As government dollars grow more scarce, how about 'incentive liberalism'?

You might call this approach "Duncanism," after the Race to the Top competition. It could be a good solution for future Metro transit service.
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Fred Jarrett

You might call this approach "Duncanism," after the Race to the Top competition. It could be a good solution for future Metro transit service.

How are we going to get through the current round of severe cuts to public budgets? The traditional way is to scale back temporary costs — consultants, travel, postponable projects — add furloughs, and try to keep the main workforce, and its salary levels, intact until the economy revives. That's short-term pain for long-term status quo.

A better way is short-term pain for long-term gain, and some of those ideas are beginning to show up. King County Deputy Executive Fred Jarrett outlined one of them to a Crosscut editorial meeting the other day. Consider the inefficiencies in the current Metro Bus system, where political realities dictate assigning future bus service according to tax-base contributions to the system (rather than where the bus riders live). Jarrett floated a new idea: assigning future bus service on a competitive basis. The better a city does in producing transit riders, the more service it will get.

As Jarrett explains the idea, it's a matter of lining up incentives the right way. If a city in the region puts in place zoning and other incentives to concentrate growth around bus lines and transit stations, it gains points. Similarly, developers in these cities avoid paying developer impact fees and can waive certain SEPA (State Environmental Protection Act) requirements, since the city has in effect pre-qualified new development on environmental grounds. Cities that do the right thing by transit and encouraging density get rewarded, while the laggards get to keep paying taxes without getting more service. Eventually the citizens in the lagging cities will catch on and elect better officials.

You might call this approach "Duncanism," since it reflects one of the best features of the Obama administration, the "Race to the Top" for school systems instituted by Education Secretary Arne Duncan. School systems that institute reforms — particularly on teacher pay and performance, but also charter schools — have a chance at large federal grants. Opt for the status quo if you want (as this state is doing), and lose out in the competition. Good luck explaining that to the teachers and the voters.

What's attractive, and novel, about Duncanism is that it avoids the kind of rule-based, top-down imposition of policy. Instead, it's "incentive liberalism," where localities get to choose what they want to do, and those that align with a national policy get big grants. The effect is gradual, democratic, competitive, and powerful over time if there's enough money and the administration has the backbone to stay with the winners-and-losers approach. The normal drift in Congress is to universalize the benefits, so each Member can take home a little bit of pork and get reelected. A classic example of this is the National Endowment for the Arts, which began by giving money to high-quality organizations, as reviewed by peers, and ended up ineffectively spreading small grants far and wide.

Another example of incentive liberalism is the way certain cities in the West are raising taxes to build rail systems and repair aging highways, thus earning federal matching dollars. A recent report by Citiwire writers Mark Muro and Rob Puentes, both with the Brookings Institution, spells out the idea in the Phoenix area and its regional Maricopa Association of Governments (MAG):

Challenged by needs yet pessimistic about the likelihood of new federal funding, MAG would have the federal government and large metropolitan areas work a trade in which Washington would provide new incentives in the form of increased and direct funding to metropolitan planning organizations (MPOs) and new flexibilities in exchange for those regions'ꀙ continued contribution of substantial regional funding to the creation of the national transportation system. Along those lines, what MAG calls a 'ꀜnew partnership'ꀝ between Washington and its most creative regions might enable new progress in addressing the nation'ꀙs gargantuan transportation challenges...

Through the 'ꀜnew partnership'ꀝ MAG would have the federal government reward large metropolitan areas that have secured long-term and substantial regional funding sources approved for a minimum of 20 years and that equal at least 50 percent of the annual federal transportation funding received by the region. As to the incentives, a possible menu of options might include: increased federal funding commensurate with the regional funding; more direct funding to MPOs; more flexible 'ꀜmode-neutral funding"; more streamlined planning processes; more direct reporting to federal agencies; and reduced bureaucracy.

Muro and Puentes note similar efforts to put transportation funding packages together in Las Vegas, Denver, Salt Lake City, Los Angeles, and Dallas. Not Seattle, one notes. Our region's effort to combine transit and highway funding into one large levy package famously fell apart when environmentalists, notably including Mike McGinn, worked hard to defeat Prop. 1 in 2007. When Sound Transit 2 was passed the next year, the region's highway needs were left marooned. No politician has dared to say much about how they would be funded, absent the voters who also favor mass transit.

Seattle is likely to be, along with the state, a Western region that lacks the political leadership to stay up with these other places. For us, it's still opting out of the competition in the new political world of scarcer, more targeted public resources. When will voters catch on?


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