IBJOpinion

WEIGAND: Reinvesting in neighborhoods is essential

Kurt Wiegand
July 31, 2010
Keywords
Back to TopCommentsE-mailPrintBookmark and Share

Kurt ViegandOur city is about to engage in a high-stakes gamble to avert a death spiral—or accelerate it and make it much more of a certainty.

A death spiral is a deteriorating financial situation where short-term decisions preclude future opportunities in a way that’s self-reinforcing. A classic business example is a company that cuts funding for research and development and falls behind in innovation. Customers switch to a competitor, leaving even less money for the company to invest in competitive new products.

Cities can face a similar scenario when confronted with a significant economic shift. To compensate, leaders increase tax rates while services and conditions—such as crime, schools and roads—deteriorate. Residents who have a choice (mostly upper- and middle-class) move to safe havens outside the city limits. The result is a soaring demand for public services and a deteriorating tax base from which to fund them. As conditions worsen and costs increase, businesses follow their customers and employees out of the city—and the cycle begins anew.

Indianapolis has been fighting just such a situation for decades. The trigger was the loss of manufacturing jobs and the flight that came with school desegregation. The death spiral was almost averted with the redevelopment of the downtown core, recruitment of professional sports teams, preservation of historic neighborhoods, etc. However, we largely ignored schools, we didn’t do enough with the neighborhoods, and we literally and figuratively paved the way to the surrounding counties.

Although the wealth has been moving to the surrounding counties, Marion County continues to shoulder the cost of ever-larger regional facilities such as sports stadiums, medical facilities, government offices and not-for-profits.

Our leaders have kept the city afloat by deferring investment in infrastructure and refinancing debt. We currently face at least $4.5 billion in deferred infrastructure costs and we are paying on debt for stadiums that no longer exist. Most discretionary operating expenses were cut years ago. We are now seeing parks, schools, libraries and bus systems shutting down.

That’s not to say there isn’t waste and inefficiency; there most certainly is—but it looks different now. Whereas it used to look like a couple of guys making $20 an hour leaning on a shovel at a patronage job, it now looks like very-well-connected people in suits billing $540 an hour. The city requires an increasing number of expensive attorneys, PR firms and consultants—as well as spiraling debt service and taxpayer subsidies to private businesses—to keep all the balls in the air. This leaves even less money to trickle down to basic services such as buses, streets and libraries.

Our current financial glide path is simply not sustainable.

I’m no fan of Mayor Greg Ballard’s plan to fund infrastructure needs through our water bill; it’s terrible economic policy. That said, it should be understood as a high-stakes gamble: If that money is sharply focused to redevelop vacant and underutilized property and attract middle-class residents back to Marion County, we can avoid the fate that has befallen other cities such as Detroit.

Detroit is in the unenviable position of having to “right-size.” That’s a polite way to say it is performing self-administered amputations of entire neighborhoods in a last-ditch effort to keep gangrenous disinvestment from killing the entire city.

However, if the proceeds from the transfer of the water company are used to prolong the status quo, as is being suggested—by plugging holes in the city budget, giving more taxpayer subsidies to private businesses and sports teams, financing infrastructure that will last 15 years with 30-year bonds, and currying political favor—our fate will be sealed. The great sucking sound that you will hear will be the exodus of more middle-class residents and businesses from Marion County because of excessive water and sewer rates—and the sound of the vortex of a death spiral.•

__________

Wiegand is information technology director for a local company. He sits on the steering committee for the Emerson Avenue Corridor Gateway Project and is active in his Emerson Heights neighborhood on the east side. He previously spent eight years at Eastside Community Investments, a neighborhood development organization.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Of what value is selling alcoholic beverages to State Fair patrons when there are many families with children attending. Is this the message we want to give children attending and participating in the Fair, another venue with alooholic consumption onsite. Is this to promote beer and wine production in the state which are great for the breweries and wineries, but where does this end up 10-15 years from now, lots more drinkers for the alcoholic contents. If these drinks are so important, why not remove the alcohol content and the flavor and drink itself similar to soft drinks would be the novelty, not the alcoholic content and its affects on the drinker. There is no social or material benefit from drinking alcoholic beverages, mostly people want to get slightly or highly drunk.

  2. I did;nt know anyone in Indiana could count- WHY did they NOT SAY just HOW this would be enforced? Because it WON;T! NOW- with that said- BIG BROTHER is ALIVE in this Article-why take any comment if it won't appease YOU PEOPLE- that's NOT American- with EVERYTHING you indicated is NOT said-I can see WHY it say's o Comments- YOU are COMMIES- BIG BROTHER and most likely- voted for Obama!

  3. In Europe there are schools for hairdressing but you don't get a license afterwards but you are required to assist in turkey and Italy its 7 years in japan it's 10 years England 2 so these people who assist know how to do hair their not just anybody and if your an owner and you hire someone with no experience then ur an idiot I've known stylist from different countries with no license but they are professional clean and safe they have no license but they have experience a license doesn't mean anything look at all the bad hairdressers in the world that have fried peoples hair okay but they have a license doesn't make them a professional at their job I think they should get rid of it because stateboard robs stylist and owners and they fine you for the dumbest f***ing things oh ur license isn't displayed 100$ oh ur wearing open toe shoes fine, oh there's ONE HAIR IN UR BRUSH that's a fine it's like really? So I think they need to go or ease up on their regulations because their too strict

  4. Exciting times in Carmel.

  5. Twenty years ago when we moved to Indy I was a stay at home mom and knew not very many people.WIBC was my family and friends for the most part. It was informative, civil, and humerous with Dave the KING. Terri, Jeff, Stever, Big Joe, Matt, Pat and Crumie. I loved them all, and they seemed to love each other. I didn't mind Greg Garrison, but I was not a Rush fan. NOW I can't stand Chicks and all their giggly opinions. Tony Katz is to abrasive that early in the morning(or really any time). I will tune in on Saturday morning for the usual fun and priceless information from Pat and Crumie, mornings it will be 90.1

ADVERTISEMENT