10/03/13: Competing against ourselves

This op-ed appeared in The Virginian-Pilot on the date shown.

“IT COULD HAVE been (much) worse.” So declares the opening of The State of the Region report from Old Dominion University’s Regional Studies Institute.

The opening refers to the effects that sequestration and stagnant federal spending have had on our region. It is sobering, to say the least.

But it is the last part of the report, available at odu.edu/forecasting/state-region- reports, that interested me the most.

This section —“OK, Now What Should We Do?” — offers advice for the decision-makers in the region. Tucked into some very specific proposals was one about “frittering away public funds on projects that subsidize private businesses.”

I particularly liked this gem: “Don’t ignore the displacement effect.”

Every economic development director in the region needs to read that one.

Most of us don’t have unlimited income. The amount that we have to spend on things beyond the necessities is fixed. That doesn’t change when a new entertainment venue is opened. Whatever we spend in one place comes at the expense of not spending it in another.

That dynamic changes only if our income goes up, something that hasn’t happened in a while in our region. And with the federal government shutdown upon us, an increase in income is unlikely in the short term.

The cities in our region have invested taxpayer money in projects that, essentially, compete against each other for the same dollars.

Sure, they somehow believe that we will draw people — and money — from outside our region, but somehow that never comes to pass.

“Most of these highly visible investments simply do not cut the financial mustard,” the report declares.

The root of this is, of course, Virginia’s system of independent cities, which pits them against each other rather than encouraging them to work together. Virginia is alone in the country with this setup. Of the 42 independent cities nationwide, 39 are in our state.

What would it look like if the cities were allowed to work together?

Revenue-sharing arrangements would mean that we would have the right number of, say, convention centers, rather than one in each locality.

Cost-sharing arrangements would mean we’d have a regional sewer system, as recently proposed by the Hampton Roads Sanitation District.

Many citizens do not see the borders of the city in which they reside when they choose to go to work or play. Our decision-makers, though, see those borders as they decide to spend our money on the next big thing.

Yes, we elect and employ them to be visionaries. But we also expect them to be pragmatic.

I’d like to see — in plain English — a calculation of the displacement effect on each major proposed economic development project.

Perhaps then the decision-makers would conclude that spending our hard-earned money on a majority of these projects just doesn’t cut the mustard.