Tag: Washington DC

Move DC or Move Out of DC?

Washington DC has proposed an anti-auto transportation plan that is ironically called “MoveDC” when its real goal is to reduce the mobility of DC residents. The plan calls for reducing auto commuting from 54 percent to no more than 25 percent of all workers in the district, while favoring transit, cycling, and walking.

Click image to download the plan’s executive summary. Click here to download other parts of the plan.

The plan would discourage auto driving by tolling roads entering the district and cordon-pricing. Tolls aren’t necessarily a bad idea: as I explained in this paper, properly designed tolls can relieve congestion and actually increase roadway capacities. But you can count on DC to design them wrong, using them more as a punitive and fundraising tool than as a way to relieve congestion. Cordon pricing is invariably a bad idea, much more of a way for cities to capture dollars from suburban commuters than to influence travel habits.

The plan assumes that the district’s population will increase by 170,000 people over the next 25 years, which is supposed to have some kind of apocalyptic result if all of those people drive as much as people drive today. The district’s official population in 2010 was 602,000 people, a 155,000-person drop from 1970. While Census Bureau estimates say the district’s population is once again growing, it doesn’t seem all that apocalyptic if the population returns to 1970 levels.

The Census Bureau estimates that 54 percent of people employed in the district drove to work, while only 37 percent took transit in 2012. Since part of the MoveDC plan calls for discouraging people outside the district from driving to work in the district, it appears the goal is to cut that 54 percent by more than half. DC’s plan to discourage driving by taxing commuters through cordon pricing is more likely to push jobs into the suburbs than to reach this goal.

Congestion isn’t a serious problem in the district, mainly because the legal height limit prevents Manhattan-like job concentrations. Instead, the main congestion problems are on the highways entering the district. These problems can be solved through congestion tolls, which would encourage some travelers to shift the time they drive. Because road capacities dramatically decline when they become congested, keeping the roads uncongested would effectively double their capacity during rush hour, which ironically could allow even more people to drive to work. DC’s anti-auto planners won’t want to do that, which is why they are likely to focus more on cordon pricing than congestion tolling.

If reducing congestion isn’t the issue, then what is the goal of the anti-auto emphasis? MoveDC says it is “rapidly rising travel costs, and concerns about rising carbon emissions.” People deal with rising travel costs by replacing their cars less frequently and buying more fuel-efficient cars when they do replace them. MoveDC’s solution is to substitute high-cost urban transit for low-cost driving, even though transit actually emits more greenhouse gases per passenger mile than driving.

Philly Schools—Is Money Really the Problem?

House majority leader Eric Cantor is in Philadelphia today to pick up Attorney General Eric Holder’s gauntlet. Holder’s DOJ has filed suit to shut down a Louisiana school voucher program that serves an overwhelmingly African American population, on the grounds that… it’s bad for African Americans. Cantor vows to fight the DOJ if Holder doesn’t drop the suit, and he’s delivering his message at a Philly charter school serving mostly African American kids—one that has about six times as many applicants as it has places.

Apart from its proximity to DC, Philly might seem an odd location for Cantor’s presser, but the city of brotherly love is going through an educational drama of its own. The Philadelphia School District has had budget problems for years. It’s seen horrendous violence, plummeting enrollment, and commensurate staff layoffs and school closures. Most media accounts bewail lack of funding as the key problem. Salon.com recently ran a story with the subhead: “Pennsylvania’s right-wing governor drains public schools of basic funds.” CBSNews laments “the same old problem: not enough money.”

What those and all other Philly school district stories I’ve seen have in common is that they fail to say how much the district actually spends per pupil. Not having attended journalism school, I missed whatever class teaches education reporters to omit the single most important fact in their stories, so allow me try to fill in the blank.

A quick Google search reveals that Philly’s 2013-14 budget is $3.03 billion (p. 50), of which $862 million is for charter schools. The district serves 136,000 students in its regular public schools and another 63,000 in charter schools. So the regular public schools, the ones that are being “systematically murdered” by budget cuts, spend $15,941 per pupil. That’s about $3,000 more than the national average. It’s also $1,600 more than the day tuition at Temple University. The city’s charter schools receive about $2,300 less than the regular public schools.

That’s not to say that the district’s classrooms are fully stocked with supplies or that the city’s best teachers are paid what they’re worth. What it does suggest is that the cause of those problems may have less to do with the amount of funding available than with the way it is allocated. After all, Washington, DC spends around $29,000 per pupildouble what Philly does—and it performs worse in both reading and math by the 8th grade.

Sorry about the Recession, America, But Don’t Worry about Washington

The Census Bureau reports, says a Wall Street Journal article, that between 2000 and 2012 “median household incomes for the nation as a whole dropped 6.6% — from $55,030 to $51,371.” There’s reason to doubt that real incomes are actually down over such a long period. But growth is certainly slow.

Except in Washington. The Journal notes:

The income of the typical D.C. household rose 23.3% between 2000 and 2012 to an inflation-adjusted $66,583, according to the Census Bureau’s American Community Survey, its most comprehensive snapshot of America’s demographic, social and economic trends. …

The Washington, D.C. metro area — which includes the surrounding suburbs in Maryland, Virginia and West Virginia — has it even better, with a median household income of $88,233 that ranks highest among the U.S.’s 25 most populous metro areas. Tampa, Florida’s median income, by contrast, is under $45,000….

[Washington’s]  local economy is expanding faster than the broader nation, and its property market is soaring, thanks in part to increased federal-government spending and an influx of federal contractors, lawyers and consultants.

As we’ve written here many times, a rising tide of government spending may be bad for the American economy, but it’s great for the Washington area.

Washington is wealthy and getting wealthier, despite history’s slowest recovery in most of the country. As we’ve said here before, this of course reflects partly the high level of federal pay, as Chris Edwards and Tad DeHaven have been detailing. And it also reflects the boom in lobbying as government comes to claim and redistribute more of the wealth produced in all those other metropolitan areas. 

Money spent in Washington is taken from the people who produced it all over America. Washington produces little real value on its own. National defense and courts are essential to our freedom and prosperity, but that’s a small part of what the federal government does these days. Most federal activity involves taking money from some people, giving it to others and keeping a big chunk as a transaction fee.

Every business and interest group in society has an office in Washington devoted to getting some of the $3.6 trillion federal budget for itself: senior citizens, farmers, veterans, teachers, social workers, oil companies, labor unions - you name it. The massive spending increases of the Bush-Obama years have created a lot of well-off people in Washington. New regulatory burdens, notably from Obamacare, are also generating jobs in the lobbying and regulatory compliance business.

Walk down K Street, the heart of Washington’s lobbying industry, and look at the directory in any office building. They’re full of lobbyists and associations that are in Washington, for one reason: because, as Willie Sutton said about why he robbed banks, “That’s where the money is.”

Happy New Year, Washington

Rep. Gerald E. Connolly, a Democrat representing the federal workforce, frets over the impact of sequestration or any alternative on his Fairfax County district: “Undoubtedly, we will take a hit….It’s going to result in a steady retrenchment in government investment in both the civilian and defense sectors. That’s going to affect employment and the robustness of our economic growth in this region.”

Of course, this is a “hit” – or more likely a nick – that comes after a doubling of the federal budget in a decade. And in the past weeks, the Washington Post has done a good job of reporting the impact of all that taxed and borrowed money on the Washington area. For instance:

The Washington region has emerged from the recession looking even more affluent compared with the rest of the country, boasting seven of the 10 counties with the highest household incomes in the nation, new census numbers show.

With a median household income surpassing $119,000, Loudoun County heads the list. Fairfax County, at nearly $106,000, is second. Both have held the same positions for several years running….

The rankings in the 2011 American Community Survey released Thursday expand Washington’s dominance among high-income households, reflecting a regional economy that was largely cushioned as the recession yanked down income levels elsewhere. Household incomes rose in most counties around Washington last year, even as they continued to sink around the country.

The stability of an economy built on the pillars of the federal government, its legions of contractors and a flourishing high-tech sector is evident in the income rankings.

In 2007, before the recession began, five counties in suburban Washington made it into the top 10. By 2010, there were six. The seven in the latest ranking is an all-time high.

And where does that money go? To housing, certainly (thanks, America!), as the Post noted in an article on the “red-hot real estate market”:

It didn’t look like a house anyone would pay $400,000 extra for.

Several walls inside the gray townhouse with blue trim were streaked with water stains. The first floor was noticeably uneven. And termites had dined in front.

The big pluses: It was 2,850 square feet, had off-street parking, and was in walking distance of Union Station [and thus of Capitol Hill]….

Two weeks and 168 bids later, the house — in the 800 block of Fourth Street NE — was sold this month for $760,951 to an unidentified buyer….

While much of the nation is still struggling to emerge from a historic housing-market meltdown, the District is reliving its boom days. High rents, low interest rates, low inventory, and a flood of new residents in their 20s and 30s are making parts of the city feel like it’s 2005 again.

The median home sale price in the District is up 14 percent from last year, according to RealEstate Business Intelligence (RBI)….

Bullish real estate agents say it is only a matter of time until those areas catch up as well. There is no talk of “bubbles” or fallout from a dive off the “fiscal cliff.” People are still moving to the Washington area, where the population grew by 122,000 from 2010 to 2011, Census Bureau data show.

And for those with money left over after paying Washington real estate prices, there are the finer things in life, the things that used to be for hedge fund managers in New York and tech innovators in Silicon Valley:

When Is $28,000 per Pupil Not Enough?

…Apparently, when you are the District of Columbia public school system. The Washington Times reports today on a candle-light vigil beseeching the federal government for extra cash for new computers. The group organizing the vigil, OurDC, shares this “horror story” from former technology teacher Toval Rolston:

I’ve been in D.C. schools where the computers are so antiquated that you can’t even download a basic pdf file; our children don’t have the tools to compete in today’s high tech world.

The twin implications of this plea are that DC schools are underfunded and that more money will actually be spent wisely. The first statement is false and the second is decidedly unlikely. The last time I calculated total spending on K-12 education in DC, from the official budget documents, it came out to over $28,000 per pupil (the linked post points to a spreadsheet with all the numbers).

How do you manage to spend $28,000 per pupil and not manage to keep your computer hardware up to date? Or, for that matter, manage to have among the worst academic performance in the country? Maybe, just maybe, it has something to do with not being capable, or perhaps even inclined, to spend the money on what works.

The Washington Times, by the way, points out that OurDC is headquartered at the same address as the Service Employees International Union. Go figure.

Rise of an Imperial City, Cont’d

From time to time my colleague David Boaz posts about the many ongoing ways in which the economy of Washington, D.C. continues to outpace that of the rest of the country, thanks to a well-paid and layoff-resistant workforce of federal employees and contractors, a thriving lobbying sector, and so forth. Thus David noted this week that the Washington, D.C. metro area has now attained the highest family median income of any major city, and last month that, according to Census Bureau figures analyzed by Newsweek, “seven of the 10 richest counties in America, including the top three, are in the Washington area.” I thought I’d add three more data points to this picture:

  • Even as most of the country remains mired in serious housing recession, the capital has bounced back smartly: “The District claims the top ranking on the agency’s state-by-state list of annual price appreciation, with 5.29 percent growth since the third quarter of last year,” compared with a 3.2 percent decline nationally. Virginia and Maryland did less well, but most of both states’ population lives outside the D.C. orbit. [Washington Post]
  • Commercial rents in downtown Washington have likewise defied the steep national slump, as the federal government expands its demand for office space: “The rise has been so dramatic that for the first time in five years, the average asking rent in D.C. is higher than in New York City, according to CoStar and a new report of third-quarter activity by commercial real estate firm Cassidy Turley…. ‘The federal government has created a smooth but slow rise in rents [in D.C.],’” noted one real estate economist. [Washington Post again]
  • A business boom – in journalism? Even as veteran reporters elsewhere scrounge for work, talent and money continue to pour into Washington’s specialized news-gathering business, most particularly the sorts of newsletters that (for a subscription price in the thousands of dollars) will bring you fresh and fine-grained news of the doings of federal regulatory agencies in fields like energy, pharmaceuticals, securities and telecommunications. “[B]y dint of its regulatory powers, its executive orders, its judicial decisions, its ability to conjure money out of thin air, and its budget-making authority, Washington dictates who can do business and how,” writes Jack Shafer. “… Although $5,700 for a subscription to Bloomberg Government might sound steep to you, it’s chump change for businessmen who become the first in their cohort to read Line 125 in a pending bit of legislation and can place a bet on – or against – it in the market.” [Slate]

A Harsh Climate for Trade

Although it has very much taken a back-seat to health care, and a press report [$] today say it could be bumped down yet another notch on the administration’s hierarchy of goals, climate change is shaping up to be a major battle if the others don’t prove to be prohibitively exhausting. So today I am weighing in on the debate by releasing my new paper on the dangers of using trade measures as a tool of climate policy.

The Democrats were keen to pass a climate change bill in advance of the December meeting in Copenhagen designed to agree on a successor regime to the Kyoto protocol, which expires in 2012.  However, opposition from a number of quarters and the fear of health-care-town-halls-mark-II has cooled their heels. Senate leaders have pushed back the deadline for passing bills out of committees a number of times.

The reason why climate change legislation has become so controversial is that businesses and consumers are, quite understandably, fearful about any policies that threaten to increase their costs. I’ll leave it to others to blog about the effect of emissions-reductions policies on jobs and profits, but even the fear of losses has led to calls for special deals for “vulnerable industries”, in the form of free emission permits and/or protection from imports that are sourced from countries that purportedly take insufficient steps to limit emissions.

H.R. 2454, the so called Waxman-Markey bill passed by the House in June, contains both free permits and provisions for carbon tariffs. I’ve blogged before about the efforts of trade-skeptic senators to introduce the same kinds of protections in the senate bill. To that end, Sen. Sherrod Brown (D, OH) is reportedly meeting with Sen. Barbara Boxer, Chairwoman of the Senate Environment and Public Works Committee next week about trade protections for manufacturing industries.  As my paper makes clear, I think these efforts are misguidedly ineffective at best, and harmful at worst.

I’m looking forward to discussing these issues in more detail tomorrow at a Hill briefing in Washington DC. Registration for the event was closed very early because of overwhelming demand, but you can watch the event when the video becomes available on the Cato website.