Should you pay taxes on your bus pass?

By Rob Moore

Earlier this month, I took part in the Columbus Transportation Innovation Challenge, a weekend-long “hackathon” focused on tomorrow’s transportation hurdles in Central Ohio.

The challenge unearthed an exciting new proposal. The weekend’s winning team proposed that Columbus replicate Seattle’s Commuter Benefits Ordinance, set to take effect January 2020.

Seattle’s ordinance requires employers to allow their employees to write off the taxes for all qualified transportation expenses besides parking. The goal of Seattle’s ordinance is to provide a benefit for lower-income workers and to encourage the use of public transportation.

According to Seattle’s ordinance, a middle-income worker using public transportation would save over $350 a year in federal taxes due to the benefit. A minimum wage earner would save over $230. This alleviates financial strain for lower- and middle-class workers using alternative transportation, but it also gets more cars off the streets, alleviating congestion and reducing commute times for those who do drive.

I’ll admit: I was skeptical at first. Our country’s experience with employer-provided health care makes me wary of trying to solve problems of equity through the medium of the corporation. That being said, commuter benefits work a bit differently than health care.

Commuter benefits allow employees to elect to use pre-tax income to pay for alternative commuting expenses. This is actually enabled by federal tax code, which allows employers to provide these benefits to their employees.

Because commuter benefits are a federal tax expenditure, the cost of the benefit is directly borne by the federal government, not by local government or the businesses themselves. Because of this, business groups have actually supported these requirements in other cities, with the Berkeley, California, Chamber of Commerce calling its local ordinance “a rare opportunity to reduce taxes for both businesses and employees.”

In this way, a commuter benefits ordinance is an economic development tool for the city, lowering the cost of commuting and reducing frictions within the local labor market that keep employees from getting to places of employment. In a tight labor market, employers should be excited about this opportunity.

So if commuter benefits are so great for employers, the natural question is this: Why do we need to compel businesses to provide them in the first place?

In Seattle, a 2016 survey of businesses found that the major barrier to providing the benefit was an administrative burden. While that burden should not be written off right away, the additional income generated by the tax write-off should make up for the burden if there is a minimum utilization of the benefit.

Seattle also included $200,000 in its 2018 budget for education and outreach to businesses around commuter benefits and exempted very small businesses from the mandate.

Mandated commuter benefits are one tool the city has to reduce inequality, grow the economy and build a more sustainable local transportation system. While there will be some kinks to work out, the city should certainly take this proposal seriously.

This story first appeared in Columbus Alive.

Team Proposes Mobile App Transit Subsidy

(Columbus, Ohio) - This weekend, a team of professionals and community members that included Scioto Analysis’s Rob Moore proposed the country’s first low-income subsidy delivered via mobile app.

The subsidy would be provided to low-income transit riders in high-poverty zip codes and would be administered by Franklin County. It would be credited to families through the soon-to-be-released SMART Columbus multimodal transit planning app, a smartphone application that will allow commuters to pay for a variety of different transportation modes through one payment system.

“COTA’s change to a ridership-focused model has been a success in increasing ridership, but has left gaps in coverage,” Moore said. “A subsidy paid through a transit planning app could help people in these coverage deserts reach transit corridors.”

The team proposed a 2019 pilot followed by scale-up and full implementation phases in the coming years.

The proposal was a part of the Transportation Innovation Challenge, organized by The Purple Aisle, a national civic leadership accelerator. See further coverage of the event and other new ideas on ABC 6.

Report Suggests Ohio Economic Recovery Dampened by Rising Inequality

Columbus, OH (November 15, 2018) – This morning, Gross National Happiness USA and Scioto Analysis released a comprehensive report of Ohio’s recovery from the Great Recession.

The report finds that Ohio has rebounded well from the Great Recession, but that its recovery has been hampered by growing inequality.

“The average Ohio family spent over $3,000 a year more in 2016 than in 2009 in real terms, which indicates that family incomes have been growing on average,” said Rob Moore, author of the study, “at the same time, inequality using traditional measures has grown by 3% over this period. Inequality has been shown to be a drag on economic growth by harming social cohesion, increasing crime, and dampening investment.”

The report, using the genuine progress indicator (GPI) framework, factors in broader economic impacts than traditional economic measures such as gross domestic product (GDP).

“By factoring in the impacts of indicators such as underemployment, family breakdown, higher education, and environmental degradation, this approach gives a more complete picture of Ohio’s recovery from the Great Recession,” Moore said, “adopting alternative measures like GPI can help policymakers have a better idea of the true state of the economy.”

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Gross National Happiness USA is a 501c(3) Tax-Exempt non-profit organization with a mission to increase personal happiness and our collective wellbeing by changing how we measure progress and success.

Scioto Analysis is a policy analysis firm that provides policymakers and policy influencers with evidence-based analysis of pressing public problems.

Analyst Launches New Policy Firm Scioto Analysis

Columbus, OH (November 13, 2018) – This morning, Policy Analyst Rob Moore launched Scioto Analysis, a new policy analysis firm based in Columbus, Ohio. Scioto Analysis is committed to providing policymakers and policy influencers with evidence-based analysis of public policy problems.

Scioto Analysis will fill a gap in the supply of information about policy impacts to policymakers.

“According to a 2013 study by the Pew Charitable Trusts, the average state conducts only two cost-benefit analyses a year,” Moore said, “this means that thousands of pieces of legislation are passed every year without policymakers having access to basic information about their economic impact.”

Scioto Analysis plans to focus its work on the policy analysis needs of state legislative chambers, state agencies, and local governments. It will also make its policy analysis services available to nonprofits and private businesses interested in the impacts of public policies.

On Thursday, Scioto Analysis will be releasing a paper on the state of Ohio’s recovery from the Great Recession in conjunction with Gross National Happiness USA.

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Scioto Analysis is a policy analysis firm that provides policymakers and policy influencers with evidence-based analysis of pressing public problems. More information can be found at http://www.sciotoanalysis.com.

Serious About Happiness: 5 Ways to Take Happiness Seriously

By Rob Moore

A lot of people I know scoff when I start bringing up “happiness” in a public policy context. Happiness doesn’t get the attention that other social goals like economic growth, unemployment, and national security get. For some reason, people don’t take happiness seriously.

I’m sure you could brainstorm dozens of reasons that people don’t take happiness seriously in public policy. One reason in particular, though, especially interests me: our lack of a method to measure happiness.

Economic growth has GDP. Unemployment has simple ratios for measurement. And national security? Well, let’s just say we know when national security becomes a public focus.

Happiness, on the other hand, is a more elusive concept. How do we know when a society is happy? How do we make this a serious, measurable concept?

I’ll put forth five ways that we try to measure happiness in society, five rigorous frameworks that show that happiness improvement is a serious and attainable social goals for governments.

Preference maximization, or economic growth. This definition says that the more options people have in a society, the more likely they are able to choose happier lives. This framework is both liberal (focusing on the ability of individuals to choose their own lives) and utilitarian (focusing on maximization of happiness through quantification).

Economic growth is traditionally measured through Gross Domestic Product, or GDP, the total value of goods and services provided in a country every year. Benefit-cost analysis is the systematic public policy tool we have for measuring economic impacts of public policies.

An alternate measure of economic growth is the Genuine Progress Indicator, or GPI. GPI works to measure economic growth using what we know about the economic impacts of inequality, consumer good durability, environmental indicators, unemployment, and other social indicators. GPI is still a measure of preference maximization, but one that factors in more of what we know about economic growth.

Poverty. Poverty is a barrier to happiness because people theoretically need a basic amount of income in order to achieve happiness. Measures of poverty like the official poverty measure, the supplemental poverty measure, relative poverty measures, as well as concepts of deep and extreme poverty help us understand the problem of poverty in the US rigorously.

Inequality. In John Rawls’ 1972 landmark A Theory of Justice, the political philosopher lays out the reasoning that a society that is blind to individual circumstance (and thus treats every individual with dignity) is one that maximizes individual liberties and has a strong preference for equality. Measures like the Gini coefficient and percentages of income and wealth distributed to different quintiles of society give us a rigorous understanding of inequality in the country. In this framework, society supports happiness by giving each individual equal ability to succeed.

Capabilities. Amartya Sen and Martha Nussbaum’s “capabilities approach” takes this logic one step further. By adopting a more broad conception of happiness as “flourishing” in Aristotle’s sense of the word, the capabilities approach says that people need at the basic level access to the “capabilities” such as income, education, and health. These then give individuals the basis they need to achieve happiness.

The capabilities approach has spawned measures such as the Human Development Index and an argument could be made that this framework is the closest to the Bhutanese Gross National Happiness measure.

Self-assessed well-being. Some happiness economists have started to measure happiness by simply asking people how they feel about their lives. They do this by, for instance, asking people to assess how well their lives are going on a scale from one to ten. The Happiness Alliance offers one such self-assessment. A briefer one (take the survey here) has been used during our Happiness Walk and Happiness Dinners to elicit responses in more informal settings.

These sorts of surveys, if made more prevalent, could help policymakers and the public learn more about what sorts of people are living lives they themselves consider to be meaningful. We can then use these measures to get an idea of the impact of public policy changes on self-assessed well-being.

I am honored to have the opportunity to join the board of Gross National Happiness USA and join the effort of promoting these measures of happiness. Next month, I will publish a paper on Ohio’s genuine progress indicator from 2009 to 2016. I plan to use this paper as a starting point for a broader conversation about the measurement of economic growth and happiness in Ohio and in the states in general. If you would like to talk to me about this project, feel free to email me at rob@gnhusa.org.

We have a lot of work to do, but with better measurement comes better ability for us to improve lives in the United States.

This article originally appeared in Gross National Happiness USA’s Serious About Happiness Blog.

Columbus Alive: Boosting Local Wages

By Rob Moore

We’ve been talking a lot about tax incentives in Columbus recently. City Council and Yes We Can Columbus have bandied arguments back and forth about the effectiveness of economic development incentives and how they help reduce or exacerbate the problem of inequality in the city.

At the same time, I have written about them a bit in this column, citing Upjohn Institute Economist Timothy Bartik’s work showing that a well-designed tax incentive can be a cost-effective way of increasing local wages.

Increasing local wages is an admirable goal for local economic development policy. Local wages also have the benefit of being measurable, meaning we can actually make estimates as to whether policy works or not.

Bartik’s research suggests that a well-designed tax incentive is progressive, earning about $6 in benefits for every $1 in costs for poor residents compared to about $2 in benefits for every $1 in cost for wealthy residents. It should be noted, however, that tax incentive progressivity pales in comparison to Bartik’s projections for a universal pre-K program, which would return $23 for every dollar invested for poor residents and less than a dollar for every dollar invested for wealthy residents.

By this measure, a universal pre-K program turns out to be more than eight times more progressive than a well-designed tax incentive program.

Early childhood and tax incentive programs are not the only human development programs that yield wage benefits for local residents. Bartik’s research has found that a range of different policy approaches can push up local wages.

For instance, higher test scores can lead to much higher local wages, at the value of thousands of dollars per student impacted for just small increases in test scores.

Degree attainment also can have a huge impact on local wages. Converting one high school dropout to a high school graduate is worth a more than $175,000 impact to local wages. Converting a high school grad to an associate’s degree is worth $125,000 in local wages. And converting a high school grad to a bachelor’s degree is worth a whopping $375,000 in local wages.

Health interventions are valuable, too. Preventing a case of ADHD is worth $30,000 in local wages. Preventing severe mental illness or drug addiction is worth $90,000 in local wages. And having a baby born at normal weight rather than underweight is worth more than $130,000 in local wages.

Crime interventions help, too, albeit to a lesser extent. Reducing someone’s possibility of committing a crime and being imprisoned by 10 percent is worth more than $1,000 in local wages.

These interventions only measure the benefits side of the equation and don’t include costs. Low-cost interventions could make some of these low-benefit outcomes incredibly cost-effective for the city, county or school districts. And some of the high-benefit outcomes could be weighed down by the absence of low-cost interventions.

Columbus City Council’s Legislative Research Office should investigate policy interventions that could give the city the most “bang for its buck” in local wages. Bartik’s research gives them a good starting point.

This article originally appeared in Columbus Alive.