The Policy Iceberg and Policy Analysis

When you think of public policy issues, what comes to mind for you? Is it abortion policy? Gun control? Job creation? Climate change? Health care access?

There are certain topics that capture the public imagination and get headlines. These topics are important. They impact a broad swath of people in deep ways. But what about topics that impact broad swaths of people, but small amounts?

When trying to figure out where policymakers get their information from, it’s important to gauge the “political salience” of the issue, that is, how much people are paying attention to it. For every bill that gets a headline, a legislator votes on a dozen that don’t make the news, “below the waterline” of the policy iceberg. What relevance does this phenomenon have to those of us who want policymakers to get access to the best information possible?

Ultimately, policy topics that fall “above the policy waterline” are topics that policymakers have their minds made up on. They often ran on these issues and have either sincere ideological commitments to them or promises to key constituencies that they don’t want to break. Policymakers are unlikely to be seeking out new information on abortion while in office.

At the same time, policymakers have to vote on gobs of issues that they have no knowledge of whatsoever. Most policymakers have voted on an electric bill, but they haven’t considered what competitive energy generation looks like. Many have occupational licenses, but they don’t have much information on the anticompetitive impacts of licensing.

It is in these policy areas, "below the policy waterline,” that policymakers are in need of information. And this information comes from a few different places.

First, personal experience. Take the example of agricultural subsidies: a farmer elected to office will bring a different perspective to the value of agricultural subsidies than a business owner in an urban district. These perspectives are valuable, but often incomplete: a farmer who has benefited from agricultural subsidies might overvalue these subsidies’ impact on society while the urban businessman may undervalue them.

That is why policymakers also get information from constituents. Much of the work in offices of elected officials is focused on managing flows of information from constituents. Despite cynicism on the part of the public, a string of letters from constituents or contacts from key constituents at the state level do have the power to sway policymakers, especially at the state level, and especially on issues below the policy waterline.

Constituents have a rival source of information, though: paid lobbyists. Lobbyists represent certain interests and have specialized knowledge that policymakers and their constituents often do not have. Lobbyists are valuable to policymakers because of this knowledge and are especially influential when policymakers need information and constituents are mum on an issue.

So where does objective policy analysis figure into this picture? Policy analysts who work for the state are usually funded less than private lobbying firms and are asked to cover broader topics. But objective policy analysis has its best chance to be of use to policymakers on topics below the policy waterline. This is why cost-benefit analysis thrives at the federal regulatory level: regulatory decisions are usually below the policy waterline and require specialized information on complex topics.

Ultimately, objective policy analysis supported by the state is the best counterweight against the influence of anecdote and special interests on the policymaking process. Policymakers need information on topics they have to make decisions on below the policy waterline, and thus they need a robust infrastructure of objective policy analysts in order to get this information.

Franklin County can’t fix air quality problems alone

Last week, the American Lung Association released its annual “State of the Air” report. In this year’s report, Franklin County received an “F” for high ozone days.

The local data isn’t all doom and gloom. Franklin County’s average number of high ozone days per year from 2015 to 2017 was 5.3, still above a passing rate of 3.2, but significantly lower than peak numbers of almost 46 annual high ozone days in the early 2000s.

Janice Nolen, an assistant VP with the American Lung Association, said that Ohio’s drop in high ozone days over the past two decades has been due to reductions in emissions from coal-fired power plants.

But why is Ohio still having so many high-ozone days?

A continuing culprit for local emissions is automobile use. Every mile driven by automobiles exacts costs on the public in the form of respiratory problems, asthma and heart attacks. A widely cited 2006 study published in the Journal of Economic Literature estimates the per-mile cost of local emissions at 2.3 cents per mile. This comes out to about 2.9 cents per mile in 2019 dollars.

This means the average driver in Ohio unloads about 84 cents of costs in health impacts (not including those caused by crashes, which are even more significant) per commuting day on other community residents.

Unfortunately, emissions costs are hard for local governments to capture. Cities and counties in Central Ohio rarely have the authority to directly price driving or cars through local gas taxes or vehicle registration fees. These localized fees could be avoided easily, as well, if only levied at the local level.

One tool some local governments have explored for capturing the costs of driving, namely congestion, is road pricing in key corridors, such as tolls. While Columbus has seen increases in congestion, the city is not at the point where such a strategy is likely to gain political momentum.

So what tools do local governments have? According to a survey last year of members of the National Association of Clear Air Agencies, most local governments are engaged in outreach, regional cooperation and pollution prevention programs broadly to manage air quality. Less common are strategies to adopt new transportation or energy technologies or to plan growth with sustainability goals in mind.

Another finding from the survey is that local air control authorities see state agencies as key partners in improving air quality. Working with state partners allows local governments to widen their reach, which is especially important when regulating activity that crosses municipal and county lines.

Ultimately, local governments will need to partner with state government in order to curb emissions. There are marginal gains to be had in outreach and local pollution prevention programs, but for any large-scale changes, local government needs the state. If the state is willing to work on local emissions, it should find willing partners at the local level.

This column originally appeared in Columbus Alive.

Moore Speaks at Economic Democracy Conference

Earlier this month, Scioto Analysis Principal and Gross National Happiness USA Board Member Rob Moore spoke at the Our Economy: Economic Democracy and System Change conference at the City University of New York’s School of Labor and Urban Studies.

Moore spoke on a study he conducted for Gross National Happiness USA last fall on Ohio’s recovery from the Great Recession. This study used the Genuine Progress Indicator (GPI), an alternative economic indicator, to analyze Ohio’s economic growth.

“Gross domestic product excludes key economic activities, double-counts inputs, and excludes externalities from social accounting,” Moore said. “The Genuine Progress Indicator corrects for some of these issues.”

Overall, the study suggested that growth in inequality had slowed Ohio’s economic growth.

“If inequality had held constant at 2009 levels, GPI growth would have tracked GDP until 2014 and then outpaced GDP growth in 2015 and 2016,” Moore said. “Instead, GPI growth lagged behind GDP growth in most of the years over the study period and GPI even shrank in 2016.”

See the full presentation below.

Scioto Analysis Releases Report on Ohio's Use of Cost-Benefit Analysis

(Columbus, OH) - A best practices cost-benefit analysis has not been conducted on a statewide issue in over a decade according to a study released by Scioto Analysis Monday.

“While we were able to identify 27 studies published from 2012 to 2018 that assessed direct costs and measured outcomes in some way, we were unable to find a single study that monetized direct and indirect costs and benefits measured against a baseline, discounted outcomes, performed sensitivity analysis, and disclosed key assumptions,” said Rob Moore, principal of Scioto Analysis and author of the study.

The study also analyzed Ohio’s state policy analysis infrastructure. The study found that Ohio has fewer R1 research institutions and think tanks per capita than all its neighboring states and less legislative staff per capita than each neighboring state besides Indiana.

“Ohio has the opportunity to bolster its analysis infrastructure by building cost-benefit analysis into institutions such as the Legislative Service Commission and Common Sense Initiative regulatory analysis protocol,” said Moore.

As a first step, Scioto Analysis will be conducting some cost-benefit analyses on state issues later this year.

Early Childhood Education Is a Win-Win

Columbus City Council recently passed an ordinance to authorize the city to spend $1 million on high-quality pre-kindergarten education programs. This represents the newest city investment in quality pre-K in Columbus, an initiative that both Mayor Andrew Ginther and City Council members have championed.

I first started studying early childhood policy last year while working as an analyst for Policy Matters Ohio. Like any good analyst, when tackling the brand new topic I found the best book on the economics of child care I could find — The Child Care Problem: An Economic Analysis — and went to work. Little did I know at the time that author Dr. David Blau is now a professor at Ohio State University.

Blau’s thesis in The Child Care Problem, still as relevant today as when he first wrote it nearly two decades ago, is that good child care is undersupplied in current markets. High-quality child care provides benefits in the form of future earnings, crime reduction and reductions in social spending that are not captured by child care markets without public involvement. Thus, the public sector has reason to subsidize high-quality care and encourage parents to place their children in it.

Child care and pre-kindergarten are two sides of the same coin: They’re both instances of parents putting children in care settings that will impact their life trajectories. High-quality child care settings can pay substantial economic development dividends down the road, while low-quality child care can hinder children’s future earning potential.

In addition to being an economic development tool, child care policy is a tool of poverty alleviation. A year of child care in Ohio can cost more than $10,000, making a child care slot for a low-income family one of the largest single transfers a state or local government provides to poor families. In the long run, economist Timothy Bartik has estimated that high-quality early childhood programs can result in upwards of $25 in increased earnings for low-income families for every $1 of public spending.

Early childhood has become a big part of local, national and state policy conversations, with Mayor Bill de Blasio of New York winning election promising pre-K for the city’s children. States like Florida, Georgia, Oklahoma and West Virginia have implemented universal pre-K programs. And presidential candidate Elizabeth Warren recently proposed national child care reform.

But while these splashy reforms catch headlines, much of the early childhood policy change in the United States is through smaller investments like those passed by Columbus City Council.

High-quality child care is a special program that promotes economic growth while also reducing inequality. This has made it an issue conservative Governor Mike DeWine and progressive Councilmember Elizabeth Brown can agree on. Hopefully this $1 million investment is a sign of future investment to come.

This column originally appeared in Columbus Alive.

Medical Marijuana Comes to Franklin County

Last week, Columbus welcomed medical marijuana to the city. People in Central Ohio dealing with chronic pain, chemotherapy side effects, multiple sclerosis and other ailments can now visit the Terrasana Cannabis Company on Grandview Avenue to have their prescriptions filled.

With medical marijuana now a reality in Central Ohio, local counties, municipalities and school districts will have to respond to the reality of the increased prevalence and acceptance of a previously banned substance. This will lead to adjustments for local government agencies throughout Franklin County.

For instance, according to the Bureau of Labor Statistics, one out of every six people employed in Columbus has a job in government. These governments will have to decide how to treat medicinal marijuana use off the clock, along with the increased chance of employees being high at work. Will some city departments relax standards around drug testing? What will they do for workers who want treatment but who they legitimately don’t want to be intoxicated at work? These are tough questions that government managers will have to answer.

According to the National Academy of Sciences, marijuana is associated with negative health outcomes. For instance, cannabis use is substantially associated with increased risk of motor vehicle accidents. This means local police and sheriff’s departments will likely have to adjust to more cases of driving under the influence on Columbus roads. This could mean new kinds of checkpoints and other enforcement initiatives to prevent mixing marijuana use and driving.

Marijuana use is also substantially associated with lower infant birth weights. This means that Columbus initiatives like CelebrateOne may need to play a part in educating at-risk families of the impacts cannabis use can have on prenatal development and infant health. This would mean public education programs or partnerships with home-visiting programs to bring this information straight to families.

The Alcohol, Drug and Mental Health Board of Franklin County (ADAMH) may have a role in educating the public on the relationship between marijuana use and development of schizophrenia and other psychoses. It also has a part to play in helping prevent problem cannabis use, to which young people, men and smokers are especially susceptible. ADAMH also might need to provide public education on how problem cannabis use develops and how to prevent it.

Lastly, Columbus and other school districts will certainly have to deal with potential for higher rates of marijuana use among both students and employees.

Medical marijuana has the promise to be a new way to help people dealing with serious medical problems. It could even be a substitute for opioid treatment for those dealing with chronic pain. At the same time, it will take adjustments from local policymakers and politicians who want to help people realize these benefits while also acknowledging the issues that come with increased marijuana prevalence.

This column originally appeared in Columbus Alive.

Analyzing Equity

When I was in graduate school, we had two semesters of econometrics, which can be understood as “effectiveness analysis.” We also had two semesters of microeconomics, which can be termed “efficiency analysis.” As for equity? Well, the third pillar of policy analysis often gets shorted in these discussions, treated differently for each policy question it is applied to, receiving a day here or a day there in different classes and providing little standardized guidance for the analyst.

Equity analysis poses some difficult questions for the analyst. What are the relevant social categories to analyze: income brackets? Racial? Gender? Geographic? How should costs and benefits to different groups be weighted? How can we approach problems in ways that ensure objectivity of the analyst while still giving relevant information to policymakers who have legitimate concerns about the distribution of social resources?

While in graduate school, I wrote a paper putting forth a framework for policy analysts interested in doing equity analysis better. This was based on the paucity of equity analysis guidance in standard policy analysis textbooks. Over the past few months, I have been digging into the cost-benefit analysis literature mainly with the goal of understanding efficiency analysis better, but have been pleasantly surprised at the attention the question of equity has received in the literature. Cost-benefit analysis, for all its focus on the goal of economic efficiency, actually has more tools for rigorous equity analysis than policy analysis textbooks do.

Last week I spoke to Dr. Zoe Plakias’s Benefit-Cost Analysis class at Ohio State’s Department of Agricultural, Environmental, and Development Economics on equity analysis in cost-benefit analysis sharing some of these takeaways. In short, I talked about how the analyst has the tools of description of projections, cost-effectiveness analysis, selective sensitivity analysis, and the controversial practice of distributional weighting at her disposal to analyze the equity impacts of a given policy alternative.

Overall, it’s important that policymakers have access to objective, rigorous analysis of the distributional impacts of their policy decisions. This Fall, Scioto Analysis will be beginning a project on the problem of poverty in Ohio to help get at how we can better understand that problem in this state. If you’re interested in talking about that or equity analysis in general, please feel free to get in touch. I am always excited to talk to other people who also believe we can understand equity better.

Rob Moore is the principal for Scioto Analysis. He can be reached at rob@sciotoanalysis.com.

Tax land, not improvements, to spur development

No one likes absentee landlords. A study on economic development of the Hilltop commissioned by the city earlier this year called these landowners a major challenge for the neighborhood. Anyone who has spent time in Columbus’ struggling neighborhoods knows the Hilltop is not the only part of the city dealing with this problem.

Absentee landlords cause problems for neighborhoods because neglected properties drag down property values around them. If one landowner doesn’t maintain their property, the values of all of the neighboring properties go down along with them.

In addition to the market incentives discouraging investment in economically disadvantaged neighborhoods, landowners are also discouraged from investing by property taxation. This is because improvements on their land lead to higher property taxes, leading to lower returns on investment.

The typical way governments combat these barriers to investment is through targeted tax abatements. By relieving developers of this cost on a case-by-case basis, local governments hope to increase investment in targeted neighborhoods.

This isn’t the only way to combat barriers to development, though. An alternative strategy has been in place in Pennsylvania since the mid-1970s: a land-value tax.

Land-value taxes are taxes that are assessed not on the value of the property with improvements, but on the value of the land the improvements are built on. Thus, taxes don’t go up as properties are improved unless those improvements lead to an increase in the value of the land it is built on.

This means landowners have extra incentive to develop their property. In the decades since Harrisburg, Pennsylvania, instituted its land-value tax, the number of vacant properties in the city decreased by 90 percent.

Land value taxes have other advantages over property taxes. For instance, because the supply of land is fixed, a tax on land can’t be passed to renters the same way property taxes are. This makes these taxes especially progressive.

In addition, land-value taxes rise with local public improvements. So if the city builds a new road or park nearby, the value of the land increases and the cost of those improvements can be recaptured by the public sector.

The land-value tax is no new idea. Chinese Philosopher Mencius proposed land taxation as early as 300 B.C. Thomas Paine and Adam Smith both extolled the virtues of land taxation in the late 18th century. Economist Henry George’s Progress and Poverty, which outsold all books in the last decade of the 19th century besides the Bible, was a treatise in support of a land-value tax.

If Columbus City Schools or other local government wanted to move to land-value taxation, though, it would likely require enabling legislation from the state. Republicans and Democrats both have reason to favor a more efficient and equitable system of taxation, but absentee landlords have reason to fight it. It’s a lot easier to sit on land than to make it better.

This column originally appeared in Columbus Alive.

The Car is Still King in Columbus

Have you ever been pulled over by police while walking? I have. Twice. This happened to me in the same neighborhood: Minerva Park. And both times in the past couple of months.

Minerva Park is a suburban enclave in northeast Columbus, nestled between Easton and Westerville. Because Minerva Park is its own municipality, the village has its own police force, separate from Columbus as a whole.

The Minerva Park Police Department has a policy of stopping people who walk in their jurisdiction after certain hours and questioning them for not being in a car. Police officers say that this is a policy in place to catch burglars, which would possibly be effective if burglars never used cars.

This is just one of the ways that Central Ohio stacks the deck against people trying to walk, bike and bus in the Columbus metro area. Nine in 10 commutes in Columbus happen via car. Columbus is so car-centric that neighborhoods like Minerva Park find walking to be probable cause for criminal activity.

Pedestrians are not the only people who have to deal with harassment for their choice of transportation. While biking in January, I was honked at by aggressive drivers not once but twice on one ride from campus to Downtown. One driver yelled, “Use the sidewalks!” (which would be, in fact, illegal) on a road that was marked as a shared bike/car road. Another laid down the horn on me as they tried to merge through a bike lane on Third Street onto 670.

Unfortunately, there are no easy public policy answers to this cultural bias against people who use their feet and/or bicycles to get around. Columbus has done a commendable job of making roads more bike friendly and life easier for pedestrians; the Third and Summit street bike lanes are pretty fantastic, and pedestrian right-of-way crosswalks have proliferated in the city in recent years. COTA has significantly improved the rider experience with ridership-based routes. Despite these improvements, Columbus is still a hard place to do anything but drive.

Finding ways to discourage driving is a piece of the solution. The new Short North parking changes are bound to encourage more biking, walking, busing and ridesharing in the area, which will hopefully help normalize use of alternative transportation. Congestion-reducing streetscaping and creative use of fees can also help.

But overall, the politics of transportation will not be settled in the halls of the City Council. People on bikes, buses, walking and driving will need to learn to respect each other and share space as the city becomes more dense and driving inevitably becomes less prevalent. Until then, please think twice before hitting the horn when you see a bicyclist on the road.

This column originally appeared in Columbus Alive.

Scioto Analysis Releases White Paper on Autonomous Vehicle Miles Traveled Fees

(Columbus, OH) - On Friday, Scioto Analysis released a paper on how states can incorporate vehicle miles traveled fees into the regulatory framework for autonomous vehicle adoption. Included in the paper are options for use of revenue generated with autonomous vehicle fees and an implementation timeline in the illustrative state of Ohio.

“Driving is associated with external costs such as congestion, crashes, emissions, and infrastructure degradation,” said Rob Moore, principal of Scioto Analysis and author of the paper, “the holy grail of automobile cost control is a vehicle miles traveled fee.”

While gasoline taxes have traditionally been used to control the costs of driving, increasing variability in fuel mileage and technological advances in data collection are tilting the scale in favor of vehicle mile traveled fees. The development of the regulatory framework around autonomous vehicles will provide policymakers with a particular opportunity to implement vehicle miles traveled fees.

“Automation gives opportunities for companies to cut costs, but that opportunity is contingent on state enabling legislation,” Moore said, “Fees can be assessed to capture the costs of driving and can be spent on credits for low-income families, worker retraining, or public investments.”

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