With real estate values in the tank, retail sales plummeting, new construction halted and lay-offs mounting, the budgets of our local governments in the Memphis region are under severe pressure.
It’s clear that there won’t be money for anything that is not absolutely essential this year. (And even spending on essentials will be questionable.) The federal stimulus package could help in some key areas, but extra money is unlikely to be available to plug the operating budget.
Is there anything we can do to save ourselves? Surprisingly, there is.
There are three actions that collectively we can take that have the potential to pump significantly more money into the local economy. CEOs for Cities, a national network of urban leaders, has calculated that by making small improvements in performance in three key areas, cities can realize big annual financial gains.
According to the latest data, we have 189,645 college graduates over the age of 25 in the Memphis metro area, or 23.7 percent of 800,189 (the total number of 25-year-old and over population). If we could increase that number by just one percentage point to 24.7 percent, or 8,002 additional graduates, it would mean an additional $1 billion annually to our economy.
Call it the Memphis Talent Dividend.
The people in this metro area currently drive an average of 26.6 miles per day. If we could reduce that by just one mile — from 26.6 to 25.6 — it would mean another $232 million that circulates in our local economy rather than leaving our region to pay for foreign oil and cars built in other cities.
That is the Memphis Green Dividend.
The Memphis metropolitan statistical area has more than its fair share of poverty. Today, the portion of our population living below the poverty line is 17.8 percent. Once again, if we can reduce that number by just one percentage point to 16.8 percent, we realize a cost savings of $109 million.
That is the Memphis Opportunity Dividend. And that only counts the savings on family assistance, Medicaid and food stamps.
Add it up.
If we could make these relatively modest adjustments in performance, it is worth an additional $1.3 billion every single year. That is twice the total general operating budget for the city of Memphis for 2009. Plus, it is money that can be spent right here at home.
And as performance improves, that dividend grows.
These gains are not only significant to Memphis. They are also significant to the nation. If each of the top 51 metro areas could make the same gains — a one percentage point increase in college attainment, one less vehicle mile traveled per day per person, and a one percentage point decrease in poverty — the nation would realize a $166 billion annual dividend, thanks to its cities.
By making these very small changes in performance, the Memphis MSA and the nation can pump “found” money — money we very much need right now — into local economies.
The good news is there are already a number of local initiatives that address these very issues.
Sustainable Shelby is working to execute a comprehensive list of recommendations that will contribute to a reduction in vehicle miles traveled, helping the region to realize its Green Dividend.
There is also an obvious opportunity to capture the Talent Dividend: 22.7 percent of Shelby Countians age 25 and older enter college but don’t graduate. If we can graduate simply those who began college but didn’t finish, we could nearly double the college attainment rate of the region. One percent, then, seems well within reach.
Given the billion-dollar gains that are just within reach for the region, capturing Memphis’ City Dividends seems like an effort definitely worth making.
This was published in The Commercial Appeal as an op-ed column by Carol Coletta, president and CEO of CEOs for Cities, a national network of urban leaders dedicated to building and sustaining the next generation of great American cities. She is also host and producer of Smart City, a nationally syndicated public radio talk show.
