The Washington Post has a fantastic (and fantastically depressing) series of infographics about the budget crises facing many of the 50 states, as well as how each plans to adjust its budget accordingly.

Budget Shortfalls

More than 40 states are projecting billions of dollars in budget shortfalls for fiscal 2012. But, unlike the federal government, most states have some sort of balanced-budget law. That means the shortfall — the gap between state revenues (taxes, fees, etc.) and the cost of running the government — must be closed before a state adopts its final budget for the year.


Pension Liabilities

The question over pension funding revolves around the appropriate discount rate to use when valuing the worth of future pension payments. Most government pension plans use a discount rate of about eight percent. But many economists believe that rate understates the liability, and say it would be better to use the so-called risk-free rate on Treasury bonds of about five percent.


Proposed Cuts

At least 16 states have proposed kuts in pre-kindergarten and/or K-12 spending.
At least 23 states have proposed major cuts to health care services.
At least 14 states have proposed layoffs or cuts in pay or benefits for state workers.
At least 15 states have proposed cuts to higher education.
Some governors have proposed revenue-raising measure to help balance spending cuts.

Room for Debate in the New York Times recently posed the question: Places like Detroit are steadily losing people. Can empty urban lands be brought back to life?

A number of experts to weighed-in on this urban planning question. I’ve summarized each contributor’s response here, but also recommend reading the full text of their responses for a more nuanced understanding of their viewpoints.


Promoting Ungrowth
Jennifer Bradley is a fellow with the Brookings Institution Metropolitan Policy Program. Her work focuses on land use and economic development in Great Lakes metropolitan areas.
—Bradey argues that there are many of potential uses for vacant and abandoned land: urban agriculture; watershed restoration; park networks, public arts zones, etc.
—She argues that growth as a goal is an outdated mindset: “The nation now needs a parallel commitment to physical ungrowth. Ungrowth is not surrender but a phase of urban evolution.”
—Remaking cities is cost-intensive, and not supported by the market. Foundations don’t have sufficient funds to make up the difference.
—Bradley proposes that cities be able to reallocate money they already receive from the federal government for ‘unbuilding’ programs. “The federal government spends $104 billion a year subsidizing home-building through the mortgage interest deduction. What if it took 10 percent, or even 1 percent, of that money to help places unbuild and reinvent?”


How not to ‘Save’ a City
Richard Florida is director of the Martin Prosperity Institute at the University of Toronto. He is the author of “The Rise of the Creative Class” and “The Great Reset.”
—Florida notes that few ‘planned shrinkage’ and ‘benign neglect’ efforts have been successful in the past.
—The challenge is keeping the fabric of the community intact and ensuring that re-development and/or revitalization really do occur. “How do we guarantee that the notion of shrinking cities does not become cover for private developers looking to assemble massive parcels of centrally located and well-connected urban land on the cheap?”
—Florida points to successful bottom-up, organic renewal schemes, such as New York’s Greenwich Village and Boston’s North End to Columbus’s German Village as positive examples.
—Residents and local community organizations should spearhead revitalization.


No City is Disposable
Toni L. Griffin is an adjunct associate professor at the Harvard University Graduate School of Design and an urban planner and designer.
—Griffin is surprised by reactions to the Census figures regarding Detroit’s 25% decrease in population: “Are we really willing to allow one of the core centers of the Great Lakes Region and the birthplace of the middle class to slip into the abyss?”
—He reaffirms the value of the city as “engines of the economic, civic and cultural life of a region.”
—Griffin points to “the failure of urban policies that have allowed regional sprawl to decentralize the urban core, leaving behind crumbling and excessive infrastructure, concentrations of generational poverty and weakened civic capacity.”
—He proposes strategies for (1) reversing the trend towards sprawl and (2) exploring non-traditional strategies for how extra land can be transformed into more productive uses.


An Age-Old Problem
Sam Staley is the director of urban and land use policy at Reason Foundation and the co-author of “Mobility First: A New Vision for Transportation in a Globally Competitive 21st Century.”
—Urban decline is not a new phenomenon.
—Failure to find a solution is sobering; “No city has yet found the silver bullet to bring them back on a broad scale. We haven’t even found a magazine of conventional bullets that can be fired in a way to bring most of these cities back.”
—Staley recommends a people-based approach to revitalization (rather than bricks-and-mortar); a “policy framework that focuses on rebuilding people-based competitive advantages in an economy that is highly mobile, global in scale and footloose.”
—Declining cities should: “ensure their neighborhoods are safe, cut the costs of doing (and opening) businesses, ensure access to quality elementary and secondary education, provide transparency in government spending and programs and maximize the value of their existing physical infrastructure.”


Ways to Reuse Vacant Lots
Michael A.Pagano is the dean of the College of Urban Planning and Public Affairs at the University of Illinois at Chicago. He is co-author of “Terra Incognita: Vacant Land and Urban Strategies” and co-editor of Urban Affairs Review.
—Pagano offers a series of suggestions for land re-use projects, including: gardens; side yards; outdoor art; and park-lets.
—He also suggests ways to re-structure the the tax system. “Cities should reconsider their tax structure to provide incentives for property owners (as well as city officials) to maintain their buildings and improve their vacant land.” Specifically, he recommends a land tax with a “use” imperative and imposing new fees that will keep vacant spaces clean and secure.


An Un-American Idea
Terry Schwarz is the director of Kent State University’s Cleveland Urban Design Collaborative.
—Schwarz points out that, while some cities are shrinking, the U.S. population overall is growing.
—”Growth management practices are sometimes implemented at the local or regional level, but we urgently need to plan growth at the national scale to respond to emerging challenges of climate change, rising energy costs and water scarcity. Repopulating shrinking cities must be part of the equation.”
—She suggests retrofitting old cities and re-use older urban infrastructure, and treating places like Detroit as “laboratories for understanding and restoring urban ecosystems.”


The Paradox of Greater Cleveland
Brad Whitehead is president of the Fund for Our Economic Future, a philanthropic network in northeast Ohio.
—Whitehead points out the trend toward growing regions surrounding shrinking cities:
“Take the case of northeast Ohio. According to the latest census, each of our major cities lost significant population over the last decade: Cleveland 17 percent, Akron 8 percent, Youngstown 18 percent. Yet the region’s population overall grew slightly over this period — and surprising to many — the economy outperformed the nation’s on many measures during the Great Recession.”
—Cities aren’t necessarily shrinking, they are spreading out.
—”When the regional population grows 1 percent but developed land increases 60 percent over a few decades, big problems result. Hollowed-out core cities are only the most visibly painful manifestation.”
—Whitehead blames government structures that pit neighboring communities against one another through incentives.
—He suggests “regional tax policies that discourage “beggar thy neighbor” municipal financing strategies and land use policies that more closely align infrastructure to economic and population growth should be at the top of any governor’s, county executive’s or mayor’s list.”


What About the Suburbs?
Ellen Dunham-Jones is a professor in the School of Architecture at the Georgia Institute of Technology. June Williamson is an associate professor at the Bernard and Anne Spitzer School of Architecture at The City College of New York. They are co-authors of “Retrofitting Suburbia: Urban Design Solutions for Redesigning Suburbs.”
—Shrinking cities are not a new phenomenon in history: “What’s perhaps more remarkable today are shrinking suburbs — and the specter of the end of cheap oil.”
—Failed strip malls and “zombie” subdivisions across the country are examples of extreme sprawl and demonstrate our collective dependence on cars.
—The authors suggest: “Transit-served properties could be targeted for redevelopment into mixed-use, walkable nodes and corridors, as near Northgate Mall in Seattle and along Columbia Pike in northern Virginia. More modest revitalization can occur through the re-inhabitation of former strip malls with libraries, schools and other community-serving uses like the Jackson Medical Mall in Jackson, Miss.”
—”Incentives for filling in and re-using urban land must be balanced with more robust disincentives to urbanize additional land at the fringes. First steps include revising local zoning and subdivision regulations and conducting greyfield audits of underused parking lots and vacant land.”

The U.S. economy is recovering from a severe recession, but some industries are unlikely to ever full recovery.

A new analysis by research firm IBIS World looks at 10 industries that appear to be dying. The list isn’t exactly shocking, but it represents a mix of sectors that are being left behind by technology or have been hurt by cheaper overseas competition.

The biggest industry profiled by IBISWorld is wired telecom carriers, largely being supplanted by cellphones and the Internet. The dominance of the Web and digital media also puts Newspaper publishers, record stores and video-rental companies on the list. Meanwhile, photofinishing also takes its place among the top 10 dying industries thanks to the growing influence of digital photography.

Cheap imports are blamed for a decline in mills and apparel manufacturers. Companies that rent formal wear are also counted among dying industries amid both competition from abroad and lower prices making owning your own formal wear a more attractive option than renting.

The only clear recession casualty that makes the list is manufactured home dealers. The housing boom led to a surge in the industry, but now years after the bubble burst the sector has continued to struggle.

The full list is below:

via the Wall Street Journal

The New York Times Economix blog and William Easterly points us to a provocative new paper by Danny Quah on how the center of the world economy is shifting eastward.

Professor Quah, an economist at the London School of Economics, has calculated “the average location of economic activity across geographies on Earth” through the last few decades, and found that it has been moving further east:

[I]n 1980 the global economy’s centre of gravity was mid-Atlantic. By 2008, from the continuing rise of China and the rest of East Asia, that centre of gravity had drifted to a location east of Helsinki and Bucharest. Extrapolating growth in almost 700 locations across Earth, this article projects the world’s economic centre of gravity to locate by 2050 literally between India and China. Observed from Earth’s surface, that economic centre of gravity will shift from its 1980 location 9,300 km or 1.5 times the radius of the planet.

Here’s an animated look at this economic migration:

Black dots represent the world’s actual economic center of gravity, shown every three years from 1980 to 2007. Red dots represent projections for every three years thereafter until 2049.

Professor Easterly, an iconoclastic development economist at New York University, argues that Westerners should not “get hysterical” (as he assumes they will) in response to this map.

After all, he says, growth is not a zero-sum game. Rather, the enrichment of our trading partners means that there are more customers to buy American products. China and India may be claiming a larger share of economic activity, but that doesn’t mean the raw amount of economic activity in the United States will fall as a result. The overall pie just gets bigger.

That may be true. But to the extent that economic dominance corresponds to greater political power as well, there may be more for Americans to worry about as the “economic center of gravity” shifts closer to China.

via The World Economy Shifts Eastward
By CATHERINE RAMPELL

On St. Patrick’s Day, the Bloomberg administration announced that New York City had “received 18 responses from academic institutions seeking to develop and operate a new applied science and engineering research campus in New York City.”

These expressions of interest, from institutions as far-flung as Stanford and the Indian Institute of Technology in Mumbai, are far from final plans, but they represent the next step in an ambitious concept of expanding the academic footprint in New York City.

Is this a smart economic development plan?

The original request for expressions of intent was made in December, when the city expressed its willingness to “make a capital contribution” and, even more tantalizingly, suggested four possible development sites: the Navy Hospital Campus at the Brooklyn Navy Yard; the Goldwater Hospital Campus on Roosevelt Island in Manhattan; Governors Island; and the Farm Colony on Staten Island.

A new campus for Stanford is surely not the only possible use for the city’s extremely valuable real estate holdings.

London’s financial sector was given a shot in the arm when that city’s underused docklands — the Canary Wharf area — were turned into an enormous modern office complex, where today more than 90,000 people work in more than 14 million square feet of space. Given the difficulties in rebuilding ancient cities, that extra space helped keep London competitive in global finance.

But New York City already has two financial centers — the Wall Street area and Midtown Manhattan — and for all the problems that prevent building in Manhattan, it’s still a lot easier than in London or in Paris.

Moreover, the sites in question don’t seem like natural spots for high-finance spillovers. Governors Island (in New York Harbor just off the southern tip of Manhattan, with historical buildings on its 172 acres), may be physically closest to Wall Street, but it is still probably too far, even if rail links were added to ferry service, to attract many core financial companies.

The Navy Yard hospital site might be attractive for finance, but it is hard in good conscience to suggest that New York should become even more overdependent on finance.

The Bloomberg administration’s aim of attracting an applied science campus was explicitly motivated by a sensible desire to maintain a diverse economy. Because Mr. Bloomberg himself was a technology entrepreneur, it’s not surprising that he sees the value in engineering campuses, and some of the sites, like Governors Island, already look a bit campuslike.

The Roosevelt Island site is almost in the shadow of the medical and scientific centers (Memorial Sloan-Kettering, Rockefeller University, New York-Presbyterian Hospital/Weill Cornell Medical Center) on the Manhattan side of the East River.

The late Senator Daniel Patrick Moynihan of New York is often credited with saying that the way to create a great city is to “create a great university and wait 200 years,” and the body of evidence on the role that universities play in generating urban growth continues to grow. (Disclosure: I work for a university.)

More than 20 years ago, Adam Jaffe published an article that used patent data to show the links between universities and nearby companies. He found that corporations patented more in areas where nearby universities did more academic research.

In 2004, Enrico Moretti investigated the remarkable tendency of individual wages to be higher among people with more skilled neighbors and found that earnings were a lot higher in areas that had land-grant colleges, including the Massachusetts Institute of Technology before 1940. Albert Saiz and I later found that these old land-grant colleges were associated with population and income growth.

A Harvard graduate student whom I advise, Naomi Hausman, recently circulated a working paper showing the power of universities to support their local economies. The Bayh-Dole Act in 1980 enabled universities to patent innovations produced with federal funds, and this led to a surge of commercially relevant university patenting activity and, Ms. Hausman found, an explosion of related economic activity in nearby areas.

The stories of Silicon Valley and Bangalore are closely connected to their strength in engineering. In my book “Triumph of the City,” I tell the story of the Federal Telegraph Corporation — the ur-tech company of Silicon Valley. The boy genius who first started the company died in a freak collision with a telephone pole (my editor wisely told me to remove the line “telephone killed the radio star” from the book), and his financial supporters asked a Stanford professor to recommend a replacement.

That replacement, Cyril Elwell, ended up creating a company with deep ties to the university, plenty of spinoffs and even a summer job for the young Fred Terman, who would later lead Stanford’s engineering program and the formation of the Stanford Industrial Park.

New York City is a bit unusual among America’s more successful older, colder cities in that only one-third of the city’s adult population has a college degree, which is above the national average but below the figures for Boston and Minneapolis (each 43 percent) and Seattle (54 percent).

Typically, urban reinvention has been quite closely associated with education, but New York City’s numbers are somewhat misleading both because commuters often bring huge amounts of learning with them and because the city is so rich in the nonformal human capital of street smarts and on-the-job training.

Yet despite the enormous strengths of New York, it’s hard not to like importing a little more applied science, especially when we’re talking about idiosyncratic properties like Governors Island.

At this point, I can only agree with broad idea and await the details of the proposals. A new engineering campus for New York sounds great, though not at any price. Cost-benefit analysis is as important for subsidizing a new campus as it is for evaluating a high-speed rail line.

By Edward L. Glaeser, an economics professor at Harvard and the author of “Triumph of the City.”
Via Economix

Read more about the project here

Check out this fantastic interactive map of adults with college degrees! You can filter data by gender, race, income, and county. The added bonus: you can animate the map to see trends from 1940-2009.

Adults with college degrees, 2005-2009

Hispanic adults with college degrees, 2005-2009

via Sociologial Images