2020 0 Sh Showcase case Michae hael J. Hicks, ks, Ph.D. D. - - PowerPoint PPT Presentation

I N D I A N A C O M M U N I T I E S I N S T I T U T E | B A L L S T A T E U N I V E R S I T Y

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | I N D I A N A C O M M U N I T I E S I N S T I T U T E B A L L S T A T E U N I V E R S I T Y

Bal all Sta l State e Un Univ iver ersity sity - Purd rdue e Jo Join int t EDA Un Univ iver ersi sity ty Cen enter er 2020 0 Sh Showcase case

Michae hael J. Hicks, ks, Ph.D. D.

Direct ector, Cent enter er for Bus usine iness and nd Economi nomic c Res Resea earch ch and nd George ge & F Fran ances ces Ball ll Distinguis inguishe hed Profes essor

Geoff f Scho homa macker

Proje ject ct Mana nage ger, , India iana na Commu munit nities ies Instit itute

David id Ter erre rell ll

Execut ecutiv ive Direct ector, , Indian iana Commun munit ities ies Instit itute

I N D I A N A C O M M U N I T I E S I N S T I T U T E | B A L L S T A T E U N I V E R S I T Y

The he Ball ll Sta State EDA Un Univ iver ersity sity Cent nter er Team am

Center er for Busin siness ss and Economic

• mic Rese

search

Michael Hicks Srikant Devaraj Dagney Faulk Victoria Meldrum Emily Wornell Seregow Graham Watson

Ind ndiana iana Commun munities ities Ins nstit titut ute

David Terrell Brian Blackford Candy Dodd Beth Neu Angie Popplewell Geoff Schomacker

Bow

• wen

en Center er for Publi blic c Affair airs

Charles Taylor

I N D I A N A C O M M U N I T I E S I N S T I T U T E | B A L L S T A T E U N I V E R S I T Y

Ov Over ervie view

Curre rent t COVID-19 19 Rela lated d Ac Activiti tivities Community Economic Development Academy Community Change Sessions Indiana Philanthropy Alliance

• Lt. Governor’s Rural Road to Recovery

COVID-19 Effects on Indiana’s State and Local Taxes Planned nned COVID-19 19-Rel elat ated ed Ac Activi ivitie ties s Courses/Tools Local Leadership Fiscal Management in a Crisis/Disaster Communications in a Crisis/Disaster Small Business Crisis Management Studies/Tools Comprehensive Wealth Framework County Revenue Impacts (Resiliency and Stress Test) Population and Employment Stability in a Long Recovery

I N D I A N A C O M M U N I T I E S I N S T I T U T E | B A L L S T A T E U N I V E R S I T Y

Com

• mmunity

unity Eco conom nomic ic De Developm lopment ent Acade Academy

Suite of courses and modules to address the current training needs of practitioners and policy makers in community economic development Regional Leader Certification Program Secret Recipe:

Start with the future students Engage multiple academic disciplines Bring in the practitioners Put them all in the classroom and stir

I N D I A N A C O M M U N I T I E S I N S T I T U T E | B A L L S T A T E U N I V E R S I T Y

Com

• mmunity

unity Eco conom nomic ic De Developm lopment ent Acade Academy

Suite of courses and modules to address the current training needs of practitioners and policy makers in community economic development

21st Century Economic Development Community Development Course Economic Development Basic Course Local Gov’t Finance Fundamentals Local Gov’t Finance Decision Making Organizational Leadership Administrative Management for Regional Organizations Project Management for Regional Organizations Decision Making Using Comprehensive Community Wealth Indicators Housing through the Current Community Economic Development Lens Asset Based Community Development in the 21st Century

I N D I A N A C O M M U N I T I E S I N S T I T U T E | B A L L S T A T E U N I V E R S I T Y

Com

• mmunity

unity Cha hang nge e

Ind ndiana iana Phila ilanth throp

• py

y Alliance liance/Lil /Lilly ly End ndowm wment ent

Consi side dera rati tion

• ns

s for for Community unity Change nge 1-day workshop: 15 counties County-Based Communi nity ty Devel elopm

• pment

nt 2.5 day course: 8 counties Commun munity ty Conversations sations/R /Read adine ness ss for for Change nge Report: 8 counties; multi- month effort Involved over 500 people in cutting edge community economic development education and planning activities

I N D I A N A C O M M U N I T I E S I N S T I T U T E | B A L L S T A T E U N I V E R S I T Y

• Lt. Governor’s

Rura ral l Roa

• ad

d to

• Reco

cover ery

Ball State and Purdue EDA University Center representatives appointed to task

• force. Our mission is to aid and inform the five state agencies in the Lt.

Governor’s portfolio as they update existing strategies and create new ones to respond to COVID-19, especially in rural Indiana. As part of this immediate response we conducted statewide focus groups of local elected officials, regional planning organizations, economic development officials, visitor bureau leaders, Main Street directors, community foundations, and rural health representatives to inform the State’s plans

 Office of Comm mmun unity ty and Ru Rura ral Affa fairs  Depa partm tmen ent t of Agri ricul ultur ure  Housi using and Comm mmun unity ty Dev evelop

• pme

ment t Author thority ty  Office of Broadba roadband d Oppor portun unitie ties  Office of Touri

• urism

sm Dev evel elop

• pme

ment t / Destin tinati ation

• n Dev

evel elop

• pme

ment t Corpo porati ration

I N D I A N A C O M M U N I T I E S I N S T I T U T E | B A L L S T A T E U N I V E R S I T Y

Pla lanned nned COVI VID-19 19-Relat elated ed Activities Activities

Local Resilienc ency y St Strateg egies es in Respon

• nse

e to COVID-19 19 A series of tools and training programs to help local officials respond to the challenges that

• ccur from natural and economic disasters – specifically this coronavirus pandemic, but also

as part of a larger agenda around resiliency in order to be better prepared for the next disaster including: Local Gove vernme nment nt Resiliency ency – building disaster response into all plans, immediate concerns, who to engage, disaster plan execution, tracking details – for example cost recovery documentation Disast ster/ er/Crisi risis Commu muni nicat ation

• ns – who, what, when, how, and why to message during a crisis

Crisis/Disas s/Disaster er Fiscal al Managem nagement nt –planning with contingencies, understanding and dealing with revenue shortfalls, where to engage for guidance and assistance Executi utive/ e/Small Small Busine ness s Owner ner Disaster er Respon

• nse

se - incorporating disaster into business plans, how to work with units of government during response and recovery, how to communicate during a crisis and recovery

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

Su Summer er 2020 0 Reg egional ional Res esil ilie iency ncy Work: rk: Revenu enue e St Stre ress ss and Regional Growth

Micha hael el J.

• J. Hicks,

ks, Ph. h.D.

Director and G George & F Frances Ball Distin ingui uish shed Profe fessor sor

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

Th This is Tal alk k

• County

ty Re Revenu enue e Impacts cts (Resi esilie liency ncy and Str Stress s Test) t)

• COVID

ID-19 9 ha has ha had larg rge e employment yment and nd Fisc scal al Ef Effects ts

• Signif

ific icant ant tax and economic mic differen ences ces challenge enge local budget develop elopme ment nt for FY21 and later

• Population

lation and nd Em Employme yment nt Sta Stability lity in n a l long ng Recover ery y

• Micro

ropolit politan an area study y (RWJF) WJF)

• Gro

rowt wth in jobs s and people le tied to p placema emakin king g success ss

• Amenities

nities yes, , but wh what typ ypes

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

A Medium um-Ter erm m Look k at COVID ID-19 Effects on Indiana’s State and Local l Taxes es (Faulk ulk, , Hicks ks and Devaraj) araj)

Figure 1, Five Economic Scenarios of Indiana GDP 2017-2021 ($2020)

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

Table e 4, State e Tax Losses Annually ually (belo low 2019 receip ipts ts, , $Million illions) 202 020

V-sha haped V-sha haped, w/ hang ngover Nike e Swoosh Rolle ler Coaster L-sha haped Sales Tax

• $114.8
• $169.9
• $261.7
• $192.8
• $330.5

Indiv ivid idual ual Income Tax

• $224.1
• $331.7
• $511.0
• $376.5
• $645.4

Corporat ate Incom

• me Tax
• $65.2
• $96.5
• $148.6
• $109.5
• $187.7

Riverboat

• at and Racin

ino Wage gerin ing

• $142.2
• $206.9
• $310.3
• $232.7
• $396.5

Other

• $77.0
• $114.0
• $175.6
• $129.4
• $221.8

Total l

• $623.3
• $918.9
• $1,407.2
• $1,040.9
• $1,782.0

Percent nt below w 2019 levels ls

• 3.8%
• 5.6%
• 8.6%
• 6.3%
• 10.9%

2021

V-sha haped V-sha haped, w/ hang ngover Nike e Swoosh Rolle ler Coaster L-sha haped Sales Tax $91.8 $68.9 $91.8

• $91.8

$36.7 Indiv ivid idual ual Income Tax $179.3 $134.5 $179.3

• $179.3

$71.7 Corporat ate Incom

• me Tax

$52.1 $39.1 $52.1

• $52.1

$20.9 Riverboat

• at and Racin

ino Wage gerin ing $129.3 $97.0 $129.3

• $112.1

$129.3 Other $61.6 $46.2 $61.6

• $61.6

$24.6 Total l

• $109.1
• $533.2
• $893.0
• $1,537.8
• $1,498.8

Percent nt below w 2019 levels ls

• 0.7%
• 3.3%
• 5.4%
• 9.4%
• 9.1%

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

Table e 5, Tot

• tal

al County tywid ide e Tax Reven venue e Losses (below 2019 receip ipts ts, , $millions illions) 2020

V-sha haped V-sha haped, w/ hang ngover Nike e Swoosh Rolle ler Coaster L-sha haped Local al Income Taxes

• $92.53
• $136.95
• $210.97
• $155.45
• $266.49

Innk nkeeper's 's Tax

• $26.09
• $38.51
• $59.63
• $43.48
• $74.54

Food & Beverag age Taxes

• $21.80
• $32.19
• $49.84
• $36.34
• $62.30

Casino ino

• $66.64
• $96.93
• $145.40
• $109.05
• $185.78

Vehic icle Excis ise Taxes

• $39.66
• $58.70
• $90.43
• $66.63
• $114.22

Total

• $246.73
• $363.28
• $556.27
• $410.95
• $703.34

Percent nt of Total l Tax Revenue nues

• 2.4%
• 3.5%
• 5.3%
• 3.9%
• 6.8%

2021

V-sha haped V-sha haped, w/ hang ngover Nike e Swoosh Rolle ler Coaster L-sha haped Local al Income Taxes

• $18.51
• $81.43
• $136.95
• $229.48
• $236.88

Innk nkeeper's 's Tax

• $3.73
• $21.74
• $37.27
• $64.60
• $52.18

Food and Beverag age Taxes

• $3.11
• $18.17
• $31.15
• $53.99
• $43.61

Casino ino

• $6.06
• $51.49
• $84.81
• $161.55
• $125.20

Vehic icle Excis ise Taxes

• $7.93
• $34.90
• $58.70
• $98.36
• $101.53

Total

• $39.34
• $207.74
• $348.88
• $607.98
• $559.40

Percent nt of Total l Tax Revenue nues

• 0.4%

4%

• 2.0%

0%

• 3.4%

4%

• 5.8%

8%

• 5.4%

4%

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

• For calendar year 2020, we expect tax losses to range from 3.8 percent

to 10.9 percent of 2019 total revenues for the state of Indiana.

• In 2021, we anticipate tax revenues will still range from 0.7 percent to

9.4 percent beneath those of 2019.

• Our estimates show tax revenue losses for all local governments that

range from $240 million to $700 million in 2020.

• By the end of 2021, we anticipate tax revenues will rebound, but still

remain beneath the 2019 levels.

• Individual county experiences vary profoundly. In 2020, we anticipate

county-level revenue losses to range from less than 1 percent of total tax revenue to more than 48 percent of total tax revenues.

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

Ou Our r Mi Micr crop

• poli
• litan

tan focuse

• cused

d stu tudy dy

(W (Wein einst stein, ein, Wor

• rnell

nell & & Hic icks) ks)

• Households are willing to pay higher housing

prices and forego higher wages to live in areas with a high quality of life (Rosen, 1979; Roback, 1982; Albouy, 2011)

• Firms also pay a premium (𝜄) to locate in more

productive places (Beeson and Eberts, 1987; Gabriel and Rosenthal, 2004)

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

This is is is how it it works ks out t . . . . . . but onl nly y for r Met Metro Are reas as (no no in indiv ividu idual al dat ata a for r no non-metr tro

• pla

laces) ces)

High Productivity: Great place to work and live High Amenity: Great place to live Low Amenity: Great place to work Low Productivity: Not great to live

• r work

Low Wages High Wages High Rents San Diego, CA San Jose, CA Denver, CO New York, NY Portland, OR Seattle, WA Miami, FL Chicago, IL Fort Lauderdale, FL Washington DC Low Rents Kansas City, MO Cleveland, OH Tampa, FL Cincinnati, OH Phoenix, AZ Pittsburgh, PA Salt Lake City, UT Philadelphia, PA New Orleans, LA Atlanta, GA

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

We us use e ag aggr gregat egate e dat ata a an and co compa mpare re ou

• ur metro

metro est stima imates es to p

• previous

vious st studies dies . . . It . . . It wor

• rks

ks

• Use aggregate (county level - 𝑘) measures of average

wages (average characteristics of the population – e.g. average education) log 𝑠

𝑘

= 𝛽𝑠 + 𝛾𝑠𝑌

𝑘 𝑠 + 𝜄 𝑘 𝑠

log 𝑥

𝑘

= 𝛽𝑥 + 𝛾𝑥𝑌

𝑘 𝑥 + 𝜄 𝑘 𝑥

• 𝜄

𝑘 𝑠 is the residual term (what we can’t explain about why

housing prices are higher or lower in 𝑘)

• 𝜄

𝑘 𝑥 is the residual term (what we can’t explain about why

wages are higher or lower in 𝑘) ෣ 𝑅𝑃𝑀 = ෠ 𝜄

𝑘 𝑠 − ෠

𝜄

𝑘 𝑥

෣ 𝑅𝑃𝐶𝐹 = ෠ 𝜄

𝑘 𝑠 + ෠

𝜄

𝑘 𝑥

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

Qu Quality ality of

• f Li

Life e (QO QOL) L) 20 2010

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

Hi High gh Amen enity ity Gre reat at Pla laces es to Liv ive e (μSA) SA)

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

Hi High Prod roductiv uctivity ity Gre reat t Place ce of Live ve and d Work rk (μSA SA)

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

Lo Low w Am Amenity enity Great eat Place lace to W

• Work
• rk (μSA)

SA)

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

Lo Low w Productivity Productivity Not t Great eat to Li

• Live

e or

• r Work
• rk (μSA

SA)

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

Peo eople ple Mo Move e to

• Hi

High gh QO QOL L Micropo icropolitan litan Ar Areas eas

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

But ut Not t to Hi

• High

gh QOB QOBE E Ar Areas eas

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

Jo Job Growth wth is is al also so Hi Highe gher r in in Hi High gh QOL QOL Ar Areas eas

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

But ut Not

• t in Hi

High gh QO QOBE E Ar Areas eas

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

Com

• mprehe

prehensiv nsive e test st of

• f am

amenities ities (~ (~500) 500)

• Plenty of policy guidance as our preliminary

results suggest. . .

0.0254*** 6.6583*** 0.0131** (0.0062) (1.5855) (0.0058)

• 0.0711***
• 0.0007***
• 0.0258***

(0.0138) (0.0002) (0.0099) 0.0001**

• 0.0724*
• 0.0039*

(0.0000) (0.0399) (0.0021)

• 1.2494***
• 0.0033**

0.0431* (0.2225) (0.0014) (0.0254)

• 0.0001**

0.1185*** 0.0551*** (0.0001) (0.0173) (0.0152) Work from Home Food Stores Worship Places Eat/Drink Places Arts/Culture Recreation Public Amenities Private Amenities School Spending Violent Crime Rate Physically Unhealthy Days Distance to Metro January Temp July Temp Hilliness Forest Coverage Federal Land Natural Amenities

C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y C E N T E R F O R B U S I N E S S A N D E C O N O M I C R E S E A R C H | B A L L S T A T E U N I V E R S I T Y

David id Terrell ll Executive Director Indiana Communities Institute drterrell@bsu.edu www.bsu.edu/ici Michael el Hicks ks, , Ph.D. D. Director Center for Business and Economic Research mhicks@bsu.edu www.bsu.edu/cber Geoff Schomac acker Project Manager Indiana Communities Institute gbschomacker@bsu.edu