These States Are Sowing Confusion About Cities’ Power to Fight Covid-19

As coronavirus took hold across the U.S. in mid-March, images of beaches packed with spring breakers became a symbol of government inaction. Some cities closed their own beaches and issued stay-at-home orders, but Florida Governor Ron DeSantis at first declined to take similar steps statewide. On April 1, he relented in the face of criticism and issued an order that asked people to limit movement outside their homes to “essential trips.”

But an amended version of that order also did something else: It called into question several stricter stay-at-home orders already passed at the local level.

The long-running saga on state preemption powers — the ability of state governments to override laws passed by cities — often accelerates during moments of disaster. After several mass shootings, some states have blocked cities that wanted to curb gun use. In the wake of catastrophic weather events, states clamped down on cities that tried to ban fracking and curb the burning of fossil fuels.

In the face of coronavirus threats, some states have attempted to clamp down on city measures to keep residents sheltered and businesses closed. But so far in this epidemic, states have been sowing confusion not just by exerting their power to obstruct local action. They’ve also sent mixed messages that leave local governments unsure whether their own measures are valid — or for how long.

In the case of Florida, the cause of confusion was a provision in the state law that specifically said it superseded “conflicting local provisions.” One local mayor, Mike Ryan of Weston, told the Sun-Sentinel he believed there was “no way to read the order” other than preempting his own city’s measures, prompting fear of legal action. But as Politico reports, when he and his fellow mayors asked the governor to clarify, DeSantis said the order doesn’t preempt local measures. The issue remains unresolved.

An even more forceful warning was issued by Mississippi’s Governor Tate Reeves: In an executive order that placed statewide restrictions on some businesses, the governor specifically preempted any social-distancing restrictions or guidelines passed by local jurisdictions. Many cities already had stricter rules in place, especially along the Gulf Coast, causing local leaders to scramble.

But perhaps the political pressure of a pandemic that is now undeniably spreading throughout the U.S. caused Reeves to change his tune. Days after Reeves’ initial announcement about preemption, he issued a second order clarifying what he meant to say the first time: Indeed, local governments could go further to enforce social distancing, as leaders in Biloxi, Ocean Springs, Jackson, and other cities had already done. For the state, it’s something of a retreat from the position that Reeves took when he said, with a Trumpian flourish, that “Mississippi’s never going to be China.”

You’ll notice that this is mostly happening in the South, but not exclusively. In Massachusetts, Boston is fighting to halt construction of non-essential buildings to limit the spread of the virus, while the state has ordered all construction to proceed.

States have been dropping the preemption gauntlet on cities for decades, and at least since 2011, red states have been using this power far more frequently, and punitively for cities than ever before, according to a report released last year by the Local Solutions Support Center and the State Innovation Exchange.  

“We have seen a steep increase in the use of states deliberately limiting or eliminating the power of cities to pass policies that they think will help improve the lives of their people,” says Kim Haddow, executive director of LSSC. It’s not just emergency coronavirus measures that are affected. Other safety-net measures that would help a particularly large number of residents have been blocked in many states. According to the LSSC report, 23 states have banned local paid sick leave ordinances and 31 states bar cities from passing rent-control policies.

Texas is one example of this. It passed a statewide order on April 2, only after Dallas and Austin pressed heavily for weeks, but Dallas still can’t enforce a paid sick leave ordinance that was supposed to kick in on April 1 (and that would cover different people than the temporary federal sick leave measure).

“What’s very clear to us in this pandemic is that if you look at cities who wanted to pass paid sick days, or new broadband policy, or affordable housing, or minimum wage policies, those are the policies that are preempted the most,” said Haddow. “And yet as you look at this crisis, those are the policies that are most needed right now.”

Throughout the first half of the 20th century, cities created and pushed for legal documents that assert local powers, known as home rule charters, in part to protect them from overbearing state policies, but those instruments haven’t been updated since 1953 and “are no longer up to the task of meeting the challenges we face in the 21st century,” reads a report produced by LSSC and the National League of Cities in February.  

For example, Tybee Island, a coastal city in Georgia with its own home rule charter, closed its beaches on March 20 to prevent spreading coronavirus. But on April 2, Georgia Governor Brian Kemp ordered all beaches back open, against the wishes of Tybee Island and other coastal cities.

In South Carolina, it was an ask from a state lawmaker for legal advice that disconcerted city leaders. Greenville Mayor Knox White had been preparing with the city council to pass an emergency stay-at-home order last month, when a legal memo from the attorney general said that cities do not have the legal authority to do that. According to Attorney General Alan Wilson’s memo to the state legislator, not only does the state exclusively hold that power, but a private citizen could sue cities that had passed those ordinances. The memo caused some places like Folly Beach to temporarily rescind measures they had already passed and plead for the governor to take statewide action, according to the Greenville News.

But asked for clarity, the attorney general said the memo was only an advisory opinion, not a legally binding order. And there are no clear plans for now to enforce its legal interpretation. With South Carolina still holding out on a statewide order to shelter in place or close private businesses, Greenville revived its plan and joined several other major South Carolina cities in passing an emergency stay-at-home order — at least until another action from the state raises new questions.   

With reporting by Kriston Capps.

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Closing the Water Access Gap in the United States

Today, over 2 million Americans are living without access to clean, running water. The newly released ‘Close The Water Gap’ report by DigDeep and the US Water Alliance pulls back the veil on America’s hidden water crisis.

This is the first-ever comprehensive look at indoor water access across the United States, and its findings are explosive: Race is the strongest predictor of vulnerability. In six states (plus Puerto Rico), progress is actually backsliding. More than 44 million Americans are served by water systems with recent violations of the Safe Drinking Water Act.

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How Cities and States Can Stop the Incentive Madness

This is the first part of a two-part Q&A with economist Timothy Bartik.

Recent years have seen a startling surge in the use of economic-development incentives by local and state governments. Amazon unleashed a fierce competition for its HQ2, with a number of contenders offering incentives worth billions of dollars (one package was estimated to be in the range of $8.5 billion). Before that, in 2017, Wisconsin handed more than $4 billion to the electronics manufacturer Foxconn. In 2016, Nevada gave Tesla more than $1 billion to build a battery factory, and two years earlier, Oregon gave Intel $2 billion for a new semiconductor chip plant.

Today, nearly all U.S. cities and states use financial incentives to attract companies, even though the bulk of research on the subject shows they are an ineffective waste of taxpayer money. In the first part of a two-part conversation with Timothy Bartik, we discuss the problem of incentives. Later this week, in the second part, we’ll talk about how effective place-based policies can combat regional inequality and help revive distressed places. Bartik is an economist at the W.E. Upjohn Institute for Employment Research and the author of a new book, Making Sense of Incentives: Taming Business Incentives to Promote Prosperity. Our conversation has been edited for length and clarity.

What exactly are business incentives, and how much do states and cities spend on incentives?

I consider incentives to be providing businesses with assistance that is customized to individual businesses, or at least particular types of businesses—a tax break that wouldn’t ordinarily be provided to all businesses, for example. The amount that I estimate is devoted to incentives is around $50 billion per year. Almost all of that is in tax incentives. Since 1990, I estimate, incentives have about tripled in the U.S. A lot of that occurred in the 1990s to the early 2000s, and [by] 2001 to 2015, things had roughly stabilized. Some states cut back on incentives; some states expanded incentives.

Timothy Bartik. (W.E. Upjohn Institute for Employment Research)

But the recent Amazon and Foxconn location competitions led to huge incentive offers, well beyond what most states typically have done. Foxconn was about 10 times as expensive per job as ordinary incentives. And some of the Amazon offers were also very high. So, a concern is that we’re going to see another rapid escalation of incentives in the next few years.

Do you think that Amazon HQ2 has changed the way that incentives are viewed by local and state-level actors?

There were some huge offers for Amazon. But then in fact Amazon ended up choosing Virginia and New York, which did not even make the biggest offers within [their respective] metro areas. Newark offered a lot more than New York City. Virginia’s offer was far less what Maryland offered, and it was certainly in line with Virginia’s prior policies. Virginia tends to be a low-incentive state.

It’s also hard to tell how this politically will play out because of the backlash to the New York offer. I think some of the backlash occurred because New York offered at least four times the amount per job that Virginia did, and people looked at that and said, “Wait a second.”

In Virginia’s case, a lot of the “incentives” were public-service enhancements: a new campus of Virginia Tech in Northern Virginia, improvements in public transit, enhancements in job skills. This kind of package makes more sense than just throwing a lot of cash at the company.

So, will states in the future imitate some of the huge offers to Amazon, or will they imitate what Virginia did? That’s the political choice faced by governors and state legislators.

What kinds of firms typically get incentives?

The evidence strongly suggests that larger firms are much more likely to get incentives, and get larger incentives. First, many state incentive programs have minimum size requirements, so that if you’re only creating 10 jobs, you get nothing, [but] if you create 500 jobs, you get a lot per job. So that type of incentive program inevitably favors large firms.

Second, large firms can get special legislation passed. The Foxconn deal was not something that was part of Wisconsin’s normal incentives. They passed special legislation to do it. They’re not going do that for one firm that is promising to create 50 jobs. This raises a key question: Does providing the largest incentives to the very largest firms increase the market power of these firms in a way that is damaging to our economy and society?

What are the main factors that attract firms to certain locations, and of those factors, where roughly do incentives rank among them?

The cost of labor and its productivity is clearly a more important factor than incentives or even overall state and local business taxes. That doesn’t mean incentives have zero effect, but obviously other cost factors are more important. The typical incentive package offsets about 30 percent of the state and local business taxes that the firm would otherwise pay.

In your book, you argue that business incentives are based on bad ideas and misleading claims.

Politicians and economic developers often claim that every firm they touch with an incentive dollar would never locate in their city and state but for the incentive. And they often claim that incentives are self-financing. But the empirical evidence strongly suggests that at least 75 percent of the time, the same jobs would’ve been located in the state and local economy anyway, so the incentive is then all cost and no benefit.

Amazon selected Crystal City in Northern Virginia for its second headquarters, even though Virginia offered less in incentives than neighboring Maryland did. (Cliff Owen/AP)

You devote a chapter to the concept of multiplier effects. Tell us more about this—why is it important in understanding business incentives?

People talk about multipliers as though they are magic. One of the rationales for trying to give incentives to a firm is that potentially there are multipliers that occur, because the firm will buy supplies from local suppliers, or because the firm’s workers will buy more things locally.

But when you attract firms and you add these multiplier effects, the resulting growth tends to drive up local wages, local land prices, and other local prices. So the area becomes a higher-cost area, and that’s going to discourage some job growth in other firms. Estimates I’ve done suggest that these kind of negative cost feedbacks reduce the multiplier by perhaps one-third.

And incentives don’t pay for themselves, as a rule. When you bring in jobs, you also bring in people, and you have to provide this added population with public services. Usually, the added public-service costs eat up at least 90 percent of any increased revenue.  

So if incentives don’t pay for themselves, where do you get the money to pay for the incentives? You have to increase taxes, or you have to cut public spending. Increased taxes reduce residents’ incomes. They don’t have as much to spend. And that’s going to decrease jobs in the area. If you cut public spending, that may directly lead to laying off public workers—which directly reduces jobs, and also reduces the spending power of those workers who were laid off.

Also, tax increases or spending cuts can have what economists call supply-side effects on the productivity of the local economy. If you cut spending on public schools, that’s going to have some negative effects on the quality of the local labor supply. The same could be true for cuts in university spending, cuts in public-health spending, cuts in infrastructure spending.

The point is that the money to pay for incentives is not coming out of thin air. State and local governments have to somehow pay for incentives, and that has some economic consequences. So you can’t simply look at the positive side of the multiplier effects of incentives and job creation, and ignore some of these negative effects. You’re going to drive up costs, which is going to drive away some jobs, and you’re also going to have to pay for the incentives, and that’s going to drive away some jobs.

How can policymakers and journalists better evaluate incentives and incentive packages?

I would suggest they ask some tough questions. They should ask: what happens if, instead of assuming 100 percent of the jobs are due to incentives, we only assume 10 or 20 percent are due to the incentives? How does the benefit-to-cost ratio change? They should ask whether the claimed multipliers account for the negative cost feedbacks that will tend to reduce multipliers.

They should be asking: to what extent are these jobs likely to go to local residents? If the local economy is already booming, if you don’t have a shortage of jobs, it seems strange to pursue a policy of just creating jobs for the hell of it. Especially in a booming economy, maybe you need to be more targeted in how you create jobs—what types they are, who gets them.

And you also need to look at how the jobs match up with the local workforce. If all the jobs seem unlikely to be the type that local workers—particularly local workers who are unemployed or underemployed—can access, you should raise some issues about who actually benefits from providing incentives to encourage job growth.

What would a model incentive package look like?

What I would do is target incentives [to] distressed places. Right now, that’s not the case. There’s no rhyme or reason in which state or local areas are most aggressive in offering incentives. If we’re trying to create jobs, distressed areas need the jobs the most. In fact, there’s empirical evidence that job creation has greater benefits in increasing employment-to-population ratios in distressed areas.

We also need to cut back on long-term incentives. Many incentive packages provide assistance for at least a decade, and some provide assistance for 15 years or 20 years. Yet firms are pretty myopic in making investment and location decisions. Long-term incentives are bad economically because they have less bang for the buck, in that they tip fewer location decisions per dollar. They’re bad politically because they’re so tempting for state and local political leaders. The current governor or mayor can get political credit now, but the fiscal cost falls on a future governor or mayor. I would restrict the term of incentives to just a few years.

By cutting back long-term incentives, you also cut the cost of incentives by quite a bit. I would limit incentives to be around $10,000 to $20,000 per job. If you restrict incentives to be only short-term, and if you target distressed areas, it would likely cut the overall cost by at least two-thirds, maybe more.

The resulting savings could be used to invest in services to small and medium-sized businesses, and to invest in local job skills, land development, and infrastructure, all of which has a higher bang for the buck for local economies. If you put together a package like that, you’re going to have more job creation per dollar, it’ll be more targeted at distressed areas, and more of the jobs will go to local residents. In contrast, what we’re doing with incentives now is just redistributing jobs among geographic areas according to random political factors.

Why can’t state and local policymakers do a better job of policing themselves and limiting wasteful incentives?

It’s in the interest of residents for state and local governments to restrain themselves. A state that was wise, a local government that was wise, would say: “Look, we’re spending a lot of resources on these incentive programs. They have a relatively low bang for the buck, they have high opportunity costs, and we’re not getting the results we want. We’re going to restrict these incentives more to distressed areas. And we’re going to focus more on providing various programs that are more effective, such as services to smaller businesses, and investments in skills development and land development.”

These investments would be far more cost effective in promoting local prosperity. That would be a much more sensible strategy than just handing out lots of tax breaks and other cash to firms. Unfortunately, handing out tax breaks is easy and provides immediate political benefits, while postponing costs to the next governor or mayor. So politics outweighs what would be in the best interests of a state’s residents.

What should the federal government do to rein in incentives?

The federal government could prohibit incentives, or at least prohibit the most excessive incentives or the most poorly targeted incentives, or put an extra tax on those. It could limit incentives that go to the very largest firms, with more than 10,000 employees. I have some doubts about whether the federal government is likely to have the political will to ever take such actions.

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Nashville Has the Most Kurds in the United States. And They’re Angry.

To hear the mellow twang in the voice of Nashville resident Shirzad Tayyar, you might assume he was born in Music City. Like many of his fellow Kurds, however, Tayyar came to Middle Tennessee from the Middle East as a child, and over the years of public school and community involvement, he has become as much a Nashvillian as anyone.

Or even more so, in his case, because the 29-year-old is so outgoing. He throws gatherings just to meet his neighbors, and led the first food tours of the south Nashville area known as Little Kurdistan. The city’s population of Kurds, estimated at 15,000 to 20,000, is the largest in the United States. Because of that, Nashville is a center of anxiety about President Trump’s surprise decision on October 6 to withdraw U.S. troops from the area, which many believe has allowed Turkey to begin a campaign of ethnic cleansing against the Kurds there. After widespread condemnation Trump has amended his decision somewhat, but the Kurdish community in Nashville remains worried.

“This whole debacle threw everyone for a curveball,” Tayyar told CityLab this week. “This kind of sideswiped everybody.” On October 11, less than a week after Trump’s announcement, Kurds staged a protest outside a federal office building in Nashville, the Tennessee state capital, with participants including the city’s Democratic Congressman, Jim Cooper. Joining Kurds and other supporters were members of the local Jewish community, who have made supporting refugees a priority in recent years. “My hope is that we will be planning things with them, moving forward,” Deborah Oleshansky, community relations director for the Jewish Federation of Nashville, said of her Kurdish neighbors.

Three days later, the scenic Korean War Veterans Memorial Bridge was lit in the green, yellow and red colors of the Kurdish flag, as was the Metro Courthouse. Even area Republican congressman Mark Green joined the majority opposing the military pullout in an Oct. 16 House vote, and Republican Senator Marsha Blackburn, a staunch Trump supporter, criticized the move as well.

An October 11, 2019 protest supporting the Kurds in Nashville.  (Harrison McClary/Reuters)

And while Nashville is a majority Democratic city within a majority Republican state, members of the Kurdish community say that people of every stripe have been showing them support. “We’ve received lots of sympathy and love. It was really overwhelming,” said Tabeer Taabur, who spends his days volunteering at the Tennessee Kurdish Community Council. “People are asking, what can we do? We tell everyone, reach out to your representatives.”

Taabur attended Glencliff High School, one of Tennessee’s most diverse high schools, as well as local colleges, obtaining a master’s degree in criminal justice from Middle Tennessee State University. He is married with four children, and says there’s nowhere else he’d rather live. Nashville is home. But the feeling of Kurdish peoplehood is strong, and his voice rises as he describes what is happening 6,500 miles away. His own father was killed by chemical weaponry during the reign of Saddam Hussein, he says. “We need help now. People are getting killed now. They’re using phosphorus weapons now. Things are escalating. Things are changing every hour.”

“When is it going to end?” Taabur asked, referring to a repeating cycle of alliance with the Kurdish military, then betrayal. “Where is human rights? Why can’t we be free like all the other countries? We are afraid of another genocide.”

“Not too long ago, we defeated ISIS on behalf of the world,” he said, but now the world doesn’t care. “Unfortunately, this has been the story of the Kurds. We have this phrase, ‘no friends but the mountains.’”

Trump’s turnabout is generating new conversations among local Kurds, who are known to align with both Republicans and Democrats. Tayyar says that after President Trump took office, life remained stable for Kurds in Nashville. In this city of 670,000, one in six residents is foreign-born. Just last month, the first Muslim was elected to the Metro Council. But now, those who voted for Trump are feeling some heat. Tayyar mentions a Kurdish relative, as well as a close friend who is not Kurdish, whom he’s needled in recent days.

“I think it was a low blow to the Kurdish Republicans,” said Tayyar, who served on the board of the local Democratic party. “It was kind of like a stab in the back, even for him,” he said of his relative. “It didn’t have a good look for us as a group.”

Tabeer Taabur at an annual gathering of the Kurdish community in Nashville. (Courtesy Tabeer Taabur)

In addition to Nashville, other U.S. centers of the Kurdish diaspora include Dallas; San Diego; Moorhead, Minnesota; Harrisonburg, Virginia; New York, and Washington, DC. Although local Kurds say the Middle Tennessee climate and landscape are reminiscent of Kurdistan, and they enjoy Titans football, Predators hockey, and Centennial Park as much as anyone, these attractions are not why they first arrived in Nashville.

According to Holly Johnson, state coordinator of the Tennessee Office for Refugees, there is an accidental quality to where foreign asylees and refugees are resettled: it has to do with what locations have the ability and capacity to help them. But once a particular national or ethnic group becomes associated with a place, the population tends to grow, like the sizable Somali population in Minneapolis. “They go where they have friends and family, good jobs, affordable housing,” Johnson said.

According to the Kurdish Community Council, the first wave of Kurdish migrants arrived in Nashville “in the 1970s, after the collapse of a Kurdish uprising in Iraq. Countless others arrived after the first Gulf War as refugees. Recently, yet even more have fled Iraq after the War in Iraq.” In recent years, the largest groups of refugees in Tennessee have come from Congo, Bhutan and Myanmar, Johnson said. Trump has proposed that the U.S. admit a total of 18,000 refugees for the federal fiscal year, which began October 1, but that has not been finalized.

As for Trump’s supporters in Nashville, Tayyar says many whom he knows are struggling in light of what they see as the abandonment of the Kurds in Syria: “They’re torn between, do I still support this guy? —and also feeling really bad that everything turned out the way it did.”

CORRECTION: An earlier version of the story misstated the size of Nashville’s Kurdish population. Is is the largest in the United States.

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