Our view: The truth hurts

 

Our view: The truth hurts

 

Date: February 13, 2014
by: Observer Staff

 
 

The truth especially hurts — or in this instance, “annoys” — when you disagree with it. So the expected human response is to discredit. Vigorously discredit the messenger; make the messenger the focal point; and deflect, deny and ignore the truth.

Such is the case in response late last year and this month to the Laffer Associates review of and recommendations to implement Sarasota County’s “fiscal neutrality” mandate in the county’s 2050 plan.

The 2050 plan, many of you know, is the county legislation that governs development east of Interstate 75. The “fiscal neutrality” mandate requires that any new development that is approved must demonstrate its costs of taxpayer-funded services will not exceed the revenues generated by the development.

That, of course, sounds rational. But as the cliche goes, the devil is in the details — on how to implement and measure fiscal neutrality. Suffice it to say developers and land owners have substantive disagreements with county officials and no-growth advocates over the concept and how it is implemented.

And perhaps the best way to illustrate their differences is the fact not one developer in more than a decade has put a development shovel in the ground in northeast Sarasota County to create a large-scale housing development according to the 2050 mandates.

That alone says the county’s “fiscal neutrality” mandate makes no economic or market sense.

Apparently unsettled by the slow pace of development under 2050, Sarasota County commissioners began exploring whether to modify 2050 and, specifically, decided to obtain a consultant’s recommendations on how best to implement “fiscal neutrality.”

What’s more, commissioners decided they did not want to hire an academic to conduct the study; they feared it would take too long.

Instead, they turned to a private-sector consultant — Laffer Associates, the internationally known economics firm founded by Arthur Laffer, Ronald Reagan’s famous architect of supply-side economics and widely known former student and disciple of the late king of free-market economics, Milton Friedman.

In other words, they selected the company of an unabashed disciple and proponent of capitalism.

And, more specifically, they selected Donna Arduin, one of the partners in Laffer Associates, to conduct the study. She, too, is a widely known proponent of free-market economics, having served as the director of the Office of Policy and Budget for former Gov. Jeb Bush and as an economic adviser to Republican governors in California, New York and Michigan.

When Arduin completed her report (go online to YourObserver.com/LafferReport), some of its readers in Sarasota County apparently were surprised and offended that the report expressed explicit opinions and recommendations to reduce 2050 regulations and eliminate fiscal neutrality altogether.

Commissioner Joe Barbetta was quoted in the Herald-Tribune: “We didn’t ask for their opinion. We wanted more of an analysis” … “My initial reaction was from the perspective of ‘Was this the political bent of the firm?’ I think they’re more libertarian-oriented. I didn’t know that at the time.”

For starters, recommendations are opinions; analysis is opinion. To express ignorance of Laffer Associates’ philosophical roots is difficult to believe.

The harsher discrediting of the Laffer Associates report came, predictably, from the Herald-Tribune editorial pages and a story discrediting Arduin. Sarasota attorney Dan Lobeck, ardent critic of developers and proponent of the slowest growth possible (or none at all), wrote in a commentary: “Hiring Donna Arduin to write the rules on growth management is like hiring the Grand Dragon of the Ku Klux Klan to draft legislation on civil rights.” Nice smear.

The paper’s 2,130-word story on Arduin started out in the first paragraph saying “some experts” have “dismissed” Arduin’s work as “junk economics.” Seven paragraphs into the story, it said Arduin did, in fact, tell county officials she was not an economist. But for the next 1,869 words the story’s slant was clear — discredit Arduin.

Maybe you should read her report. It probably would be no surprise we found Arduin’s revised report just what commissioners and others need to read and hear. We’ve been saying for a decade what Arduin recommended. She wrote:

“Economic theory and the evidence dictate overwhelmingly that more restrictive land-use policies lead to a less responsive (more inelastic) supply of homes. The growth-management policies of Florida and Sarasota County simply do not allow market response to occur in a timely fashion. This causes higher and more volatile housing prices, slower population and employment growth and more volatile wages This is true at both the state and local level.” …

“Unfortunately, many of the policies of Sarasota 2050 clearly are exhibiting a great deal of harm on the ability to profitably engage in development projects in the county. Making changes in line with these suggestions would position Sarasota County as an economically dynamic county … ”

We’ll be blunter. Sarasota 2050 has exacerbated the shortage of affordable housing in north county and stymied economic, job and population growth over the past decade. This has hurt Sarasota’s struggling families. For Sarasota’s anti-growth advocates, 2050 has been a resounding success. For those who would like a rising economy and an expanding middle class, 2050 has been an abject failure.

That’s an opinion, to be sure. But it’s also fact. County commissioners don’t need an academic or anyone else to make recommendations on what to do about 2050 or “fiscal neutrality.” Just look around.

Investment money — the precursor to increased prosperity — flows where it is welcome. It’s definitely not flowing east of Interstate 75.

LAFFER’S SUGGESTIONS
ZONING/REGULATIONS: We suggest a proactive review of all land-use zoning, regulation and restriction. Zoning restrictions and county power to deny development proposals should be removed to the greatest extent possible …

CONCURRENCY: The county should mirror the reduced concurrency requirements of the updated Community Planning Act and not take on any of the optional requirements. [O]nly sanitary sewer, solid waste, drainage and potable water need to provided on a concurrent basis … Concurrency requirements should not be placed on … parks and recreation, schools or transportation facilities.

FISCAL NEUTRALITY: [T]he fiscal neutrality provision should be removed in its entirety. (It) goes far above and beyond the Florida growth management policies and is a primary reason that land prices in Sarasota have faster and more volatile growth than the state
average.

 To read the Laffer report, click here.

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