Philip Raup speech on land use and growth in Minnesota

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Dr. Philip Raup, agricultural economist and professor at the University of Minnesota, speaking on land use and growth in Minnesota at conference of the Minnesota Planning Association. The Minnesota Planning Association Annual Conference theme was "Who Says Planning is for Pros?" and at held Sheraton Inn Northwest, Brooklyn Park, Minnesota. Objectives of the conference were to identify issues in state & regional planning; identify means of coordinating planning with other governmental agencies; and determine economic and environmental impacts of planning.

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I'm impressed with the comparisons that are possible between urban and rural planning and a convergence that has increased in recent years. It was said at a recent Water conference that we cannot possibly distinguish between groundwater and surface-water and certainly not in, Minnesota. Water table is very directly linked to the surface infiltration and stream levels to groundwater level relationships are so close that we can't work with on without disturbing the other now that has also been true metaphorically with our planning in rural and urban regions about the distinction Rollin Urban is becoming less and less useful. And one way. I see that manifest is in the changing dimension of the challenge to planners. I'm going to drop hello was the early evolution of the work in my own field and Ira cultural economics and development of farming in this country. Up until the 1930s and into the forties virtually all of the increase in output in agriculture in the United States was accomplished by bringing more acres under cultivation. We expanded. Horizontally, we plowed up Frontiers and it wasn't until well after the second world war that we begin to see clear-cut evidence of a shift from the emphasis on bringing more land under cultivation to a more intensive use of the cropland. We already had it. In fact the investment planning both within the firm on the private sector and in the public sector still carried over this old reflection of bringing more acres under cultivation as being the way to go and it's only been in our time in the last two decades that we have really fully begun to make a transition to Greater intensity of agricultural land use as a result almost all of the increases in agricultural productivity since about 1950. Have come from greater intensity of use of existing resources instead of from bringing more acres under cultivation. Some has been brought under your gation. Some has been lost to highways in Two Cities, but these are minor fractions of a percent in terms of the total pattern of output. So the shift has more or less been made and agriculture from a horizontal expansion emphasis to a vertical intensification emphasis. Now the parallel I see is it that shift has not yet been made in our urban planning. Too much of our Urban concepts of growth are still focused on sprawl on expanding the acres under cultivation under bringing more land under the bulldozer. And the entire structure of the institutional setting still supports that approach to the problem of urbanizing what was until quite recently a rural Society. You can consider this under several headaches. I'll suggest several one. It's a question of expansion versus intensification cuz I just said the second it's a it's a question of horizontal vs vertical expansion. And third and perhaps the most useful one at least seems to me being an economist is a shift from expansion on gross output to value-added. In my thinking those are all interrelated ways of saying the same thing. The last comment is used a bit of economic. Jargon that I ought to Define. It has been clear for some time that measures of output that looked at bottom-line results whether they were prophets or sales or tons could be very misleading. It isn't what's on the bottom line as a matter of fact. It's what went on in the process of getting to the bottom line. And who got caught in the divisions of the goodies that were distributed as result of some production activity now. In planning the focus of that comment is on the emphasis that I think needs to be shifted away from size of population number of jobs to a consideration of what kind of a population is it we're dealing with and what kind of jobs are these that we seek to create. So that the creation of jobs alone is not an adequate test and yet I find and rating a good many discussions and seeing a lot of debates in public bodies about the development schemes for future of the Twin Cities the future of the state of Minnesota and the future of the United States a tremendous emphasis on job creation. We have enshrined full employment. It is one of the Sacred cows so this generation and it's well past time when we should begin to recognize that full employment by itself is a Halo goal. You can get full employment and leaf raking. You can get full employment at very undesirable types of jobs through the key in particular for planners and particularly in this part of the country. The key is not jobs. The key is quality of employment opportunity. And in this sense, I see a parallel between our focus on Urban expansion bringing more land under cultivation sprawling the suburbs and a preoccupation with job creation. The two ideas come together in public policy today in one very dramatic way current example is provided by the debate over the cut that proposed by President Carter for the 19 or 27 or however many water development projects. And if you've been following that debate in the Press, you will recall that several of the Congressmen have been testifying on behalf of their states Water Project in the theme has been uniform that yes, they realize that this has an unfavorable cost-benefit ratio. And yes, they realized that this represents an unwise use of resources, but if creates jobs as if by touching this magic of job creation, you can help solve all of the sins of misuse of resources Distortion of the environmental base and many other violations of good fiscal and monetary management if I think a minute about what I just said and what it means for, Minnesota. Then I reflect on the fact that the most recent report from the state New Economic information service has shown clearly that the biggest increase in Minnesota is Gross State product. The parallel concept of gross national product has been in utilities transport and communication. In very summary terms is the subject of communications written large. This is what I understand under the broad term of communications. And this is very fitting. This is the current Generations translation of the emphasis in a past generation on the highway and in a past Century on the railroad. And this has been the raw material of planning. This is the gut-level subject matter bass for planning. Transport which in the recent past meant goods and Communications which in our future means ideas. Telecommunication focus is this generation and the next several decades equivalent of the highway development programs of the last 30 years and of the railroads of the last half of the 19th century. So I see a potential here for reinterpreting the value-creating forces that come from development of a new mode not of Transport but of communication. In a way that will make maximum use of our opportunities of our resources and about potential more specifically. I see that interpreted in this way. We now have the technology to decentralize cities in a way in which they never were decentralized before in fact The aggregation of peoples that we have known in the past as the city is now as technologically outmoded as the family farm. Norman McRae the associate editor of the London Economist riding in a January beginning of the new year special feature made the startling comment that 27% of Americans are now engaged in industry and the figure is falling fast. That by the end of the lifetime of the majority people now living he expects to see industrial labor occupying not more than 5% of the labor force in North America. And in my words not his this leads me to a suggestion that in the reasonable planning Horizon, which I take to be 20 years 25 years. We are quite likely to see they Industrial workers take over the role of the peasantry in a 19th century European sense and the American Suburban single-family detached house occupy the position now held in sentiment and an economically re-buy the family farm. That is the Family Farm of the future the steelworkers of the peasants of the future. And in this sense. I find it intriguing to speculate on what kind of a world will that be when we can divorce ourselves from such a heavy investment of Labor and resources in the primary product manufacturing and distribution. I think we can see the symbols of this and some of the types of business that have already located in this part of the country. We are at the end of Transport lines. We are at the high-cost energy map center for the United States. I haven't looked at the recent figures but in not so many years ago this region beginning from here and up to the Canadian border has been the highest kilowatt hour cost for residential electric bills in the United States. It may still be at any rate. We are at the end of the line and the top of the Heap as a result. We have been under stress for some time to economize on movement of heavy low-value weight ratio goods and focusing on maximum value added to a minimum amount of necessary raw material transfer. I'll actually type of industrial structure. I visualize for the future. That's the type in which we've already got a leg up in achieving some excellence in its development. The symbol of the possibilities here is the Cargill company a grain merchandising firm that has dealings all over the world that must be up to date that could not exist without split-second timing and it can locate out in the rural area west of Minneapolis and achieve all of the economies of scale and of efficiency of operation that they need the through the improvements in communication technology. That is this generation is equivalent of being in the city. So I see this then as a redefinition of what constitutes development. We have a very rapidly increasing number of industries that can locate anywhere the so-called Footloose Industries. And in my judgment they are increasingly going to select their locations in terms of what might have been considered in an earlier generation minor and Ani conomic factors. They are going to move above all things to places where local government is honest and efficient. That's going to be one of the greatest variables among the institutional choices. They have to make and they're going to move where the place is clean. In a literal sense and in a figurative sense, I think this is the last time to read out of all the interviews at the business retention Committee in New York City has been making with industrial leaders that have decided to move out of the city. Why did they leave? And it more or less comes down to that honest local government with which they can relate and cleanliness. And if you add personal safety or Public Safety, then you have most of the real basis for making a change in location of Industry. As a footnote to that. I think it's not the revealing any Kept secrets to say that then talking recently with some of the men in Pillsbury. I've been impressed with their explanation of why they didn't move. It seems to me that we have done far too much research. We meeting the economics profession and the in the reasons why industries did move and their books about Anne and brochures In Articles and far too little about why they did not move. Well, the reason Pillsbury didn't move makes a fascinating story. I'm oversimplifying it but apparently to three reasons first place if they went to the suburbs that have to mow the grass. Now that is not as silly as it sound as soon as I relocate in a Suburban location. It becomes a symbol of the carpet aspirations it becomes the monument that must be maintained They are nickel. They have to maintain the monument. They have to landscape, but they have to police it. It is visible. It can easily be identified with the corporate image and that has to be maintained at all cost it cost money to create and maintain a corporate image. And mowing the grass is a symbol in the second. They would have had to retrain a very large fraction of their cargo and stenographic labor force suddenly overtime. This could have been done without much dislocation about to have had to do it quickly is a kind of strain in a firm that relies heavily on the scale clerical and stenographic. And third they would have been trapped in the company cafeteria. And again, that's not as silly as it sounds because griping about the food as anyone has been in the army or in jail nose is run of the principal occupation of a captive audience. And when you have moved to the suburbs, you've got a captive audience as far as lunchtime as concerned. So griping about the company cafeteria becomes one of the major power Rising influences available in the in the labor force in downtown vacations. You don't have to mow the grass to City plows the streets the workforce turnover rates are low and you have a wide range of choice for replacement when there is a turnover and if they don't like the company cafeteria, they can walk across the street and eat some place else. I know it's apparently were among the leading reasons why they stayed they didn't have to do with movement of people Goods Communications or any of the high blown reasons that some of us Economist. It was signed to Industrial location decisions. Neither incidentally. Did they have to do necessarily with the comfortable choice of convenience of the board chairman or of the vice president charge of operations. Which is another folkloric explanation of why Industries move? The reasons that were apparently involved in the case were good solid recent and know how many of them are amenable or influence by planning activity. Can be manipulated in the name of good planning. No, we have. not Encouraged industrious to stay downtown. We have not encouraged people to live in town by a variety of public policies that have in fact been Orchestrated to achieve exactly the opposite effect. I written quite a bit about this in the last year or two and some of you at least I think he have read some of the stuff so I'm not going to develop the argument in detail, but let me just do it some Arrow. Under the general heading of how have we subsidize suburban sprawl? I come up with at least 10 different policy acts that have led to this subsidization. In first and most important by far is the way we Finance our highway system. We do this with a tax on gasoline that is a function of the number of Revolutions of the internal combustion engine and that is hooked mechanically to the number of times the tires go round. As a result. The gasoline tax is a direct linear function of distance traveled. It is a horizontal linear function. Revenue measure that's on the revenue site. You double the travel time the excuse me, double the travel distance, you double the amount of the tax, give or take a few percentage points and averaging over different cars consumption levels for gasoline highways. We then turn around and spend it under the political influence of pressure groups that demand expenditure of Monies to relieve congestion. the principal allocation of the money collected on a linear distance function Is spent on a nonlinear time function reduce time in travel reduce congestion. The result is wheat collected as if it was for connecting cities over y distances and we spend it to build a gate lane. Superhighway is leading out to the suburbs. The effect of the way, we Finance the highways and short was to achieve a massive income transfer from distance travel to time oriented travel to benefit time travel in this state. The total cost of the interstate system is not yet known for sure. It's not likely to be known for another three years or so, but it seems probable that it will be well in excess of the double the original plan figure at the moment. We have roughly 65% of the total funds committed through the 1973 budget year, which is the most recent one for which I have funds that I have statistics. By 66 or 7% of those funds were spent in the Twin City metro area. Although the mileage courses predominantly in Allstate, are you and the principal explanation and defense for the highway system was that it would connect centers of population and regions of the country in an interstate and Defense Highway Network. The focus was on defense in pursuit of Defense. We have built a Suburban generating tool in the form of the network around the major metropolitan areas. That's where the bulk of the money has been spent. That's where the major impact on land values has been realized. That's by far the most important way that we have subsidized the suburbs. Second with hot by the way, we Finance housing we have augmented this same influence going back to the second world war the GI bill, they Veterans Administration standards for approval of mortgage lending of the Fannie Mae Federal National Mortgage Association standards for the insurance or the purchase of mortgages in a discount at a function emphasized insurable loans preferred risks. And at least until about 10 years ago, we're exclusively reserved for the construction of single-family detached. It was not possible to get a VA loan to build an apartment to if you wanted to live in an apartment. You couldn't benefit from the VA veterans GI Bill benefit. You couldn't live in a condominium. The only way you could get onto that gravy train was to build a single-family detached house and that men in the suburbs and since the government did not participate directly in the lending process, but instead purchase the mortgage is that somebody else had made and whose choice had passed through somebody else's portfolio committee. There was a private sectors preference for getting as little building and as much land as possible cuz in general overtime the land depreciation value and the building depreciate so your loan is in better shape if you have a little house on a big lot and if you have a big house, I'm a little lot Tell there was a private sector credit institutional bias in favor of the sprawl suburb and this then got picked up and guaranteed. By the way. We purchased them argue just through the Federal National Mortgage Association. That's a second way in which we subsidize sprawl. The third has been of course the familiar on income tax returns. This is the time of year to remind you of that particular bit of gravy that is available to all who will itemize their returns. It doesn't pay to itemize returns unless you have over a certain level of income and over a certain variety of classes of expenditure that you can use as deductions and the social stratification associated with the privilege of I itemizing deductions ensures that it's is principally valuable to the middle classes and above. It's not principally useful to people in general with incomes at present levels below about eight or ten thousand a year no gravy from itemizing. So it ensured that the privilege of itemizing the deduction of taxes and interest was an upper or middle and upper income subsidy. And those are the people that choose to buy space as well as shelter when they build houses. Other words they're in composition permits them to enter the market with effective demand for space. Which means Lots As well as a roof over their head. At lower levels Ben, you're more interested in the shelter and you can't afford so much Indulgence. Fourth by permitting accelerated depreciation we have guaranteed that structures will be thrown up. preferably in large number and preferably new so that they can take advantage of the accelerated depreciation. That's not possible under the income tax laws. It's very difficult to rip to organize a construction site in the build-up portion to the city so that you can get maximum benefit from accelerated depreciation. The much easier solution is to LeapFrog into the suburbs pick up a undeveloped tract and put up a whole Forest of tract housing. Then you can maximize your available benefit achieved through accelerated depreciation in your income tax report. So that is the name of the development game for most housing developers the accelerated depreciation, then becomes one of the unintended tools that has very greatly stimulated LeapFrog forms of sprawl. It has some other sideline side disadvantages that are worth pausing and noting it has meant that we have generated a pattern of suburban life in which we have put up large tracts large units of tract housing. More or less simultaneously. It is all has been constructed at one time. So we have what amounts to a series of housing plantations around the country now in which they are uniform species. and Uniform age distribution and I most like Forest plantations in which you planted the trees all at the same time and they're all the same species. Now, you know what happens in Forest Plantation where they all the same age class and they all the same species. you clear-cut so I anticipate my lifetime seeing us clear-cutting, Bloomington. And if we move the stadium we might clear cut it sooner rather than later. now flat surface easiest way of calling attention to the fact that we are going to have some Monumental problems of deterioration because they're all going to come at once and when our present plantations of houses of Uniform age class and single species are overripe, they're going to fall it just as quickly as they went up. So the depreciation and maintenance problem is going to come with a crash is not going to dribble in it's not going to be a question of maintaining a few houses. Are y'all going to have to be the real sure going bad all at the same time? The sewer lines are going to have to be replaced all at the same time. So we're going to have the new class of urban renewal problems. When we begin to face the necessity for clear cutting some of these suburbs and I conclude that what will probably be done is that we will clear cut. In other words, it will be cheaper simply to destroy and start over again that will be to maintain so it's rather distressing reflection on the impact of accelerated depreciation, which put the emphasis on throwing up a structure that would last long enough at least so you can get your maximum accelerated depreciation and then give you a chance to get out and let somebody else worry with the aftermath which is in effect put a premium on shoddy construction. This is what we have. This building were in is the classic example. I don't know what this building depreciation schedule is, but I suspect that this is being depreciated on a 20-year schedule. It might even be depreciated on a 15-year schedule. The reason that cedar-riverside housing development on the Westbank of the Minneapolis campus has been so controversial is in part due to the fact that they got in financial difficulty because it was floated financially because they did get approval for 20 year depreciation and they asked him what they were going to do at the end of 20 years. And the suspect the suspicion is that the people that put it up? We're not particularly interested in seeing that it didn't fall down. Now it's this kind of emphasis on the quick and shotty. and on the sprawl Plantation type Housing Development that has given us the suburbs that we have today many of them are very pleasant places to live many of them are delightful solutions to the human habitation problem, but some of them have building time bombs of Maintenance and renewal that we haven't begun to think about. That's just the fourth reason V reason is with the investment tax credit generally not intended or not applicable to housing but it does in fact have an impact on the way. We have construct their housing because they're a good many things you can put in in the suburbs that you can use investment tax credit for Well systems. All is Samoan the grass to The Lawns Landscaping structures not associated with the dwelling much of that can be Run in under maintenance and operation clashes of expenditure for which investment tax credits can be taken the opportunity to do this in the suburbs is greater than in the city. So this has been another way in which the federal largest granted through the income tax and deductibility of specified item has been interpreted and it's been in fact used to subsidize the suburbs. The 6th way is by granting. exemption to municipal bonds The tax-exempt municipal-bond is the classic way for the very wealthy to escape taxation. Now, it's escaped its more correct to say they prepaid the tax. By accepting a lower rate of interest on the bond. When coupled with the privilege of not having to report it as income on their income tax return. So that lower rate of interest that differential amounts to prepayment of attacks. Now this was defended on the ground that this was a waste it Courage investors wealthy individuals to make their money available to needy municipalities who were putting up public structures and otherwise doing good building things that people wanted and if the municipalities were using the money for this public function that it was only fair that they should be given a preferred status in the Capital Market in the preferred status was given by permitting those who invested in municipal bonds to be able to Exclude the income in reporting their annual income tax declaration now available to all this reminds me of voltaire's famous statement that the law was completely passive completely without bias in France it apply to all people it permitted the rich as well as the poor to sleep under the bridges of Paris at night. How our law has been equally even-handed. As a result anybody could take advantage of the tax exemption feature in Municipal Bond floating. But in fact, it's the wealthy suburbs. It doesn't. It's the Rabbit Valley with lots of kids to educate that will March its voters to the polls and approve a bond issue. It's the Central City with a good many old folks with lots of the social problems with lots of transients that can't get approval for the bond issues. Those of you who are in St. Paul will remember that the first and most recent time that we got any substantial bond issue money for improving the schools in the city of Saint Paul was when we hooked up to a stadium on Rose Road over by Snelling which was strictly a sucker come on. It was intended to get some of the sport fans to vote for the bond issue who would otherwise vote against it and by building that useless Stadium we did get a bond issue from Saint Paul improve the school that was the price but with exceptions of this kind it has not been evenly available to all municipalities is a result the federal subsidy involved in tax remission on municipal bonds has gone disproportionately to the more affluent suburbs. They are the ones whose bonds get the highest rating. They can make the spread between the current borrowing rate and the municipal bond rate the greatest therefore they use the instrument of the tax-exempt municipal-bond the most This is a federal subsidy to the rich sort of a negative income tax for the rich. 7 we permitted municipalities to monopolize the tax base. We created the United States of America to break out of the feudal mode of Europe. We forbid primogeniture and entail in this country. You cannot specify in your will that your land or your property must pass only to your eldest male are from now on and forever more there are no bills of attainder possible under our legal system. We did in other ways everything we could to destroy the vestiges of feudalism, and then we created the municipal subdivisions. This is modern. Feudalism. This is urban creation of principalities baronies dukedoms and other minor units of government under the control music usually have a courthouse gang which uses this Municipal privilege to monopolize a tax base. And the inevitable result is that we have more or less inverse correlation between the wealth of the suburbs and the effect you burden of Taxation. In the Twin Cities, the lowest effective burden of Taxation is in Golden Valley Edina northoaks other deprived areas of this kind. And the consequence of being able to draw a moat around your castle and say to the rest of the world meaning the rest of the tax collectors in the world stay out. This is our play pimp. This is our tax base Monopoly. We are going to permit the people who live here to earn their income elsewhere. They can engage in Statewide in Nationwide in international Commerce and funnel in their rewards in the form of income and salaries and bonuses. And then spend in our subdivision on the kind of housing that be fits me in of that caliber and income well, and then we're going to monopolize. Now that's a good income transfer a sophisticated way of getting your cake without having to pay for it. This is what New Jersey and Connecticut have been doing for Generations is part of the reason why the city of New York is in such desperate financial crisis. Is it neither Connecticut and New Jersey have income taxes on purpose to suck out the executive types who don't mind getting to work at 9:30 or 10 in the morning as paying a price at Community for getting out of town and who can build are expensive houses in New Jersey or in Connecticut and should not surprise. You course know that New Jersey Connecticut have among the highest property tax rates in the United States. And the reason is they have chosen to attract their residential home builders with promise of no income tax and once having suck them in then they saw come with the property tax. It can work in that way. If you have that kind of a drawing card and that kind of a congregation too well to play with the net effect. As far as most cities are concerned is that it has permitted the upper income groups in the population to do most of that private-sector spending on material Goods in sexually that that bass is excluded from the support of Public Services. Are they can enjoy the general level of Public Services of the larger Community, but only have to pay for the local level of services that they demand the illustration of what I'm saying to make it more concrete is that there was no charge the last time I looked there was nothing in the budget for North Oaks for welfare, and there was a $1 per taxpayer Library. I give you some idea of the shift invert. The reason why there's no welfare caseload and they can use somebody else's Library. So in this sense that we have made it profitable to create these dukedoms and Prince princely States and draw their Municipal boundaries around them and monopolize the tax base. And that's what we're giving a great incentive to the developer a to the planner to go out and demarcate a new principality in the suburbs large enough to have a tax base that will be worth exporting on which we file a claim much like we file a claim on a gold mining site in the Mountain West and then when we filed a claim that becomes our privileged exploitation site. So we mine it. And we have as a result of some hundred and fifty plus municipalities in the Twin City metropolitan area studded with these mining claims. And we defend them in the name of local government one of the dearest principles to which we adhere to self-determination the master in your own house all of the emotion of wanting to be in charge of your own Affairs can be mobilized to maintain this feudal system. That's one of the major reasons why we have the suburban sprawl that we have. We have institutional structure that not only encourage. Well, that's not the only reason the way is through the average cost pricing of utilities. We do not charge hook up charges at the outer fringes of the utility system commensurate with their real cost which is in the way a device that determine that ensures that the older build up section two cities will subsidize the newly-created outlying suburbs not in the old days when that principle was adopted the inner cities were rich and the people who lived out in the suburbs were poor. These were the tar paper Shack types. So it was a social stigma attached to building 2 Charging for pricing for utility hookups to the poor out in the trenches. Farm people of destitute poverty-stricken types and the principal now has been completely reversed. We now have the poor in town and the utility base deteriorating but the rate structure is priced in such a way that we cover disproportionate charge a fraction of the charge of utility hookups in the affluent suburbs. So this is a subsidy from the poor to the rich is become section. Another 9th way is by the unequal distribution of cost and services on tax-exempt lamps. The tax-exempt plans are by and large in the more Metropolitan and more densely settled areas. The people that use the services are by and large in the less densely settled Suburban areas. You couldn't maintain the Minneapolis. Art Museum Metropolitan Museum of Art Minneapolis or the Walker If all of the people that supported had to live in the city of Minneapolis Back, most of people supported don't live in the city of Minneapolis the same goes for the orchestra and many of the other institutional structures that we hold dear. Our churches are universities are educational institution that Municipal subdivision as a result and there's a considerable income transfer and especially an important aesthetic and cultural transfer that takes place through this disproportionate location of tax-exempt land in one part of the urban complex and the beneficiaries of tax-exempt land in another part where they don't have to pay the taxes it support the street cleaning and the fire protection and the other Municipal Services demanded by the use of those institutions and services on tax-exempt land. And then finally tent by the way, we have regulated the price of petroleum-based fuels. This has been a tremendous subsidy. We have made it cheap to live in the suburbs. Retrospec it turns out that we should have made it expensive to live in the suburbs. We should have reversed almost every one of these institutional incentives that I've been in Yuma rating that leads to suburban sprawl and we're right now in the process of trying to persuade ourselves that it is politically rewarding to do so, we have not yet generated a Crop of political leaders who see political game to be made in reversing these institutional effects and I see that as one of the challenges of the immediate future. We've had a stress on a recent stress on. are Bicentennial on the historical traditions of the United States, but we are on a nostalgic kick Antiques and Museum pieces sell like hotcakes As result it's high time that we reoriented some of our institutional structures to reflect the potential for Renewal and maintenance of our existing capital. There is a very valid point to be made with respect to the Full Employment budget. This is one that is not easily. Understood this is it's been difficult to sell in the political context. But the key point is not a not a difficult one to grasp it is that The level of budget burden the cost of Public Service burden in the United States should be measured not against what are present Revenue level is but what I press revolut you level could be if we had full employment. Therefore the capacity of United States to finance a budget is not properly measured in terms of existing levels Revenue, but should instead be made in terms of potential that theory underlies the tax increment financing incidentally tax base will be in the future. Well, this hasn't been translated into our institutional structure yet. We haven't got the institutions. We haven't got the tax income tax gadgets that would support this rediscovery of the worth of maintaining an existing Capital stock. Instead of subsidizing the new and the shotty and the sprawled forms of urban life. Let me close with a couple of. Quick looks into the future with some suggestions what I see as future problems in the planning profession or as needed shift in emphasis for planners. One of these shifts and emphasis. I think I should start at the base of the planning pyramid and question the emphasis on land use. I think this has been a trap. I understand how it happened. I think we have lived beyond the time in which this was a irrational solution. In my early years as a graduate student that was a brief. In the 1930s when we could talk about planning and we could study plan. And we had some people who were called planters. And that came to a grinding halt in the second world war and some other things that happened at about the same time not related to the war. Specifically the southern congressmen it put a rider on the department of agriculture's appropriation in 1941 that said that no part of the money is appropriate to the US Department of Agriculture could be used to engage in rural development planning or in real social studies that was put in and maintained at the assistance of Southern mostly Senators who were incensed by some of the 1930s photographs taken by the farm Security Administration of poor people in the South Seas, the classic photographs. Now of the Depression years are being resurrected in getting prizes for great photography. That's so incensed the southern, but they put that Rider on the Operation game in town at the time. I was the only agency the government was doing any planet did have a rural land use planning to be wiped out. That happened in my graduate career. I went to school studying to be a planner. But time. I got my degree. They wiped out the profession. I thought I was studying for. Now it's time to recognize that we can now talk about land use planning without being classed as communist, but there was a time when you couldn't and we use a code word. And the code word was land use. Okay, we won't talk about langes, but we'll talk about land use better land use who can be against that. And as a result, it was much too much focus on the physical use in the sense that the early I can count on us focus on output the terms of Total Physical bushels of Wheat and head of cattle and not enough focus on the quality of the use or on the effects of the use and particularly on the distributional effects of views. Are the significance of the last remark is that we have virtually no studies of urban land ownership. We know a lot more about the ownership of rural lands and the social consequences of concentration of the ownership of rural and urban legends. And we don't even know very much about our alliance anymore. The last comprehensive survey of the ownership of rural lands in the United States was made in 1946 47 there has not been one since We really don't know who are the beneficiaries of our planning X we don't have a statistical system that throws up that kind of information. We have fragmented bits of information. We know in some localities who benefits but there is no aggregate data series that permits us to say what class of landowners is being made Rich by this policy. Now that's the reason why there can be so much heat and so little light about the Garrison diversion unit in North Dakota. I'm not in North Dakota now so I can talk about it. I suppose I couldn't say this across the line but this is an outrageous boondoggle. It is an absolutely scandalous. Misuse of the power of eminent domain to take plans for very private enrichment purposes, and the beneficiaries are a couple of hundred of landowners. The average on-site investment if the plans now Finance are completed will be $2,500 per acre before the water is delivered and it does not include the distribution system for the irrigated are you don't include the canals in the pumping station to get the water up to the perimeter of the irrigated area? Now if there was more adequate data on who own this land and who is benefiting from this then they income transfer in this project would be so outrageous that you wouldn't have to talk about stopping it because with polluting some Waters that float into Canada. This has become a proxy for the real reason the real reason is it faced it so very bad use of the power of eminent domain. It will depreciate this needed Power by using it for such personal / private game and second. It's at outrageous income transfer from the rest of the taxpaying public to benefit a few landowners. Now we need more attention in our planning studies to the ownership and the beneficiaries and the distribution of affection and less emphasis on the exact use of the landing on mapping the surface features. I see another problem and that is that in planning. We are in somewhat the same position. We've been in my profession and agricultural economics in that are extension activities are frequently outrun our research backup. In early days, there was a belief that your research was fundamental you didn't have anything to do. In the way of extension work popularizing the results of science until you had some results from science to popularize so the emphasis of necessity and this led to a neglect of the popularization function of the emphasis of the extension function. We got far too many people in research. We made research sacred was given an order of respectability and extension of the knowledge of research was second class and we still suffer from some of this by us. But at the present time they also a possibility that the pendulum is swinging the other way that we have had too much activism too much confrontation politics in the field of Urban Development and planning in recent years, and there's danger that are popularization activities not her extension function is getting ahead of our research. weird popularizing and and massaging about a lot of things for which we do not really have the hard data to permit us to take from positions. So I think in the land use planning Urban Development rural development feels we should look to our research base. I think it's getting overextended finally I see the successful planner as basically and educator. This purpose of planning is to inform not to rule. And the reason infatuation with the law are recent tendency to litigate every conflict and outgrowth of Confrontation tactics of the late 1960s outgrowth of the Civil Rights action in the south in the early 1960s. I think has dangerously overextended our dependence on the law. We are now stressing and I mean we are overburdening. We are putting stresses up on the legal structure that are likely to break it. They're too heavy for the structure to Bear. We're asking the courts to interpret and resolve conflicts that are not properly resolved in the courts Lee Reserve mining case assembly one example We are doing this repeatedly with social conflict situations in the suburbs with respect the zoning exclusionary zoning with respect to growth or no growth in Petaluma or Ramapo with respect to the size and configuration of City quite frankly. The courts have not been trained to solve. This is a wise use of a tool and if we burn it too heavily we're going to destroy the tool. I have one. Dream that I speculate about frequently assume for a moment that I'm right and that the focus on Communications in the future will be equivalent to the focus on the highway system of the past assume that this Generations focus should be on improving the communication potential. And at the people to do that will be equivalent to those who voted to deepen the port of New York and those who voted the bombs to finance the Erie Canal and those that supported the Transcontinental railroads all that developed the political backing for the interstate and defense highway system. Then I see as the potential outlet for this kind of reinterpretation of the proper focus on the construction of a solid basis for modern planning. In the possible form of a satellite which the state of Minnesota floats and publicizes as its satellite parked up there as a communication device which will be available to the industries that move here which will be used to give worldwide communication potential to Modern data-based types of activity, which will permit us to be in the Forefront of the development of the databank world in which Communications substitute for transportation. And we have the technology. We have the people here who could do it or we have the limited Financial capacity of a small state. But if an Indonesia or a Ghana or some of the new States in Africa and Asia can float their satellites. Why can't we? And I see this as being this Generations potential for developing the transport base. Let me quit with that. Thank you.

Funders

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