A question for you

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Have-You-Ever-Icebreaker-Questions-e1420590224582When we started the series on the demographic statistics that define Warren, we made the following statement:

“…finding a way to restore growth to Warren is not just our biggest problem, we must treat it as our only problem. We must find a path to growth if Warren is to have a future any of us would wish for. And there isn’t much time because, contrary to what many people believe, the pace of decline in Warren is actually increasing.”

My question to you is: “Has the case been convincingly made?

If you want to review the charts you can click the tab “Economic Development” at the top of the Warren Expressed home page. Each of the eight articles in the series is listed there, including this one.

I’m very interested to know what you think. Your opinions will help shape future actions. Do you think the problem of the city shrinking is as important as I do, and if not, why not?

Perhaps most importantly, what do you think we should do about the situation?

Unfortunately we can’t take comments here due to technical reasons. Please either comment on the Warren Expressed Facebook page, or send your opinions to me at info@warrenexpressed.org and I will publish them in a future blog post. Let me know if you want me to use, or withhold, your name.

We are going to need the input of everyone in the community if we are ever going to solve our problems. Don’t hold back.

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A broke city government

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city GF.001We resume the discussion of Warren’s economic health with a quick look at the city’s finances. This chart shows the revenue for the General Fund, from which police, fire, and street repairs must be paid, as well as almost everything else except water, waste water and sanitation.

As you can see it has been a pretty steep downward slope in the wrong direction for more than 10 years. We all have our own ideas about how the city spends its money, but it is clear that whoever is in charge is forced to make new hard calls every year on what stays and what goes.

The recent income tax increase was necessary just to keep municipal services where they are, which is still below the level many people would like to see. And the tax increase is only a 5 year stop gap. We will face new challenges, and probably before the tax expires in 2022.

In fact, if the current Trump budget is approved Warren will lose about $1.5 million annually in CDBG funds beginning next year. This money pays for the Community Development staff, many street repairs, and helps fund a couple dozen local non-profit groups that perform community services. (For more on how these cuts will affect Warren, see this article from the New York Times.)

The Trump budget probably also means no more Federal dollars for tearing down vacant and derelict houses either. While those funds do not generally flow through the city budget they do pay for work necessary to keep Warren from falling into a deeper pit of blight.

Stopping the bleeding in the city budget is a little like what Wall Streeters refer to as “catching a falling knife.” It’s not easy to do.

The point is that while it is sometimes fun, and certainly a popular local sport I’m guilty of playing myself sometimes, it is a pointless exercise to ceaselessly hammer the city for it’s lack of economic development activity. Are there things they could and should be doing? Absolutely. Are they the whole solution to the problem? Certainly not. It will take the effort of the entire community to dig out of our present hole.

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Tax increase update

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[This is a break in the series on Warren demographics. That series will resume with the next post.]

The Citizen’s Committee met with the City Council Finance Committee and the Mayor yesterday for an update on the use of the income tax increase funds and other items previously agreed to. Dick Thomas gave the Citizens Committee report. Highlights were:

  • Revenue from the tax increase are slightly below expectations, but it’s only been a couple months and no one is worried at this time.
  • Police hiring has been a little slow due to a limited pool of qualified applicants. Two have been hired and another 8 are in the pipeline.
  • Fire department hiring has been better with 12 hires. They have 6 more open spots, but will have to have another civil service exam to make the pool large enough.
  • All $500,000 slotted for road repairs will be spent this year. It will require $1.5 million just to redo the “Priority 1” streets, those in the worst condition, so this will be at least a three year project.
  • The auditor has put the city’s finances on Open Checkbook for the public to examine.
  • The escrow fund is being funded to enable the city to retain the new firemen once the SAFER grant expires.
  • There is still no labor contract between the city and the WFD; the situation is headed for arbitration.
  • There has been no progress on reinvigorating the Housing Court as yet.
  • The city has put most of its unused real estate on the market but have been unable to sell any of it other than one vacant lot on Summit Street.
  • City Council has not yet implemented the use of “Financial Impact Statements” for each piece of legislation, but the issue is being addressed for future action.
  • There was a lengthy discussion on the idea of selling Avalon Golf Course. Mr. Thomas made the argument that it is an asset that provides no return and the city should sell it and use the money for one of the many unfunded capital improvement projects required. It seems likely that this will get a debate in the entire City Council in the near future.
  • There was also a lengthy discussion of economic development, but it was too unstructured to have yielded anything concrete. Councilman John Brown (D-3) urged his colleagues to consider rethinking the current $67,000 per year subsidy for the downtown parking deck as a way to free up funds for economic development.
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House poor

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house.001The most valuable asset most people ever own is their home. Unfortunately for most people in Warren, this has not proven to be a very good investment. Keep in mind that we are talking about median numbers here, so there are exceptions, but the chart tells the tale.

In 1970, the median price of a home in Warren was $16,200. This means that half the houses sold that year cost more, and half cost less. If we adjust the $16,200 for inflation over the following 45 year, that median house should be worth $98,920 today if it had kept up with inflation. Instead, the media home value in 2015 was only $62,900, which is about 36% below the keep-up-with-inflation number.

The problem is a pretty simple example of the effects of the law of supply and demand. We lost a third of our population but people don’t take their houses with them when they move, so we have an over supply of houses. And because so many of those houses are vacant, they deteriorate, degrade their neighborhoods, and further depress housing values.

The most distressing aspect of this spiral is that it is accelerating. Note that while Warren began to fall behind the inflation curve in the early 1980’s, housing values here did increase for many years; we were just trailing the inflation rate. But things took a dramatic shift for the worse in the most recent Census report, which shows that home values actually decreased by more than 13% since 2010.

While the rest of the country was recovering from the recession, Warren’s fortunes, as measured by the value of our real assets, took a significant nose dive.

The Census does not tell us the average age of home owners, but I will offer a final observation from my many hours knocking on doors all over the city. I believe the average age of home owners is quite high — probably over 60 years. And who will by their homes when they retire to Florida or pass away?

I heard the same story many times from older home owners: “I’d sell and move tomorrow if there was anybody out there to buy my home.”

Next: Government budgets

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Income: Looking up at Mississippi

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income.001The last few posts laid out the age and education demographics of Warren, and showed what they have done to the workforce participation rate. Therefore, it will come as no surprise that these shifts have had a profound impact on the income of Warren citizens.

The numbers here are based on median household incomes. This is probably the most common way business and government looks at the affluence level of a community. For those of you who may not be familiar with the term, this refers to the total income, from all sources, of all the people residing in one household; that might be one person, but it might also be 2, 3 or more. The income being measured might come from a job, but it also includes investment income, any income from public assistance, or any other income of any type.

Median” means that half the people in the measured area, (in this case the city of Warren, the U.S. as a whole, and several other states) have income above the number, and half have income below. (This is different than the “average,” or “mean” point.)

pov lev.001Comparing Warren to the U.S. in the first chart shows that our median household income of $29,376 is more than 45% lower than the U.S, median of $53,889. Look closely at the trajectory of the lines in the first chart and you will see that we are falling farther behind with time. The rest of the country rebounded nicely from the 2008 recession, but the slope of Warren’s line turned south for the first time in the 2015 Census, dropping about $1500 per household since 2010.

Moreover, 30.8% of Warren’s population is living below the Federal poverty line, which is more than double the national average.

To put this in some perspective, Warren’s median household income is not only far behind that found in the state of Ohio, it is lower than those in Mississippi, Alabama and West Virginia, the three lowest income states in the Union.mississippi.001

Comparing a city like Warren to any state is not an apples-to-apples comparison, but it probably means more to most people than looking at the numbers for some random small cities you’ve never heard of in far away states.

If you want to know why Warren leads the nation in Dollar Stores per capita, one only need to look at our income numbers and trend.

Next: Home values

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