Forging a different path

March 13, 2014 — So far, our series has focused on diagnosing the existence, consequences, and causes of San Jose’s chronic maladies. In this final installment, we turn to the question of the appropriate prescriptions.

Sticking with the longstanding approach — each city fending for itself, catering to corporate needs, living subservient to the whims of mobile capital, ignoring the revenue side of the equation — does not seem likely to change the prognosis for San Jose. After all, the city has tried this approach for decades, and it has not worked to maintain a robust level of needed government services (and a well-compensated workforce to provide them) or to promote regional equity across Silicon Valley.

Some people are fatalistic about the status quo, not imagining that there is an alternative path. As San Jose’s mayor Chuck Reed said in an interview: “If we had the same jobs-to-housing ratio that Palo Alto has, we wouldn’t be having this conversation, because we would be like Palo Alto — we would be rich.” As for those rich cities: “Good for them. We just don’t happen to be one of those cities.”

But there is plenty that could be done to move toward a system less characterized by social Darwinism, and we begin to explore some of those possibilities here. They include sharing revenues equitably throughout the region; efforts at the national level to deter jurisdictions from handing out incentives — either on their own initiative or as the result of not-very-subtle blackmail — to attract or retain corporate employers; and, in California, modifications to Proposition 13 to restore to localities greater flexibility in meeting their revenue needs.

Typically, local officials have given aid and comfort to the maintenance of the status quo not only by participating in interregional and intra-regional competition, but also by reinforcing the sense either that the status quo is beneficial, or that there are no practical alternatives, or both. The emergence of local leaders prepared to break from that line would be an important step toward serious consideration of the alternatives.

Creating more winners than losers

Before he became a full-time professor at the University of Minnesota, Myron Orfield spent a few years in the 1990s studying metropolitan areas around the country and proposing ways to alter that seemingly inalterable reality: that, within the same regions, some jurisdictions are rich while others are poor.

Orfield was a state legislator in Minnesota at the time and had been instrumental in creating an integrated regional government for the Twin Cities metro area. In 1998, at the behest of an Oakland-based nonprofit, Orfield turned his attention to the San Francisco Bay Area. The same problems showed up there as elsewhere: deep fiscal imbalances between cities, intertwined with self-reinforcing segregation by class and race. The inequalities between San Jose and other cities in the Valley were an important subfactor in this regional picture.

Orfield proposed a solution relying on a mechanism called tax-base sharing. Under this system (which was critical to the regional integration of the Twin Cities), municipalities pool a portion of their revenues, which are then distributed among them by need. The fundamental principle was one of fairness and equity — the idea that, “People of moderate means should not have inferior public services because they cannot afford to live” in rich communities, as Orfield wrote in his Bay Area report, and that “public services such as police and fire, local infrastructure, parks, and particularly local schools should be equal on a metropolitan level.”

As with similar proposals across the country, Orfield’s Bay Area plan drew a fair measure of local attention but was stymied by the opposition of the more fortunate cities — those who saw themselves as being on the wrong end of the redistribution. Bob Brownstein, the former San Jose budget director, said Orfield’s was not the only proposal of its kind, nor was it the only one to meet this end. “I’ve seen it happen at least three or four times,” Brownstein said. “It always fails, because the current situation benefits some people and is bad for others.”