Davenport Promise No

8/14/2019 Davenport Promise No

1/42

Davenport Promise?Davenport Promise?

.. . a high level of. a high level of

uncertainty clouds theuncertainty clouds thefiscal impact estimates offiscal impact estimates of

the Promise.the Promise.W.E. Upjohn Institute AnalysisW.E. Upjohn Institute Analysis

Commission by City for $13,000+Commission by City for $13,000+


2/42


3/42

Where is the problem?Where is the problem?

Population is growingPopulation is growing

Employment was growingEmployment was growing

and is now stable compared to other areasand is now stable compared to other areas

Home values are stableHome values are stableespecially compared to other areasespecially compared to other areas

Quad Cities are Very LivableQuad Cities are Very Livable

And Very Affordable!And Very Affordable!

The stars seem to be more aligned in favor of your region.The stars seem to be more aligned in favor of your region.Dave Swenson, an economist at Iowa State UniversityDave Swenson, an economist at Iowa State University


4/42

There is no crisis,There is no crisis,

so why?so why?

We have to do SomethingWe have to do Something

This is NOT a reasoned argument.This is NOT a reasoned argument.


5/42

Providing for college educationProviding for college education

is not the Citys responsibility!is not the Citys responsibility!

The Upjohn Study:The Upjohn Study:

Page 29: "...many believe that [Promise] is outside of a city'sPage 29: "...many believe that [Promise] is outside of a city's

responsibilitiesresponsibilities

No other city provides this service using tax dollars!!!No other city provides this service using tax dollars!!!

Creates an entitlement programCreates an entitlement program

at theat the municipalmunici

pal level.level.


6/42

Where is the connectionWhere is the connection

between the source and usebetween the source and use

of the funds?of the funds?

Property taxes police and fireProperty taxes police and fire

Road Use and Gas Taxes StreetsRoad Use and Gas Taxes Streets Fees for servicesFees for services

Sewer and Inspections FeesSewer and Inspections Fees

Sales taxes Education?????Sales taxes Education?????Non residents pay a sizable portion of sales taxesNon residents pay a sizable portion of sales taxes

Low income residents pay a higher percentage of income in sales taxesLow income residents pay a higher percentage of income in sales taxes


7/42

Doing somethingDoing something

vs.vs.

Doing some good.Doing some good.

SoSo WHOWHOdoes this potentially help??does this potentially help??

Davenport Schools???Davenport Schools???Students???Students???

City of Davenport???City of Davenport???


8/42

Davenport Community School Funding.Davenport Community School Funding.

There has beenThere has been NONO drop in funding per pupildrop in funding per pupil..per pupil revenue has consistently increased, and will continue to increase!per pupil revenue has consistently increased, and will continue to increase!

property tax revenue received by the District has consistently grown!property tax revenue received by the District has consistently grown!

increases in the tax rate and increases in assessed value.increases in the tax rate and increases in assessed value.

Changes in overall school district revenue areChanges in overall school district revenue aredirectly related to enrollment.directly related to enrollment.Appropriate, realistic market response to the quality of education provided.Appropriate, realistic market response to the quality of education provided.

Private schools are full and growing.Private schools are full and growing.

Home schooling is increasing.Home schooling is increasing.Outward bound open enrollment is still attractive to parents.Outward bound open enrollment is still attractive to parents.

We believe any returnees would be offset by new open enrollment.We believe any returnees would be offset by new open enrollment.


9/42

Other solutions for Davenport Students.Other solutions for Davenport Students.

Increased fundingIncreased funding

has NOT correlatedhas NOT correlated

to improved student performance.to improved student performance.

Throwing money at the problemThrowing money at the problemhas NOT worked!has NOT worked!


10/42

Solutions for Davenport StudentsSolutions for Davenport Students

Market driven solutions HAVE worked!Market driven solutions HAVE worked!

Charter Schools.Charter Schools.

Merit Pay for teachers.Merit Pay for teachers.Both are supported by President Obama's Education Secretary.Both are supported by President Obama's Education Secretary.

Stimulate competition - Increase education tax credit.Stimulate competition - Increase education tax credit.

This has worked in inner city Milwaukee and Cleveland.This has worked in inner city Milwaukee and Cleveland.


11/42

If education is ever going to witnessIf education is ever going to witness

the stunning progress weve seen in other fieldsthe stunning progress weve seen in other fields

over the past hundred years,over the past hundred years,were going to have to organize it the same way we organizewere going to have to organize it the same way we organize

the rest of the our economy,the rest of the our economy,

as a free, parent-driven marketplace.as a free, parent-driven marketplace.

Andrew Coulson, DirectorAndrew Coulson, Director

Center for Educational FreedomCenter for Educational Freedom

Cato InstituteCato Institute

Davenport SchoolsDavenport Schools

No Risk No Accountability!No Risk No Accountability!


12/42

Which Students will benefit?Which Students will benefit?

Low to Moderate Income Families?Low to Moderate Income Families?

more than adequate financial aid sources available formore than adequate financial aid sources available forlow/moderate income studentslow/moderate income students

who are qualified, and equipped for a college education.who are qualified, and equipped for a college education.

No Benefit!No Benefit!


13/42

Middle Class Families?Middle Class Families?

it is not clear if the Promise Funds would offsetit is not clear if the Promise Funds would offsetother financial aid available,other financial aid available,

likely to result in cost shifting from existing aidlikely to result in cost shifting from existing aidsources to the city of Davenport,sources to the city of Davenport,

without improving the students financialwithout improving the students financialsituation.situation.

No Benefit!No Benefit!


14/42

High Income Families?High Income Families?

The only group of students that would financially benefit from theThe only group of students that would financially benefit from thePromise Program are higher income family that do not qualify for anyPromise Program are higher income family that do not qualify for anyother aid, but would make use of the Promise stipend.other aid, but would make use of the Promise stipend.

With retail based sales taxes being highly regressive,With retail based sales taxes being highly regressive,

(lower income families paying a larger share of their income in sales taxes)(lower income families paying a larger share of their income in sales taxes)this becomes a high income family subsidy.this becomes a high income family subsidy.

Unneeded Benefit!Unneeded Benefit!


15/42

Doing SomethingDoing Something

NOT Equal to Doing GoodNOT Equal to Doing Good

Davenport Schools will not improve.Davenport Schools will not improve.

Davenport Schools will not perform any better with 1 new student orDavenport Schools will not perform any better with 1 new student or

1,000 new students.1,000 new students.

Students most will not benefit.Students most will not benefit.

Why would we want to take tax dollars that low income residents payWhy would we want to take tax dollars that low income residents pay

more of their income for to give benefits that only high income familiesmore of their income for to give benefits that only high income families

are sure to use?are sure to use?

City of Davenport Taxpayers take all the risk!City of Davenport Taxpayers take all the risk!

And get questionable upside gains.And get questionable upside gains.


16/42

The Citys Upjohn StudyThe Citys Upjohn Study

acknowledges the risks!acknowledges the risks!

From the W.E. Upjohn Institute Analysis:From the W.E. Upjohn Institute Analysis:

If this proves to be overly optimistic, it would have aIf this proves to be overly optimistic, it would have a

significant negative impact to the city.significant negative impact to the city.

. . . a high level of uncertainty clouds the fiscal impact. . . a high level of uncertainty clouds the fiscal impact

estimates of the Promise.estimates of the Promise.

The positive impact that we expected will be diminishedThe positive impact that we expected will be diminishedbecause of this possible severe economic downturn.because of this possible severe economic downturn.

From an interview with George Erickcek, author of the Davenport Promise analysis,From an interview with George Erickcek, author of the Davenport Promise analysis,

published in the River Cities Reader (11/08)published in the River Cities Reader (11/08)


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What Will TheseWhat Will These Risks Mean toRisks Mean to

You?You? Future Tax Increases are all but guaranteedFuture Tax Increases are all but guaranteed

First year is covered by project delays, what about Years 2 -15?First year is covered by project delays, what about Years 2 -15? Instability in Sales Tax Revenue, doesnt increase at rate of inflation.Instability in Sales Tax Revenue, doesnt increase at rate of inflation. Potential for declines during economic downturns, would require funds from other sources.Potential for declines during economic downturns, would require funds from other sources. Loss of sales tax revenue will require funding from other sources for capital items or. . .Loss of sales tax revenue will require funding from other sources for capital items or. . .

Infrastructure improvements wont happenInfrastructure improvements wont happen Streets continue to deteriorate.Streets continue to deteriorate. Continued sewer problems remain unresolved.Continued sewer problems remain unresolved. Highly promoted upgrades to Riverfront delayed.Highly promoted upgrades to Riverfront delayed.

Bond Rating may declineBond Rating may decline Sales Tax funds used to retire debts for Capital Improvements.Sales Tax funds used to retire debts for Capital Improvements. Lower rating, higher interest, fewer funds for projects.Lower rating, higher interest, fewer funds for projects. Debt Levy has no cap and can be increased.Debt Levy has no cap and can be increased.


18/42

Citys W.E. Upjohn Institute StudyCitys W.E. Upjohn Institute Study

Three major inaccuracies!Three major inaccuracies!

1.1. Projection of population decrease contrary toProjection of population decrease contrary tohistorical evidence.historical evidence.

2.2. Inflation Projections dont reflect historicalInflation Projections dont reflect historicalevidence.evidence.

3. Second year increase in enrollment projected to3. Second year increase in enrollment projected tooutperform historical evidence.outperform historical evidence.


19/42

Problem #1Problem #1

Population Projections - Wrong!Population Projections - Wrong!

Page 3 of the report:Page 3 of the report:

If the city does not pursue the DavenportIf the city does not pursue the Davenport

Promise or any other program that is designedPromise or any other program that is designedto attract residents into the city, it will likelyto attract residents into the city, it will likelycontinue its modest level of populationcontinue its modest level of populationdeclinedecline..

What??What??


20/42

Several taxpayer funded programs already in place.Several taxpayer funded programs already in place.

River RenaissanceRiver Renaissance Prairie HeightsPrairie Heights Centennial ParkCentennial Park 100 Homes, Happen100 Homes, Happen

D-1 InitiativeD-1 Initiative Eastern Iowa Industrial ParkEastern Iowa Industrial Park

How well are these working?How well are these working? Population isnt declining!Population isnt declining!


21/42

Historical Population GrowthHistorical Population Growth

DavenportDavenport QCMetro:QCMetro:

2000 Total Population2000 Total Population 98,35998,359 376,019376,019

2008 Total Population2008 Total Population 100,312100,312 380,703380,7032013 Total Population2013 Total Population 102,264102,264 384,365384,365

2008 - 2013 Annual Rate2008 - 2013 Annual Rate 0.39%0.39% 0.19%0.19%

Source: U.S. Bureau of the Census, 2000 Census of Population and Housing.Source: U.S. Bureau of the Census, 2000 Census of Population and Housing.

ESRI forecasts for 2008 and 2013.ESRI forecasts for 2008 and 2013.


22/42

December 3, 2008 Quad City Times:December 3, 2008 Quad City Times:

Im skepticalIm skepticalof (the reports) conclusion, saidof (the reports) conclusion, saidDave Swenson, an economist at Iowa StateDave Swenson, an economist at Iowa StateUniversity. What you are basically saying is youUniversity. What you are basically saying is you

would suffer a net population loss of 400 persons perwould suffer a net population loss of 400 persons peryear. Short of some sort of a major industrialyear. Short of some sort of a major industrialrestructuring or overall change in your regionalrestructuring or overall change in your regionaleconomic fabric, I wouldnt expect that to happen.economic fabric, I wouldnt expect that to happen.

To the contrary, your area is growing.To the contrary, your area is growing.The stars seem to be more aligned in favor of yourThe stars seem to be more aligned in favor of yourregion.region.


23/42


Inflation and Tuition Projections - Wrong!Inflation and Tuition Projections - Wrong!

From Page 3 of the report:From Page 3 of the report:

"The annual inflation rate during the period is 2.5 %.""The annual inflation rate during the period is 2.5 %."

Also, on Page 3:Also, on Page 3:

"College tuition will increase at a rate that is no faster than inflation [i.e."College tuition will increase at a rate that is no faster than inflation [i.e.

2.5%].2.5%].

Again on Page 3:Again on Page 3:

"If tuition costs do outpace inflation, this will"If tuition costs do outpace inflation, this willlower the impactlower the impactof theof theDavenport Promise in drawing new residents into the city.Davenport Promise in drawing new residents into the city.

How Wrong Are They?How Wrong Are They?


24/42

Historical Increase in TuitionHistorical Increase in TuitionUniversity of Iowa Tuition RatesUniversity of Iowa Tuition Rates

12 credits of more Liberal Arts and Sciences12 credits of more Liberal Arts and Sciences

2009/2010:2009/2010: $6,824 ( 4.27 %)*$6,824 ( 4.27 %)*

2008/2009:2008/2009: $6,544 ( 3.99 %)$6,544 ( 3.99 %)

2007/2008:2007/2008: $6,293 ( 2.57 %)$6,293 ( 2.57 %)

2006/2007:2006/2007: $6,135 ( 9.31 %)$6,135 ( 9.31 %)2005/2006:2005/2006: $5,612 ( 4.00 %)$5,612 ( 4.00 %)

2004/2005:2004/2005: $5,396 ( 8.07 %)$5,396 ( 8.07 %)

2003/2004:2003/2004: $4,993 (19.13 %)$4,993 (19.13 %)

2002/2003:2002/2003: $4,191 (18.99 %)$4,191 (18.99 %)

2001/2002:2001/2002: $3,522 ( 9.92 %)$3,522 ( 9.92 %)

2000/2001:2000/2001: $3,204$3,204

*projected*projected


25/42

City: Make Funding AdjustmentsCity: Make Funding Adjustments

Changing theChanging the

benefit levelbenefit levelis NOTis NOT

a Promise.a Promise.


26/42


2nd Year Enrollment Projection - Wrong!2nd Year Enrollment Projection - Wrong!

From Page 5:From Page 5:

"The decline in the rate of new enrollments during the second and subsequent years after the"The decline in the rate of new enrollments during the second and subsequent years after theenactment of the Promise may be greater than we forecast...If Davenport follows Kalamazoo,enactment of the Promise may be greater than we forecast...If Davenport follows Kalamazoo,the fiscal impact of the program will worsen.the fiscal impact of the program will worsen.


"The enrollment impact of the Kalamazoo Promise fell off dramatically after the first year,"The enrollment impact of the Kalamazoo Promise fell off dramatically after the first year,dropping 90 percent."dropping 90 percent."


"...Kalamazoo witnessed a 90 percent drop in the number of new enrollments in the second"...Kalamazoo witnessed a 90 percent drop in the number of new enrollments in the secondyear...dissatisfaction with the Kalamazoo Public Schools, or the lack of employmentyear...dissatisfaction with the Kalamazoo Public Schools, or the lack of employmentopportunities in a sluggish regional economy may all play a part for this dramatic decline inopportunities in a sluggish regional economy may all play a part for this dramatic decline innew enrollments."new enrollments."

"...if this [a second-year 60% decline in enrollments] proves to be overly optimistic, and the"...if this [a second-year 60% decline in enrollments] proves to be overly optimistic, and thefall-off rate is higher, it would have a significant negative fiscal impact to the city."fall-off rate is higher, it would have a significant negative fiscal impact to the city."


27/42

It is unreasonable to expectIt is unreasonable to expect

that the Davenport programthat the Davenport programwill outperform Kalamazoowill outperform Kalamazoo..


28/42

Variable Population & Enrollment RatesVariable Population & Enrollment Rates

were tested in the study!were tested in the study!

If this proves to be overlyIf this proves to be overly

optimistic, it would have aoptimistic, it would have a

significant negative impactsignificant negative impact

to the city.to the city.W.E. Upjohn Institute AnalysisW.E. Upjohn Institute Analysis


29/42

And Taxpayers absorbAnd Taxpayers absorb

ALLALL the Costs!the Costs! At best 7 years, and projected up to 25 yearsAt best 7 years, and projected up to 25 years

of losses!of losses!

Projections beyond 5 years are questionable inProjections beyond 5 years are questionable ina good market.a good market.

No projections on what level of return, ifNo projections on what level of return, ifany, will result from this investment.any, will result from this investment.


30/42

Promise Never Breaks Even!

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9Year 10

High Impact -

Middle Impac

Low Impact -

Annual Cost to Citizens of Da


31/42

Additional Questionable AssumptionsAdditional Questionable Assumptions..

Projected Jobs GrowthProjected Jobs GrowthIncrease in jobs due to the Promise, projected at 185 to 212 jobs by 2018 would be in retail and eating and drinkingIncrease in jobs due to the Promise, projected at 185 to 212 jobs by 2018 would be in retail and eating and drinkingestablishments. Page 20: "Employment would increase...most of these jobs will be in retail eating and drinking places.establishments. Page 20: "Employment would increase...most of these jobs will be in retail eating and drinking places.

Is this the kind of jobs growth we want?Is this the kind of jobs growth we want?

Increasing Property ValuesIncreasing Property ValuesFiscal benefits to Davenport, if any, are heavily dependent on the Promise Program creating an increase in property values inFiscal benefits to Davenport, if any, are heavily dependent on the Promise Program creating an increase in property values inthe city. Project property values increasing at the rate of population growth.the city. Project property values increasing at the rate of population growth.

Projections of property value increases subjective with current economy!Projections of property value increases subjective with current economy!

Educated WorkforceEducated WorkforceThe need for an educated workforce is noted several times in the rational to support this program.The need for an educated workforce is noted several times in the rational to support this program.

Is it reasonable to expect students to return to Davenport?Is it reasonable to expect students to return to Davenport?


32/42

Upjohn ConclusionsUpjohn Conclusions

Clouded by severe market uncertainty.Clouded by severe market uncertainty.

Based on unsupported assumptions.Based on unsupported assumptions.

Inadequate variable testing.Inadequate variable testing.

The W.E. Upjohn Institutes report --The W.E. Upjohn Institutes report --

NOT a reasonable basisNOT a reasonable basisfor supporting the Promise!for supporting the Promise!


33/42

Public Safety Stop Pandering!Public Safety Stop Pandering!

Completely Separate issueCompletely Separate issue

Was turned down by council earlierWas turned down by council earlier

Addition is political and manipulativeAddition is political and manipulative Bring this issue back in November,Bring this issue back in November,

separate from the Promise programseparate from the Promise program

No PromiseNo Promise of NEW public safety funding.of NEW public safety funding.

We applaud the alderman that wanted to make this a separate issue!We applaud the alderman that wanted to make this a separate issue!


34/42

Tax Freezes More Pandering!Tax Freezes More Pandering!

Very limited # of participants.Very limited # of participants.

Less than 700 households eligibleLess than 700 households eligible

Only available for household incomes below $20,000/year.Only available for household incomes below $20,000/year.

Applicable to only the city taxes.Applicable to only the city taxes.

Benefits are very modestBenefits are very modest

Sound bites over substanceSound bites over substance..


35/42

Real Problems Real SolutionsReal Problems Real Solutions

Largest Impediment to GrowthLargest Impediment to Growth

= High Taxes!!= High Taxes!!

IA - worlds highest corporate tax rateIA - worlds highest corporate tax rate Tax Education Foundation (Tax Education Foundation (

http://www.taxeducationfoundation.org/briefs/2008-05.htmhttp://www.taxeducationfoundation.org/briefs/2008-05.htm))

Davenport - highest property taxes in QC RegionDavenport - highest property taxes in QC Region Over 10% higher than any neighboring area (IA or IL).Over 10% higher than any neighboring area (IA or IL).

Levy has increased at faster rate than all but two area.Levy has increased at faster rate than all but two area.
http://www.taxeducationfoundation.org/briefs/2008-05.htmhttp://www.taxeducationfoundation.org/briefs/2008-05.htmhttp://www.taxeducationfoundation.org/briefs/2008-05.htm


36/42

Largest Impediment to Growth =Largest Impediment to Growth =

High Taxes!!High Taxes!!

$20.00

$22.50

$25.00

$27.50

$30.00

$32.50

$35.00

$37.50

$40.00

$42.50

TaxRateper$1,0

00/Assessed

Dav. Bett Eld.LeCLaireS Mol Mol. RI S RIBlackhawkHampton

Cities/Townships

$38.95

$34.00

$27.72

$34.99$34.81

$31.20

$28.04$27.43

$29.03

$30.29

Quad City Regional Property TaxTax Year 2007


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0.00%

7.50%5.00%

2.50%

0.00%

2.50%

5.00%

7.50%

0.00%

2.50%

5.00%

7.50%

Rateof

Change

Dav. Bett Eld.LeCLaireS Mol Mol. RI S RIBlackhawkHampton

Cities-IA / Townships=IL

2.91%1.63%

0.91%

2.97%

-4.71%

14.07%

0.84%0.57%1.67%

-6.35%

Five Year Rate of Change


38/42



Historical Property Tax Rates shown in $/$1,000 of assessed value.

200220032004200520062007Davenport

$37.85185$38.02891$38.82534$39.16551$39.20993$38.95313DAD1.92%0.47%2.09%0.88%0.11%-0.65%Annual Change

+11.11%+5.58%+2.91%Five Year Change

$14.96445$15.24000$15.24000$15.56702$15.57515$15.57584Davenport City2.29%1.84%0.00%2.15%0.05%0.00%Annual Change


$17.07873$17.09591$17.09734$17.10760$17.01061$17.08731Davenport School0.69%0.10%0.01%0.06%-0.57%0.45%Annual Change



39/42

Shovel Ready SolutionsShovel Ready Solutions

Narrow the City mission to core functions!Narrow the City mission to core functions!Focus on basic services streets, sewers, public safety.Focus on basic services streets, sewers, public safety.

Stop chasing amenities and development with tax dollars Use Private Funds!Stop chasing amenities and development with tax dollars Use Private Funds!

Follow corporate examples!Follow corporate examples!Flatten BureaucracyFlatten Bureaucracy

Become Less Top Heavy (freeze salaries).Become Less Top Heavy (freeze salaries).

Outsource and Competitively Bid.Outsource and Competitively Bid.

Minimize/Eliminate the giveaways!Minimize/Eliminate the giveaways! Excessive use of development incentives.Excessive use of development incentives.

Lower Taxes!Lower Taxes!Trust local business to reinvest the savings to create value and jobs.Trust local business to reinvest the savings to create value and jobs.If there enough flexibility to fund the Promise, then cut taxes!!!!If there enough flexibility to fund the Promise, then cut taxes!!!!


40/42

Davenport PromiseDavenport Promise

Economic Development?Economic Development?


41/42

. . a high level of uncertainty. . a high level of uncertainty

clouds the fiscal impactclouds the fiscal impactestimates of the Promise.estimates of the Promise.

W.E. Upjohn Institute AnalysisW.E. Upjohn Institute Analysis

We agree.We agree.Vote No on March 3rd!Vote No on March 3rd!


42/42

The Taxpayers of DavenportThe Taxpayers of Davenport

Need Your HelpNeed Your Help

$$$$ - Donations are Needed$$$$ - Donations are Needed

Direct Mail, Yard SignsDirect Mail, Yard SignsMake checks payable to: Opt 4 BetterMake checks payable to: Opt 4 Better

c/o Mark Nelson, 3434 Forest Road, Davenport, IA 52807c/o Mark Nelson, 3434 Forest Road, Davenport, IA 52807

For more information on the Opt4Better PAC, visitFor more information on the Opt4Better PAC, visit www.Opt4Better.orgwww.Opt4Better.org

Reach OutReach Out

This slide show is available atThis slide show is available at www.NoMorePromises.comwww.NoMorePromises.com

Share it with your neighbors!Share it with your neighbors!

For more information on the movement and to get involved with the effort toFor more information on the movement and to get involved with the effort todefeat the March 3 referendum visitdefeat the March 3 referendum visit www.NoMorePromises.comwww.NoMorePromises.com
http://www.opt4better.or/http://www.opt4better.or/http://www.opt4better.or/http://www.nomorepromises.com/http://www.nomorepromises.com/http://www.nomorepromises.com/http://www.nomorepromises.com/http://www.nomorepromises.com/http://www.nomorepromises.com/http://www.opt4better.or/

Documents

Davenport Promise No