Anthony Piagentini
abpiagentini@gmail.com
February 16, 2014
Mayor Greg Fischer
Metro Hall
4th Floor
527 W. Jefferson Street
Louisville, KY 40202
Dear Mayor Fischer,
I would like to challenge statements you made in your last budget address as inaccurate and misleading. Although I commend your focus on growth, your results have not been as effective as you indicated in your address to the Metro Council. You said, “First and foremost, the economy is growing again. A recent Brookings report said we were the fourth fastest growing metro economy in the United States, as it relates to job growth.” Although I don’t doubt that a Brookings report said that, I don’t think it is irrelevant and inaccurate when you compare it to other reports.
I performed a simple google search for the fastest growing cities in the United States. On February 14th, 2014, Forbes published their list of the 20 fastest growing cities in the US. Louisville did not rank at all on that list. I also looked at USA Today’s top 10 fastest growing economies published on February 1st, 2014. Louisville was not mentioned there either.
I did finally stumble upon a report prepared for the United States Conference of Mayors as part of the 82nd Winter Meeting recently held in Washington, DC. I will assume that even if you didn’t attend the meeting, you or your staff were able to read the report. There are two areas in the report where Louisville are mentioned. The first is the real GMP (Gross Metropolitan Product) annual percentage change. We ranked 29th in that list. What is concerning even with that rank is that we peaked at a growth rate of 3.8% in 2008 and it has declined since then with a projected 2.8% growth in 2014. We are going in the wrong direction.
The other list we are mentioned in is employment growth rates and total metro unemployment rates. We are ranked 58th in that list. Once again we are going in the wrong direction with employment growth of 2.3% in 2013 and projected 1.8% in 2014. Further, the unemployment rate in the metro area is 7.1% putting us worse off than the national unemployment rate of 6.7% in February of 2014. This is the most concerning statistic proving that your metro economy continues to underperform against the nation.
The answer to this problem is relatively easy to fix. Lower the tax burden of your citizenry. Unfortunately I know this goes against your inclination since you are actively lobbying for laws that allow for new methods of raising taxes, such as through popular vote. The data supporting this is in a Cato Institute report published in 2011. The report shows that the only consistent explanation of why some local economies perform better than others over time has to do with the local citizenry’s tax burden. For example, Louisville is only mentioned once in the entire report. It is in a chart toward the end comparing the performance of Louisville to Indianapolis (the report selected paired cities in nearby states) in population, employment, and real personal income growth from 1980-2007. Louisville was significantly outperformed in every category by Indianapolis. The reason is simple, during that time period, Louisville averaged a 1.1% higher state and local tax rate as a percent of income compared to Indianapolis.
Contrary to your statements last year, this economy is demonstrably underperforming. Louisville has the ability to grow faster and more vibrantly than we have in recent history. To unleash that growth, you need to make more structural changes to our budget and work with the state to reduce our combined state and local tax burden.
I personally stand willing to help accomplish that. Do you stand with me?
Sincerely yours,
Anthony Piagentini
