Thursday, December 16, 2004

Attracting People Downtown

Mi Biz has an interesting article on the development of Grand Rapids' downtown and what needs to be done to attract more people.

A study was paid for by the state and the GR Downtown Development Authority to figure out how to get more people to come downtown. I believe it cost over $100k to hire a consultant to issue the report.

The conclusions are a little disappointing. It says, "Grand Rapids must continue investment in public infrastructure but move to the next phase. Invest in marketing, promotions, recruiting, and organizational staffing to accomplish the goals."

For sure, investing in public sector buildings in the immediate downtown area needs to stop. What do you see when you walk out of the new convention center? The city/county buildings, the post office, an empty old age home, and that's about it. The area simply isn't conducive to pedestrian traffic. The real entertainment district is several blocks down, from the BOB, south.

But the conclusion of the report is that the city simply needs to spend more money on marketing. Marketing what? There really isn't much to do downtown. Sure, there are museums, the arena, and a lot of restaurants and bars. But that really is it.

What are we saying? It will take more people living downtown in order for more shopping venues to be viable. But the study recommends one more layer of bureaucracy - a new Downtown Partnership - to spend even more on marketing and such.

Downtown will start doing well and it doesn't need more government - it needs less. Government can foster growth of housing by making it easier to do business in Grand Rapids. Lower taxes would help too. Housing growth downtown continues. It will eventually reach a critical mass, and that's when shopping will take hold. Until then, we don't need more government and bureaucrats, we need less.

Monday, December 13, 2004

Michigan Budget Woes

A new report released by the National Conference of State Legislatures shows that Michigan is one of only three states where government revenues are still below those projected. The other two states and New Jersey and Tennessee.

Interestingly, some states are showing an astonishing level of income tax revenue growth over projection. Examples are Arizona (46%), Georgia (97.4%), Kansas (58%), and Hawaii (106%).

However, Michigan's revenue gap (the gap between projections and actual revenues) stands at $465 million for Fiscal year 2005, which started on October 1st of this year.

This means a couple of things in terms of tax and spending policy. First, we'll see whether the legislature has the guts to do some more cutting, or if they'll try more accounting tricks, such as the property tax shift, to raise more revenue.

Second, the underlying problem of a lack of economic growth in Michigan needs to be addressed. Heavy reliance on manufacturing, high taxes, and heavy unionization make Michigan an unattractive place for business to move. We've seen businesses flee the state in the last several year for other states and other countries. Unless Michigan is made competitive again, the state's economy will continue to groan under the weight of government.

It's an unfortunate reality, but manufacturing isn't the backbone of America any more. It's time to recognize that manufacturing, although still an important part of the economy, is going the way of farming. It simply takes far fewer people to manufacture the same number of items.

We are a service economy now - let's face it and deal with it.

Thursday, December 9, 2004

Twisted Casino Logic

Yesterday the state Senate revoked its approval of a compact with the Gun Lake tribe, effectively ending any chance that an Indian casino will be build (with the state's consent), in the Dorr area.

Senate Majority leader Ken Sikkema was interviewed on WOOD radio this morning and he explained that he voted to rescind the compact because a study showed that 3,000 jobs would be lost in other entertainment industries due to the opening of a casino.

In addition, he mentioned that there are 20 casinos in Michigan and "that is enough."

There are two points here that need to be countered. First, the idea that a new business will destroy 3,000 jobs is a fact of life. While we question that number (the study was commissioned by the Grand Rapids business community, which wants to stop the casino), it is a fact of life that new businesses create (and destroy) jobs continually. The senator's argument only looks at half the equation.

Tuesday, December 7, 2004

City Budget Gnashing

As our readers will know, we've pointed out some pretty ridiculous ways that the city of Grand Rapids spends its money. Now, last week the city manager, Kurt Kimball, went to the City Commission to say that the city needs to restructure the way it spends money.

He says that by 2010 the city will be in a $80 million hole. In addition, if the state reduces its revenue sharing, the hole will be $130 million.

Surprisingly, the focus is on cutting spending, not raising taxes (so far). Kimball's quote in the Grand Rapids Press is: "The question is when, not if, service levels will need to be reduced."

Perhaps there's some light at the end of the tunnel?

As we've pointed out in the past, residents of Grand Rapids already pay the second highest taxes in Kent county. And what do we get for it?

Maybe the city fathers will finally get the drift and look at the spending side of the income statement instead of the revenue side. Higher taxes only continue to push residents and business out of Grand Rapids.