Today, in the Daily Journal of Commerce, Lincoln High School’s principal drops a hint at how the money might be used:

Peyton Chapman, Lincoln’s principal, said the URA could benefit the school’s long-term plan to build a new facility, 1,682 workforce housing units and a large parking garage. Chapman recognizes that a number of bonds would have to be passed for the plan that could cost $130 million; however, she said the URA is necessary to establish essential partnerships.

In other words, the city will pony up $10 million, but the school district will be on the hook for a whopping $120 million—for a school that does not need to be rebuilt.

A parking garage?
Who need’s a parking garage in a multi-modal Mecca served by TWO light rail stops?

Only soccer fans and members of the ultra-posh Multnomah Athletic Club (initiation fee $10,200):

Chapman said the structures proposed in the plan could be used by other schools and area businesses. For example, the proposed two-story parking structure could be used by PGE Park and the Multnomah Athletic Club.

Now you know why we use the quotation marks around education in the “Education” Urban Renewal Area.

Now it seems that in less than two weeks, about one-third of that money has been taken away from the Portland Public Schools earmark. The money appears to have been transferred to Portland State University and added to the porkbarrel better known as the city’s (somewhat silly) “Cluster Development Strategy.”

Where is the urban renewal at Lincoln High School?

This is one of the bigger mysteries of the “Education” Urban Renewal Area.  It’s no secret that PPS, Lincoln parents, and the construction industry are eager to rebuild Lincoln High School.

Even so, no one seems to know what the city plans to do with the $14.5 million $10 million earmarked for PPS.  In particular, no one wants to admit that the money would go toward rebuilding the city’s public ivy. Here’s a tweet I got from PPS government relations:

Edu URA doesn’t guarantee a rebuild of LHS, inclusion of site merely allows for leverage & flexibility, if needed.

Portland’s League of Women Voters believe the blank check aspect the PPS earmark runs afoul of state law:

According to the Plan, $10 million will be spent on Lincoln High School redevelopment. There is no explanation of what is envisioned for the redeveloped site. We understand there are proposals for reconfiguring the school facilities to allow for possible condominium and commercial development. As noted above, ORS 457 requires that the Plan include descriptions of the projects, timing, costs and source of moneys. Council should insist that Portland Public Schools provides that information for inclusion in the Plan before adoption.

What’s taken away with one hand is given with the other

Even more curious is that Portland’s mayor has announced that he is “looking under every rock” to come up with $5 million to hand over to Portland Public Schools to stave off massive teacher layoffs in the beleaguered school district at the same time he’s taken $4.5 million away from the districts urban renewal earmark.

For example, from Letters:

The 1,000 shillings note exchanged for roughly $0.13 when Gen. Muhammad Aideed employed a printing firm to reproduce the note in 1996. As the number of notes in circulation grew, the exchange value fell to just $0.03, which is the cost of producing an additional note. Since the exchange value equals the cost of production, forgers can no longer profit by increasing the supply. Today, the Somali shilling is a commodity money. Its supply is governed by the cost of ink and paper required to produce a note.

The biggest question of all remains: Why rebuild Lincoln High School?

While the district get’s $14.5 million from the urban renewal area, it will be on the hook for another $100 million (give or take) to rebuild a school that does not need to be rebuilt.

Take a look at the figure below. Sure, Lincoln is crowded.  It is one of the most crowded schools in district’s portfolio.  But, the condition of the Lincoln building is one of the best in the district’s portfolio.

Crowding is not a building problem, it’s a school assignment problem. Many Lincoln students actually live closer to Roosevelt High School.  A simple transfer will relieve the crowding and save about $100 million.

Notice that about 20 percent is used to buy off opposition from Portland Public Schools and Multnomah County.  More than one quarter of the budget is to buy the support of Nick Fish, the housing commissioner on the Portland city council.

Here’s another breakdown.  Notice that the Portland Development Commission skims a whopping 15 percent off the top of all the money raised.  That’s quite a commission for the Commission.

The Portland Development Commission meets Wednesday, April 11, 2012 from 3:00 PM – 5:00 PM to discuss the proposed urban renewal area.  It will be one of the very few times the public can provide comment.

The complete packet of information currently available is below:

Last June the Portland City Council unanimously approved the new benefit joining Multnomah County and San Francisco

April 2, 2012 – None of Portland’s city employees or family members have used the city’s transgender benefits that were approved by the city council. But that isn’t unusual, said Yvonne Deckard, director of human resources, and doesn’t mean providing those benefits are without value.

“We didn’t anticipate that there would be a large volume of claims, necessarily,” she said. “Part of it is just the uniqueness and the small population group that will access that benefit.”

Portland’s City Council unanimously agreed to include transgender healthcare to its health plans in June 2011. Sexual reassignment surgery was among the benefits added. Prior to the vote, the city already covered prescription medications, office visits, and mental health counseling and treatment.

The city’s labor management committee, which makes recommendations to the human resources bureau on health benefits and other issues, had considered including transgender benefits for two years to its health plans, the city’s self-insured CityCore plan and a Kaiser Permanente plan. But the committee had voted against adding those benefits.

“They wanted more research, and they wanted to know about the cost,” Deckard said.

The city of Portland projected an additional cost of $32,302 by adding trans-inclusive coverage – which represented a .08 percent increase to its $41,615,000 projected fiscal budget for 2011-2012.

Deckard said there was widespread agreement among city officials that transgender benefits would be cost effective because a small number of people would likely use such coverage.

Because few employers and insurance companies offer transgender benefits, the city is a more competitive employer, she said, and reflects the city’s emphasis on preventive healthcare.

There was also a moral component to the council’s decision. “Having it available when we get those [claim] requests is what we believe was the right thing to do,” she said. “For who will access this benefit, there’s a real need [for it]. Our goal was to make it available.”

In the future, Deckard expects employees and their dependents to utilize such benefits. Making the decision to have sexual reassignment surgery takes time. “That’s a very hard…decision for someone to make,” she added.

Portland is one of three jurisdictions in the country to add transgender benefits, along with Multnomah County and San Francisco.

It’s difficult to determine the number of transgender individuals in the work force, but the Transgender at Work Project reported that 1,170 sex reassignment surgeries were performed in the U.S. in 2001, while approximately one in 2,000 residents had been diagnosed with gender identity disorder.

Group health plans rarely offer coverage for sexual reassignment surgery, leaving it up to employers to offer coverage.

In 2008, the American Medical Association published a resolution saying physical transitioning is medically necessary for some people and should be covered by insurance. However, most private insurance companies do not cover sexual reassignment surgery. Federal Medicare policies prohibit states from passing exclusion clauses regarding treatment, and Medicaid plans vary from state to state.

The most striking part of the settlement is that the fishermen dropped a $520 million claim for damages in exchange for a series of measures designed to assure competitiveness and transparency.

The big question left for the court: How much will the plaintiffs’ attorneys get?

On the one hand, it’s easy to laugh at those who get overly excited about one-tenth of one percentage point.  On the other hand, as Robert Barro points out, “increases in growth rates by a few tenths of a percentage point matter a lot in the long run and are surely worth the trouble.”

The key qualifier is “in the long run.”

Over the long run, Oregon’s personal income growth per person has lagged the rest of the US by two to four tenths of a percentage point.  It’s not enough to notice from year-to-year, but the impacts compound over time.

At the end of World War II, Oregon’s per capita personal income was 8.5 percent higher than the US as a whole.

In the 1950s, Oregon’s personal income growth could not keep pace with the rest of the US and by 1960, the state’s per capital personal income was the same as the US as a whole.  The recession of the early 1980s hit Oregon particularly hard, and income growth never seemed to recover.  Even during the dot-com boom, Oregon’s personal income did not keep pace with the rest of the US.

Last year—even with the one-tenth of one percentage point advantage—Oregon’s personal income per person was 9.0 percent lower than the US as a whole.

Even the tiniest drags on the economy can compound over time such that a state that begins almost nine percent richer than the rest of the country can end up decades later being nine percent poorer than the rest of the country.

Per Capita Personal Income Growth, Oregon vs. US

(Average Annual Growth Rate)

Males with no more than a high school degree represent about 25 percent of workers aged 20 to 29. At the same time, female workers with the same level of education comprise only 15 percent of workers aged 20 to 29.

Even so, it is the male workers in this age range who are responsible for most of the increase in the unemployment rates of younger workers.  Much of the increase in unemployment seems to come from the decline in construction employment opportunities.

The complete study is available from the Federal Reserve Bank of Cleveland.

In his last State of the City address in March, Portland Mayor Sam Adams announced a deal between the city of Portland and Multnomah County to create what he call the “Education District” urban renewal area. The proposed area would snake from Lincoln High School, across I-405, down the South Park Blocks, and end at the edge of the urban renewal area known to many as South Waterfront.

We can debate endlessly whether Oregon’s largest university is sitting in a sea of blight. And we can speculate wildly about how a public high school that auctions student parking passes for upwards of a $1,000 can now count a Superfund site among its peers in the world of blight.

But, what is really curious is that, as shown in the map above, more than half of the proposed new urban renewal area overlaps an existing urban renewal area. The South Park Block urban renewal area was formed in 1985. While its bonding authority expired in 2008, the Portland Development Commission points out, “South Park Blocks URA won’t officially close until all bonds have been paid off,” or sometime in the 2020s.

Since more that half of the proposed urban renewal area would sit on top of another urban renewal area that “won’t officially close” for another decade or two, let’s take a look at what the city’s been doing for the past 20 years there.

• Half of the projects that the Portland Development Commission identifies as being funded by the South Park Blocks urban renewal area have occurred within the area the mayor hopes will form the “Education District” urban renewal area.  This includes more than 1,400 housing units, a flagship Safeway store, a Gold LEED certified recreation facility for Portland State University students and staff, and a carpool lot serving PSU.
• On top of that the proposed area would contain approximately one mile of street car track and about 3/4 mile of light rail tracks. Both of these rail projects are identified as being funded in part by the South Park Blocks urban renewal area. TriMet and the city often tout rail projects as an economic development tool.  Yet, it seems that with the addition of some the greatest rail density in the region, the South Park Block/Education District urban renewal area remains blighted.
• In 2008, the Portland Development Commission passed a resolution declaring that the South Park Blocks urban renewal area had been a success. Successful, but still blighted?

It seems odd that an urban renewal can spend so much money on so many things over 20 years, but remained blighted enough to justify another 20 plus years.