Do you believe the role of government is to create jobs?
Last month the LA Times reported that “the often volatile unemployment rate dropped to 11% from March’s 11.2%, the Golden State still lost 63,700 jobs during the month. The number of people seeking work has swelled by 842,800 from a year ago, the state Employment Development Department reported Friday.”
With that data in mind I have just read the Public Policy Institute of CA, PPIC, May 2009 report entitled “Economic Development: The Local Perspective” which begs the question as to the role of government.
On page 12 of the study, under the heading “The Local “Obsessions” with tax Base and Retail Development,” the PPIC analysts state that “it is clear that local officials wished that the state public finance system had less influence on local governments, particularly in terms of the state’s hand in creating a tax system that, in the view of many local officials, distorts local development policies. Many local officials complain of the way the state has managed the design of the public finance system; in the words of one, “The chase for sales tax has been a factor in driving out manufacturing jobs in California.” That there is a general preoccupation with enhancing the retail and tax base in born out by data in the study.”
Reading further, on page 13, it reports that “our study provides strong survey evidence that local officials favor some kinds of development over others. When asked about the relative importance of retaining existing businesses, 57 percent of ther respondents indicated that retaining existing businesses was the most important goal in the community, while only 8 percent indicated that incubating and nurturing new businesses was the most important economic development priority.
When asked to rate how important reducing unemployment was as an economic development goal, 49 percent of city officials rated it important and 19 percent rated it very important. On the other hand 17 percent of respondents indicated that improving the local tax base was important, with 62 percent indicating that it is very important.
If the state’s goal is to encourage local officials to deal with unemployment or pursue or nurture new businesses, the data suggests that local officials do not see these goals as top priorities, particularly in the conflict with tax base enhancement.”
As the PPIC grants permission to copy a few paragraphs, and to stay on topic, I will not go deeper into their analysis other than to say that a link to this entire report is furnished below.
http://www.ppic.org/main/publication.asp?i=787
Special thank you to Max Neiman, Daniel Krimm, and the PPIC for their report
Gilbert commentary. What is evident is the struggle faced by local government agencies to stay afloat. According to the PPIC survey they do not place a high priority on helping CA residents, currently out of jobs, get back into the ranks of the employed.
The PPIC study paints a picture of city leaders lacking compassion for those out of work by their placing a higher emphasis on the local tax base. I respectfully disagree. Local officials have a responsibility to make sure that their city has the funds necessary to provide for our public safety. That umbrella includes local police and fire protection, maintenance of our infrastructure, buildings, streets and parks, street lights and anything else related to public safety. While they should also work to “sustain, retain, and gain” business to fund those necessary obligations, I do not recall ever being told that a role of government is to create jobs. That task is best accomplished by the private sector.
As I opened with a comment on our unemployment figures, let me close with the following statement. If you thought that president Bush 43 expanded the size of our federal government I hope you have fastened your seat belts. president Obama has been quoted to say that his recovery plan includes creation of 600,000 government jobs in the next 100 days.
Juice readers. Do you believe the role of government is to create jobs?
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