CPD IN THE NEWS

JACKSON HOLE, WY – Last Thursday was the first time the most powerful financial players in the U.S. formally met with the people their policies affect. During the Federal Reserve Economic Policy Symposium at Jackson Lake Lodge, a meeting between the Fed and Fed Up sparked impassioned speeches that burned through barriers of language, culture, race, and socio-economic status. But the fervency expressed by Fed Up members seemingly had little influence on the Fed’s impending decision to raise interest rates, something Federal Reserve board chair Janet Yellen announced in her annual address the following day.

Still, members of Fed Up—a syndicate of the Center for Popular Democracy built around the ideology that the Fed’s policies affect people of every skin color and income bracket—were encouraged by the meeting.

Shawn Sebastian is the field director of the Fed Up campaign. “I think the meeting with the Fed was historic and unprecedented,” he said. “There are never that many Fed officials in the same room at the same time talking about monetary policy, and they’re certainly not doing that with low income people of color.”

Federal Reserve board leaders like Neel Kashkari, Lael Brainard, Esther George and board vice president Stanley Fischer all participated in the Fed Up roundtable.

The landmark meeting was the result of Jackson Lake Lodge overselling hotel rooms that Fed Up members had reserved. After the group filed several federal complaints, the Fed agreed to the sit down.

‘Don’t slow down the economy’

Echoes of agreement among Fed Up’s constituency rippled through the crowded room at Jackson Lake Lodge Thursday as the roundtable began. Members of Fed Up elucidated ideas of stagnant wages, unemployment, and underemployment that disproportionately plague people of color in the United States. Fed Up members explained how the Federal Reserve’s pending decision to slow down the economy by raising interest rates could damage already neglected communities. Nearly every speaker from Fed Up concluded with one central idea: Don’t slow down the economy. Not yet. Don’t hike interest rates. Not yet. Our communities are still underserved. Our people are still underpaid. Our unemployment rates are still nearly double the national average.

Esther George, chair of the KC Federal Reserve, responded to protestors with deference to Congress. “Our objective is to follow mandates of what Congress has made out,” she told the crowd. “The objective is not to slow down the economy; that would be irresponsible.” George continued by explaining that the objective of the Fed was to walk the balance beam between the ideal of full employment and the consequence of potential inflation due to an oversaturation in the job market.

Fed Up’s expert on economic forces, Josh Bivens of the Economic Policy Institute, said the Fed’s concerns about inflation should be adjusted in light of the impacts of the Great Recession. Bivens claimed a period of “overshooting” employment targets are necessary to heal the effects of that economic disaster, and that this period of overshooting is especially important to people of color, because it takes longer for their unemployment rates to catch up to national averages.

“[If] The Federal Reserve starts slowing the economy, it starts halting progress in reducing unemployment before the benefits of that reach the last people to be hired,” Bivens said.

Promising diversity

Fed Up seemed to impact members of the Federal Reserve Board on a few fronts. Several ambitious promises were made by members of the Fed, catalyzed by discussions held during the roundtable. Sebastian believes the most concrete impacts Fed Up had on the Federal Reserve were when Lael Brainard of the Federal Reserve’s board of governors committed to seriously considering a slate of candidates for board positions that more closely reflect America’s diversity. The board’s lack of diversity is a source of contention among Fed Up members, as the board is comprised of 16 white, predominantly male members. The only exception is Neel Kashkari of the Minneapolis Federal Reserve Bank, who is of Indian descent. Fed Up members are not the first to point this out, however. This summer a formal letter of complaint, signed by Bernie Sanders, Elizabeth Warren and some 127 other lawmakers, demanded the Federal Reserve open up to more diversity.

Another victory for the Fed Up campaign happened when Kashkari recommitted to an impressive research project studying racial disparities. Minnesota and Wisconsin, both states within Kashkari’s district, are rated the worst states in the country for black people to live based on a report by 24/7 Wall Street. Kashkari’s goal is to find the source of the disparities that propagate those statistics.

Blacks in Wisconsin face an unemployment rate of 21 percent which is more than quadruple the national average. Their incarceration rate is the third highest in the country, and their rate of home ownership is the tenth lowest. At a meeting earlier this month in Minneapolis, Kashkari sat down with Neighborhoods Organizing for Change to discuss the problem.

“Some of the racial disparities are a crisis, and we need to treat them like a crisis,” Kashkari said. “There’s something structural in the U.S. economy, in good times and bad, that black unemployment is almost always twice as high as white unemployment.”

However, in spite of all protestor efforts, in what is considered to be one of Federal Reserve Board Chair Janet Yellen’s most important speeches of the year, she explicitly stated that interest rate hikes were on the horizon. Yellen told the audience at Jackson Lake Lodge, “Indeed, in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months.” PJH

By Natosha Hoduski

Source

The toyseller's former private-equity owners said they were forming the fund on Tuesday after months of pressure from former employees and their representatives, along with some public pension funds and lawmakers including Warren, a former Harvard Law School bankruptcy expert who is considering a run for president in 2020. The groups, linked to the Center for Popular Democracy, estimate that workers are owed $75 million in severance pay, and they've also pressed Toys "R" Us creditors including Solus to pitch in.

Read the full article here.

The Nation - April 28, 2015, by Brad Lander & Karl Kumodzi - In August 2014, the municipality of Ferguson, Missouri erupted onto the national scene. In the wake of the killing of Michael Brown, we learned much about economic and political life in Ferguson and greater St. Louis County.

To many, it was no surprise to learn that, for years, African-American residents of municipalities throughout St. Louis County have been disproportionately and illegally stopped for minor offenses. Blacks are far more likely to be stopped, searched, ticketed, fined, and arrested. Many wind up jailed, leading to a cycle of lost jobs, drivers’ licenses, homes, or child custody. Some are beaten, terrorized, or—like Michael Brown—even killed.

It was more surprising to learn that in Ferguson, “Driving While Black” isn’t only about racial profiling: it’s also about municipal revenue. Fines and court fees have become the city’s second largest revenue source, and the over-criminalization of Black people has become a strategy for collecting taxes.

It is important to understand and address the revenue crisis facing U.S. municipalities. As cities have become unable to pay their bills, they often turn to regressive strategies that disproportionately harm people of color and low-income residents.

Ithaca, NY is like Ferguson. Up until January 2014, residents had to pay for installations and repairs of public sidewalks adjoining their properties—with one notable case in which 28 homeowners were forced to pay a combined $100,000 out of their personal pockets to the city for repairs. Detroit, MI is like Ferguson. After the city filed the largest municipal bankruptcy in US history, the city’s water department responded to pressures to lower their $90 million portion of the overall $20 billion debt by shutting off crucial water services to mostly Black low-income residents who owed over a mere $150 on their water bills. This April, Baltimore followed Detroit’s lead.

These cities are like Ferguson because of a common underlying problem: All across America, cities and towns are struggling to maintain enough revenue to provide crucial services to residents. The collateral damage of this revenue crisis—over-criminalization, utility shut-offs, the withdrawal of public services, and slashed budgets for schools—is dire.

Local Progress, a national network of progressive municipal elected officials, is working to address inequality from an often overlooked source: municipal budgets. In our new report, Progressive Policies for Raising Municipal Revenue, Local Progress lays out forward-thinking strategies and policy options that cities can pursue to restructure their revenue streams in a way that doesn’t fall disproportionately on the backs of their most vulnerable residents.

The roots of the municipal revenue crisis were decades in the making. Following the post-war desegregation of housing and education, and other civil rights victories of the 50’s and 60’s, racial animosity and the conservative backlash against taxation—referred to by historians as the tax revolt—helped to fuel the exodus of higher-income families from urban centers to suburban enclaves.

This “white flight” dramatically eroded the tax base of urban centers like Detroit, Cleveland, and St. Louis—and later of first-ring suburban municipalities like Ferguson.

The tax revolt also led directly to policies that dramatically reduced the ability of cities to collect enough revenue through property and other taxes. Most dramatic was the 1976 passage of Prop 13 in California, which contributed heavily to the erosion of California’s public education system and other public services.

In 2008, the Great Recession caused the municipal revenue crisis that had been brewing for decades to explode, spurring significant and rapid declines in general fund revenues for municipalities. In order to deal with the impacts of this dramatic shortfall, cities were forced to cut personnel, cancel capital projects (and their much-needed jobs), and slash funding for education, parks, libraries, sanitation, and more. These cuts hit low-income families the hardest. And they are especially harmful to Black families because African-Americans are 30 percent more likely to be employed by the public sector than other workers.

The strategies that many municipalities adopted to address the crisis hit low-income people of color the hardest. When property tax revenue declined in St. Louis County, fines-and-fees revenue increased in order to maintain revenue. Tickets are issued for everything from failure to cut one’s lawn to sleeping over at someone’s house without being on the occupancy certificate. In nearby Edmundson, the city averages $600 per person per year in court fines, and forecasts increasing revenue from these fines in their future budget proposals – essentially creating a hidden tax on the most vulnerable residents. Black residents throughout the region report feeling “as if their governments see them as little more than sources of revenue.”

Many towns have resorted to privatizing formerly public responsibilities such as trash collection, sewage, roads, parks, and introducing new fees to force residents to foot the bill directly. These fees and taxes are often extremely regressive, because as everyone is forced to pay a flat rate, poor people end up paying a higher percentage of their income. A recent study conducted by the Institute on Taxation and Economic Policy found that the nationwide average effective state and local tax rates are 10.9% for the poorest fifth of taxpayers and 5.4% for the wealthiest 1 percent. In fact, in the ten states with the most regressive tax structures, the poorest fifth pay as much as seven times the percentage of their income in taxes and fees as the wealthiest residents do.

Addressing the municipal revenue crisis is, therefore, a central barrier to achieving racial and economic justice in our urban centers, and to rebuilding a more democratic, just, and livable America with genuinely shared prosperity.

Luckily, there are creative and progressive strategies that municipalities can adopt to generate more revenue in a progressive way, such as:

● Expanding the progressivity of existing local income taxes by creating more tax brackets with greater differences between brackets, and doing the same for property taxes in order to generate more revenue from commercial and high-end development.

● Eliminating corporate tax breaks at the city level, particularly Tax Increment Financing and business improvement districts that come with tax breaks

● Restructuring fines so that residents pay different rates based on income. A $200 traffic ticket has no deterrent effect for a millionaire, but can be devastating for a low wage worker; a more rational fine system, like the one adopted in Finland, would be more fair and generate more revenue.

● Mandating that major tax-exempt institutions like hospitals and universities make genuine and fair payments in lieu of taxes (PILOTs) to help cover the costs of crucial city services that they use.

● Converting city services into municipality-owned utilities when possible, charging utility fees to all users, and applying conservation pricing so lower-income households pay a lower rate while bulk users—such as commercial and industry—pay higher rates

● Forming statewide coalitions of municipal elected officials, grassroots organizations, school boards, and other affected parties to change preemption and revenue policies at the state level.

These policy innovations and many more are detailed in our report.

Cities are America’s bedrock and its future: both for our country and for the progressive movement. Cities are home to 67% of the population, account for 75% of our GDP, and house our best public institutions and infrastructure.

The policy recommendations laid out by Local Progress in our new report can help municipalities develop progressive revenue solutions—so they can pay for public education, health, and housing programs that help families thrive, invest in the infrastructure of public transportation, climate resilience, parks that sustainable cities need, and stimulate inclusive economic growth that creates good jobs.

Through progressive revenue strategies, cities can turn the Ferguson-like cycle of disinvestment and inequality into a cycle of reinvestment and opportunity—and help make sure that our cities can become the models for our vision of a more progressive and prosperous America.

Source

Cuatro panelistas explican los logros y obstáculos de las marchas pro-inmigrantes de primero de mayo que llevan ya casi una década. Visitan el programa Héctor Figueroa, presidente del sindicato 32BJ, la abogada, directora de la Coalición del Norte de Manhattan por los Derechos de los Inmigrantes Ángela Fernández, el pastor luterano Fabián Arias de la iglesia Sión y Ana María Archila, co-directora ejecutiva del Centro por la Democracia Popular.