82 terms

SPEA V161 Exam 2

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What percentage do cities have their proportionate share of poverty?
142%
What is the great internal migration of the rural poor caused by?
the rapid mechanization of agriculture
Who measures poverty & sets the "poverty line"
Bureau of the Census
Why hasn't poverty rate declined?
Increase in inequality of wages for those with specialized skills vs. less skilled workers
Decline in manufacturing employment
ghetto
characterizes the poor, inner-city neighborhoods, usually with large black or sometimes, hispanic populations
harvest of shame
1960 CBS report regarding migrant farm workers and the living conditions and wages of these workers
Early 1960's
shift in mindset regarding poverty
-move from deserving vs. undeserving poor
-view of poverty as systemic rather than individual
war on poverty
germinated under president JFK
-no victory
-poverty rates fell until late 60's and have leveled off since then
-unemployment rates dropped but the number of people receiving AFDC more than doubled
-believed to be partially caused by a change in the psychology of the poor about taking assitance
-moor poor began to demand all benefits that they were entitled to
Welfare Reform
passed by congress in 1996
-response to the increase in demand and utlization of welfare programs
-abolished AFDC that was replaced by block grants to the states
-limited public assistance to five years across recipients lifetime
-required recipients to work
-increased funding for childcare
Economic Opportunity Act (EOA)
passed in 1994
-focus on giving people the means to work their way out of poverty
-set up 1,000 community action programs (CAPs) by end of 1960's
-programs developed to empower the poor
Lyndon Johnson's vision of the Great Society
Addressed issues of fairness and justice
-attacked barriers to full participation of disadvantaged groups in american life
race riots
1965-1968
-first major riot in the watts section of LA
believed to be a symptom of poverty, high unemployment, racial discrimination
melting pot
image of american cities based on the experience of immigration from europe in 19th and 20th century
-created a "universal nation" based upon assimilation and the "americanizing" of new immigrants
students rapidly learned english
mosaic/salad bowl
views each ethnic group as one tile in a mosaic
-groups remain separate and recognizable but form a new whole
-canada admits more legal immigrants than the usa and has adopted the mosaic view of immigration
-may advocate for bilingual education
Chinese Exclusion Act 1882
banned immigration from the Orient
Quota Act of 1921 and Immigration Act of 1924
ended open immigration and established a national origins quota system. reduced total immigration and favored immigrants from Northern Europe
Immigration and Nationality Act Amendments 1965
increased total number of immigrants and abolished the national origins system. establish family unification as the largest basis for admission to the us
The Refugee Act of 1980
allowed political refugees as a distinct group
Immigration Reform and Control Act (IRCA) 1986
allowed illegal aliens who could prove sustained residence in the US to apply for citizenship
Immigration Act 1990
increased the total number of legal immigrants and began an immigration lottery system, which allowed immigrants for reasons other than family unification
Illegal Immigration and Reform and Immigrant Responsibility Act 1996
took steps to reduce the number of illegal immigrants and included funds for enforcement and criminal sanctions. made no change in legal immigration.
birthright citizenship
unique to the US and is guaranteed by the 14th amendment
-developed to prevent southern states after the civil war from disenfranchising newly freed slaves
-provides citizenships for anyone born in the US regardless of their parents citizenship status
View on Immigration
Business tends to have a permissive views on immigration
-economic contribution of immigrants is evident and contributes to a highly skilled labor force
others would cut immigration drastically (Federation for American Immigration Reform - FAIR)
Labor market argument that states immigrants have low level skills and education
Proposition 187 (1994)
voters in CA passed Prop 187 by a large majority in order to slow illegal immigration
-would have barred illegal immigrants from public schools, higher education, public health care
-a "save our state" movement
-opponents saw it as bigotry
-prop 187 was ruled unconstitutional
Illegal Immigration & Reform and Immigrant Responsibility Act (Sep 30, 1996)
restricted illegal immigration
-authorized additional border control guards and Immigration and Naturalization service agents
-increased criminal penalties for immigration law violations
Rust Belt
term used to describe communities that are located in the midwest and central US that have historically had high levels of manufacturing
-immigration is slowing and in some cases reversing decades of population decline in american rust belt communities
remittances
many migrants send money (remittances) back to families in their countries of origins
positive neighborhood effect
demand goes up = housing prices and rents rise = landlords invest in property for repairs and maintenace because they know they will have a return on their investment
Negative neighborhood effect
demand goes down = rents decline = landlords disinvest as profit margins decline = compromises the long term future of the building
gentrification
high levels of investment in both the restoration of old building and the construction of new ones in areas with high demand
-gentrification is positive for municipal/city government due to the fact that rejuvenates areas and increases tax revenues
mortgage
credit instrument for buying a house
long term loan that is secured by the house itself
level debt instrument (same payment each month)
extremely sensitive to interest rates
typically requires a down payment of 20%-25%
modern home financing
us policies implemented in 1930's that increased home ownership
-originated during the great depression as a series of federal policy
-federal gov began offering mortgage insurance through the federal housing administration
mortgage insurance
goals to open up home ownership to more people
-stimulate the national economy by encouraging residential construction
taxation of housing
fed tax policy has major effects on the housing markets. because of favorable tax treatment, millions -homeowners view their houses as physical shelters and tax shelters
-property tax is a mainstay of local government finance
-mortgage interest is deducted from income taxes
largest implicit federal housing program
tax breaks for property owners
-program with $69.9 million in subsidy for property taxes and mortgage interest combined
municipal governments impact housing through:
-city regulations
-investment in infrastructure
-quality of housing through building inspections
-may receive Community Development Funds for housing but rarely make direct investments in housing
Federal Housing Policy
-began with the great depression
-housing act of 1937 funded local Housing Authorities
-developed the urban housing projects that were large, high-rise design
urban renewal
conceived during the great depression
easier for developer to complete projects outside of the city
-no land assembly problem
-residual value problem (had to pay cost of structures and removal vs. just landed
-often displaced residents = created housing problems
-negative impacts fell disproportionately on minority group members
-referred to as the "negro removal" program
-program ended in 1973 because of problems and failure to create housing
housing and community development act of 1974
still stands as a major part of federal urban policy
-focused on rehabilitation and preservation
housing discrimination
illegal to discriminate against any person in the selling or renting on the basis of race, color, religion, etc
-bars discrimination in housing finance
-prohibits "redlining"
-banned practice of "blockbusting"
redlining
when banks had refused to lend in areas/neighborhoods with higher risk of default
blockbusting
where realtors would signal/warn of black immigration in white neighborhoods in order to trigger selling under market value to sell at a higher level later
housing segregations
continues to be a high level of de facto segregation of black and white americans
why are housing segregations still a high level of de facto segregation?
-income disparity
-tipping point phenomenon
-discrimination in sale and renting
-discrimination in mortgage lending
-self segregation ( want to live with people that are similar)
-side effects of public policy
tipping point phenomenon
certain $ of blacks before whites will sell and leave
housing bubble of 2007
lower costing homes were most negatively impacted by the housing bubble
federal reserve bank of st. louis
the housing market in foreclosure peaked in 2010-2011
-resulted in an increased amount of debt in US households
export model
most commonly used model to explain the urban economy
-urban economies are not self sufficient
-for cities to survive or grow it must sell something to the outside world
-two sectors: export sector and local sector
--export sector brings in revenue that supports the local sector
-anyone who produces a product that is sold outside the city is in the export sector
implicit competition
most competition takes place between firms/businesses
explicit competition
some economic competition is direct and occurs between cities in regards to incretives and the existence of amenities and factors that benefit business and industry
the economic development environment that the city provides is dependent on these factors
-location and the cost of transportation
-climate and natural amenities
-existing infrastructure
-cultural infrastructure (quality of life)
-quality of the local labor force
-entrepreneurial spirit
-public safety
-municipal and state tax burden
-size of the city
-localizing economies
agglomeration economies
provides advantages over small communities that include a variety of suppliers, customers and superior infrastructure. suggests a more efficient economic machine in larger area. more important for smaller/start up firms as they provide an "incubator" role for small businesses.
diseconomies of scale
include that in large places the costs are higher, there is more congestion/traffic. as companies grow and are more self-sufficient the size of a community becomes less important
localization economies
being located near other firms in the same industry despite the fact that they compete provides a benefit to the firms.
-silicon valley example - companies are able to benefit from being near similar companies by having trained employees, suppliers, utilize resources efficiently, etc.
competition frontier
the point at which the combined costs of production and transportation for companies at different locations are the same
when competition frontier is very far away
when transportation costs are low in relation to the total value
-examples: walmart, advertising industry
when competition frontier is very close to home
when transportation costs are high relative to the value of the product
ex. cement and personal services
globalization of competition
we live in a globally competitive economy that is driven by:
-decreased cost of communication
-improvements in transportation
-reduced trade barriers
globalization of the economy
has been felt most in manufacturing. has resulted in right to work and weakening of labor unions and questions about the long term effect of world trade on services and other white collar work
interplace economic competition
-most communities maintain an economic development agency and compete to attract and retain local companies
-work to coordinate grants, tax abatements, direct expenditures, and offsetting operating costs that are designed to attract and keep jobs in the area
-this process shifts some of the costs of industrial and commercial development from firms to the public thus reversing the normal flow of taxation
biggest concern for cities
demand for high quality public services and disdain for tax increases are in opposition to one another
-higher tax rates drive away new businesses
-new business firms want high quality municipal services
-cities must pay for unfunded mandates of the federal and state government
fiscal capacity
size of the tax base relative to the fiscal needs. a growing and prosperous city polulation = increase in revenue. a poor population = decrease in revenue
fed gov is the largest collector of taxes
transfers a great deal of these funds to the states and individuals. referred to as "money pump" characteristic of the fed gov
what percentage are direct transfers for human resources of which are payments made to individuals (social security and medicare)
60%
personal income tax, payroll taxes (social security) and corporate income tax
largest source of revenue for fed gov
border effect
state government must be cautious about taxation for fear of losing business and residents to neighboring states
local gov is more restrained by competition for business vs state gov
property taxes are greatest revenue for local gov
-very few local gov use personal or corporate income tax for fear of losing people and business
-local gov provide the largest amount of public servies to residents and a larger number of employees than the fed gov
-largest local gov expenditure is for education
revenue taxes and taxes for local government
property taxes, intergovernmental transfers (state to local), and charges such as water sewer etc
property tax
considered a stable source of revenue for local units of government because it is immobile. makes property taxes difficult to evade.
-property that is privately owned is taxable
-property owned by non-profits is not taxable
department of local government finance in Indiana
sets the maximum growth factor each year, which cannot exceed by the local units of government regarding the tax rate and therefore the amount of funds that can be raised
property taxes and zoning
fiscal zoning is used to control land use to hold down tax rates.
-some property raises more revenue with less demand on public services = a win for local government
borrowing by municipal government
local units of governments borrow in order to make capital expenditures. they cannot borrow to generate funds for general operating expense.
user benefit equity
the idea that those that benefit from a capital proejct should pay for it.
municipal bonds
promissory note or commitment of the city to pay back funds.
general obligation bonds
must be voted upon or allowed to receive public input to pass
-secured by full faith and credit of city gov
revenue bonds
*backed by the stream of revenue produced by the project (toll roads, airport, etc)
-does not impact the debt limits
-interest paid on municipal bonds is exempt from fed income tax
balanced budget requirements for local government
result of several city bankruptcies in 19th century
bond ratings
important to municipal bond financing
moody's investor's service
standard and poor
examines the entire financial situation of the municipal government
estimates the soundness of the fiscal situation
higher the rating the lower the interest rate you have to pay on bonds
making municipal budget
is a statement of the policies of the city gov
-pressures of demand for services and low tax rates
-operating and capital portions of the budget
local gov must budget for obligation of the state and fed gov
budget prep
prepared by executivebranch
heard by the people and allow for input
approved by leg branch
public education
the largest local expenditure
fiscal disparity
poor need more services = greater tax burden