Wonks R Us

Where Public Policy and Small Business Meet

Category Archives: Policies

Real Costs and Responsibilities

Every time we have to choose between options, we face a decision-making point between immediate gratification and long-term consequences.  For example, buying the cheaper printer with the more expensive ink cartridges or eating that treat that you know will add bulges to where you want them least.   There is a dedicated part of our brain (the frontal cortex) devoted to making choices and recognizing the consequences of our actions. However, the frontal cortex does not inherently distinguish between short and long-term consequences. That is a learned behavior.

We, as a country, are beginning to factor the impact of our choices on global climate change.  Individuals may choose to walk or bike rather than drive or to bring a reusable bag to the grocery store.  Large organizations, including both businesses and governments, are choosing to purchase energy from renewable sources and purchase products with recycled content.  Analysts are refining methodologies that allow us to quantitatively compare short and longer term costs. These methodologies are variously called Life Cycle Costing or Life Cycle Analysis, but the concept is the same regardless of what it is called. (you can see some of City of Portland’s life cycle costing policies here).

I find it surprising how infrequently these same methodologies are applied to funding the public sector.  As a public budget wonk, I have heard the same conversation repeated every year since I took my first budget and finance class in 1995. The year is important because I have only watched the budget process in a post-Measure 5 Oregon. A typical conversation begins with an explanation of  how funding scheduled preventive maintenance is much more cost-effective than emergency repairs or replacement.  Or that schools need adequate funding that includes education in the arts in order to produce a skilled workforce for the future. The vast majority of politicians understand this argument, and try to sell it to their constituency.  All too often, citizens only consider the short term and complain about wasteful spending.

In Oregon and California, voters have tried to reign in public spending through tax abatement ballot measures.  It took a couple of decades, but now education and public infrastructure are so badly deteriorated that they require impossibly large budgets to correct. California’s Proposition 13, the progenitor of Measures 5, 47 and 50 in Oregon, has placed the 8th largest economy in the world on the verge of bankruptcy, and forced them to pay their creditors with IOU’s.  I am not the only one who has connected the dots, so has Peter Aldous in New Scientist:

…the pernicious effects of Proposition 13, passed in 1978. A populist constitutional amendment that capped property taxes, it has created a hole in state finances that gaped wide this year as recession bit into tax revenues. By limiting local school boards’ ability to raise funds from property taxes, it also turned a public education system that once led the nation into one of the worst in the US.

Just as Proposition 13 destroyed California’s exemplary public K-12 and higher education system, Measure 5 destroyed what was once an excellent public K-12 system in Portland.

We need to take a deep breath and remember that government’s role is one of stewardship.  Government is supposed to function as our frontal cortex and consider the long-term consequences when expending public resources. It is not sound fiscal management to circumvent the process and manage tax policy through citizen initiatives and referenda. Our role as citizens is to actively engage with our government and elect people we trust because we are the primary check on the system.  Those that complain about inept or corrupt politicians should take action with their votes. That is the core of democracy.

We should use California’s fiscal crisis as an object lesson and consider both the long and short term implications of tax reform.  Change won’t happen overnight, but it can happen over time.  Just as we have started down the road to reduce the impact of global climate change, we can apply the same strategies to adequately funding our public infrastructure.


Recessions = New Businesses=Confusion

I have spent the last three years (give or take) working as, with and along-side microbusinesses, and we all sing a variant of the same song: I know there is help out there, and I know some of it is great and some of it is crap.  But, as there is no single point of entry for locating these resources, and who has the time to start a business and locate and vet the wide scattering of available resources.  The end result being that people wanting to start businesses stumble around in the dark and end up working with the folks they hit on first.  Those who were lucky enough to find high-quality assistance early on sing the praises of the resources Portland has to offer startups.  Those (unfortunately, like myself) who have had a series of negative experiences, have just put their heads down and slogged forward alone.

Not being a particularly complacent person (sometime to CubeSpace’s or my own detriment), I have gotten to know a lot more about the resources for startups or microbusinesses needing some additional assistance.  I have discovered that there really are a lot of great resources out there as well as people who are genuinely interested in supporting small business owners.  But the problem remains that there is no single point of entry for locating these resources.  Just an alphabet soup of (mostly) publically funded resources.

It took an economic crisis, but the Portland Development Commission now has a list, with links, on their website with resources for local businesses: http://pdc.us/resources/economylinks.asp.

Fortunately this is not the only thing the City of Portland is doing.  Mayor-elect Sam Adams is very interested in small businesses, having recognized that we make up 85% of Portland’s economy, and we tend to be the primary economic driver during recessions. At the last Small Business Advisory Council,  Sam shared his 4th draft of recommendations to City Council on a Portland economic stimulus package.  While the content of the package remains a moving target, small businesses are an explicit category.  I’ve got to say that its nice to see that we’ve made the big time.

Standard Introductory Post

Although I may play entrepreneur, consultant, networker extraordinaire or any of the other roles I play on a day-to-day basis, I am really just a policy wonk at heart.  Doubt the veracity of that statement?  Check out the report I wrote for the City Club of Portland.

When I was asked to join Portland’s Small Business Advisory Council, I was very excited because it gave me a justifiable forum through which to express my wonkiness,  while still “working” to support Portland microbusinesses.  I have been itching for a medium through which to share the information I glean about the oh-so-exciting intersection of public policy and small business.   However, David has made it clear that it really doesn’t belong on the CubeSpace blog, and I didn’t to overwhelm any of the blogs where I write occasional guest posts.  So being the genius that I am, it only took a couple of years to realize that I could create my own blog on the subject.

Today I confirmed, once again, that Portland has an amazing city government that works hard to walk its talk.  There is a lot of talk about sustainability in this town and it is not hard to imagine it just becoming yet another buzzword.  However, I just learned about the City of Portland’s Sustainable Procurement Policy and I was very impressed by it.  When David and I were developing CubeSpace’s value statement three years ago, the focus of sustainability was all about the planet, with little focus on people or economic viability.  The continues to be the case in many, many situations.  However, the City’s Sustainable Procurement Policy creates a very high standard with an eye not just towards short-term impact, but at the lifecycle impact of the decisions we make right now.  This gives City employees the opportunity to purchase items that may cost more in the short term, but that make sense given a longer range view.

I learned about all this in the context of a new policy that the Bureau of Purchases is developing; a “sweatshop free” procurement policy.  This policy (still in development) will require the entire chain of production, from sewing to selling comply with fair labor practices.  This is an ambitious goal and will require that the City work with their vendors to come into compliance.  However, local governments are huge purchasers and trend-setters like Portland can change the way that governments do business by modeling best practices.

Me? I am just happy to be a taxpayer (as both a resident and business owner) in a city that makes values-based decisions on how they spend public money.