of the airport by air travel based enterprises. Decatur airport could easily accommodate substantial more flight operations by private and airfreight users. The Decatur Airport (and community) would have a substantial competitive advantage due to its size, unused capacity and central location within 1 hour flight from 25 million people in the middle of the US.

Potential uses include:

1. An aircraft maintenance facility for commercial or private aircraft.
2. A home airport for private jet fleets from all over the mid-west (the cost of hangering private jet fleets in major cities is very expensive).
3. Additional air freight distribution facilities like UPS for other distribution companies or internet fulfillment companies needing ready access to air shipment.

With Decatur's competitive resource costs and central location, the airport could easily lead economic development and expansion in our community. However, new enterprises need ready access to the airport via ground arteries. This means the south access to the airport business park and the East Side Bypass which would provide ready access to Interstate 72. This should be a focus and challenge to our community in the near term and not over the next 15 years.