This story first appeared in Detroit Free Press.
The answer to Michigan's school-funding crisis is consolidation of school districts and the elimination of duplication, especially school administrators. While state funding is "per pupil," spending is "per adult."
Proposal A set limits on property taxes and created a statewide system for funding public schools. Prop A was intended to encourage school districts to eliminate waste and make them operate more efficiently. The statewide per-pupil funding system was intended to set a foundation of solid, reliable funding under every public school student in the state. Basically, poor districts got more and rich districts got less. So, some local districts avoided Prop A reductions by passing a "hold harmless" millage, which allows local taxpayers to pay additional funds to support operating costs of their local schools.
So, why are school districts in Michigan struggling financially? Because we have too many of them. We operate nearly 550 local school districts, many with fewer than 1,000 students, and many occupying fewer than 2 square miles.
Now, all those local school districts hold elections, hire superintendents, award contracts, buy supplies -- lots of duplication. Michigan's school districts should be encouraged to join hands with neighboring districts and to consolidate.
On Tuesday, Grosse Pointe schools will hold a special, single-issue election at a cost of tens of thousands of dollars. It wants to add $50 million in debt to an already staggering $48 million on the books.
That's a lot of red ink for a premium-funded district, and does not reflect any interest in thrift and efficiency.
Jenny Greenwell
Bloomfield Hills
Why would you vote no on trash privatization?
The three Detroit City Council members who voted against the privatization of trash service are not dealing with reality. It is the same old story that previous self-serving councils have embraced. Cities everywhere have private companies do the trash collections because it is better and less expensive. Get on board, people.
Paul Schmidt
Harper Woods
Greed by rich is hurting the rest of our country
Most of my conservative friends say that higher taxes lead to bigger government. When we have increased revenues, it is spent on services like education, infrastructure, research at our universities and dependable safety nets for the less fortunate. That is not making government bigger, per se.
Increased revenue should be obtained through a more fair, progressive tax system. In my mind, it is not fair to tax money obtained through capital gains and dividends at half the rate of money gained through labor. The "one percenters" like it that way because it seems they depend less on the services that taxation provides. With the vast amounts of money provided by the richest Americans for political campaigns and lobbying, it is clear that they are having more influence on what is best for them instead of what is best for the rest of society. We have gone from a representative democracy to a plutocracy.
Daniel Dankoff
Plymouth
No, GOP, immigration reform cannot wait
I am extremely disappointed in the Republicans leadership of the U.S. House for its decision not to move forward with immigration legislation until next year, when the GOP hopes to regain power in the Senate. This decision is not in the best interest of the voters and the American people, for whom they work.
Pushing aside the topic of immigration is telling millions of immigrants that they are not worth the time or discussion of our Congress. For instance, members of the House could be working to pass the bill that the Senate passed last June, but they are brushing off the pathway to citizenship for more than 11 million immigrants in our country until next year. It is only February. The fate, safety and stability of millions of families will have to wait, but according to the Republicans in the House, one more year can't hurt.
Ali Casemore
East Lansing
Teenager wrong to defend juvenile lifers
Though I applaud 16-year-old Matilyn Sarosi's academic prowess and her dedication to her cause, I find her logic on juvenile lifers to be faulty at best. Coming from a wealthy, cloistered private school that indoctrinates their students with "social justice," I am not surprised by her positions.
Her excuse for the youths convicted of taking another human life as "stupid decisions" leads to a slippery slope. What is next? Forgiving a senior citizen who injures or kills others with their car due to their advanced age and lack of response time? What about the "affluenza defense?" How can one jail a youth who was given no proper instruction or guidance?
Yes, everyone has a chance for redemption, but that redemption is in their relationship with the Lord, not society.
Thomas Sleete
Troy
Michigan's roads are an embarrassment
I chose to move back to Michigan even though I had options to move elsewhere. Horrible mistake! I had company from out of town, and they were horrified at the conditions of our roads, as was I when I moved back here. Don't use the excuse it's because of our weather. Other states have worse weather than we do. Shame on our officials. Perhaps you can give them a tax break to go back to school to learn how to run things better!
Diana Craig
Livonia
24 February 2014
MICHIGAN CHILD PROTECTION REGISTRY MOVED TO NEW OFFICE
This story first appeared in Detroit Free Press.
A Michigan program that families can use to block adult-oriented ads from kids' email, cellphones and instant messenger accounts is being moved to a different state agency.
Gov. Rick Snyder this week signed an executive order transferring the Child Protection Registry from the Department of Licensing and Regulatory Affairs to the secretary of state's office in 60 days.
Snyder says the Department of State has a broader reach and extensive experience interacting with parents and students through driver education functions.
Secretary of State Ruth Johnson says the registry has been active for more than nine years. Registered addresses and numbers are protected from messages that advertise pornography, tobacco, illegal drugs, alcohol and gambling.
More information is available at www.ProtectMiChild.com .
http://www.michigan.gov/dhs/0,4562,7-124-7119_50648-21208--,00.html
A Michigan program that families can use to block adult-oriented ads from kids' email, cellphones and instant messenger accounts is being moved to a different state agency.
Gov. Rick Snyder this week signed an executive order transferring the Child Protection Registry from the Department of Licensing and Regulatory Affairs to the secretary of state's office in 60 days.
Snyder says the Department of State has a broader reach and extensive experience interacting with parents and students through driver education functions.
Secretary of State Ruth Johnson says the registry has been active for more than nine years. Registered addresses and numbers are protected from messages that advertise pornography, tobacco, illegal drugs, alcohol and gambling.
More information is available at www.ProtectMiChild.com .
http://www.michigan.gov/dhs/0,4562,7-124-7119_50648-21208--,00.html
20 February 2014
DETROIT REACHES NEW DEAL TO SETTLE PENSION DEBT
This story first appeared in The Detroit News.
Detroit — The city reached a new settlement with two banks to end a troubled pension debt deal Friday and will try to seek approval from a bankruptcy judge who rejected two earlier settlements.
The proposed settlement, which will be filed in bankruptcy court in coming days, could free up more money to pay creditors and bankroll restructuring efforts amid the city’s landmark bankruptcy case.
The deal, revealed Wednesday during a hearing in bankruptcy court, comes more than one month after U.S. Bankruptcy Judge Steven Rhodes said he would not let Detroit continue to make bad financial decisions. He rejected a proposed $165 million settlement with two banks to terminate the pension debt deal.
During an unrelated bankruptcy hearing Wednesday, Detroit attorney Robert Hertzberg told Rhodes the city has “a new swaps agreement” that would be disclosed in its plan of adjustment.
Rhodes called an earlier deal too generous and urged negotiators, who had reached a Christmas Eve settlement between Detroit and banks UBS AG and Bank of America’s Merrill Lynch Capital Services, to resume negotiations.
The settlement is a bid to end a deal engineered during ex-Mayor Kwame Kilpatrick’s tenure and blamed for pushing the city into bankruptcy.
Several groups, including bond insurers, pension funds and banks, fought the $165 million settlement and attempts to terminate the Kilpatrick-era debt deal, calling it illegal and too generous.
The proposed settlement is the latest strategy the city’s legal team has deployed to end the troubled pension debt deal and free up $15 million in monthly casino tax revenue that the banks hold a lien over until they’re paid each month.
Rhodes twice rejected the city’s earlier settlements, winning praise from critics of a complex financial scheme designed to prop up the city’s pension funds.
“Thank goodness this bankruptcy judge was smart enough to put a stop to it,” said Michael Greenberger, an expert on derivatives at the University of Maryland’s law school.
If the city is successful in settling the swaps claim and getting Rhodes to invalidate the $1.44 billion pension debt deal, Greenberg said, “there will be more money for the pension beneficiaries.”
“If invalidating the IOUs essentially invalidates the swaps, that’s good for the people of Detroit,” Greenberger said of the underlining pension debt, known as certificates of participation. “That whole thing was a sham.”
Detroit — The city reached a new settlement with two banks to end a troubled pension debt deal Friday and will try to seek approval from a bankruptcy judge who rejected two earlier settlements.
The proposed settlement, which will be filed in bankruptcy court in coming days, could free up more money to pay creditors and bankroll restructuring efforts amid the city’s landmark bankruptcy case.
The deal, revealed Wednesday during a hearing in bankruptcy court, comes more than one month after U.S. Bankruptcy Judge Steven Rhodes said he would not let Detroit continue to make bad financial decisions. He rejected a proposed $165 million settlement with two banks to terminate the pension debt deal.
During an unrelated bankruptcy hearing Wednesday, Detroit attorney Robert Hertzberg told Rhodes the city has “a new swaps agreement” that would be disclosed in its plan of adjustment.
Rhodes called an earlier deal too generous and urged negotiators, who had reached a Christmas Eve settlement between Detroit and banks UBS AG and Bank of America’s Merrill Lynch Capital Services, to resume negotiations.
The settlement is a bid to end a deal engineered during ex-Mayor Kwame Kilpatrick’s tenure and blamed for pushing the city into bankruptcy.
Several groups, including bond insurers, pension funds and banks, fought the $165 million settlement and attempts to terminate the Kilpatrick-era debt deal, calling it illegal and too generous.
The proposed settlement is the latest strategy the city’s legal team has deployed to end the troubled pension debt deal and free up $15 million in monthly casino tax revenue that the banks hold a lien over until they’re paid each month.
Rhodes twice rejected the city’s earlier settlements, winning praise from critics of a complex financial scheme designed to prop up the city’s pension funds.
“Thank goodness this bankruptcy judge was smart enough to put a stop to it,” said Michael Greenberger, an expert on derivatives at the University of Maryland’s law school.
If the city is successful in settling the swaps claim and getting Rhodes to invalidate the $1.44 billion pension debt deal, Greenberg said, “there will be more money for the pension beneficiaries.”
“If invalidating the IOUs essentially invalidates the swaps, that’s good for the people of Detroit,” Greenberger said of the underlining pension debt, known as certificates of participation. “That whole thing was a sham.”
17 February 2014
SUBURBS FEAR WATER DEAL'S UNKNOWNS
This story first appeared in The Detroit News
Timely resolution of Detroit’s bankruptcy may hinge on whether Emergency Manager Kevyn Orr can convince the suburbs to buy what they suspect is a pig in a poke.
Orr’s plan of adjustment counts on Detroit selling its water and sewage department to a regional authority for $47 million a year for 40 years. The revenue will be used to bolster the city’s general fund.
He had hoped to get sign-off on a memorandum of understanding by the end of last week. It didn’t happen, and may not. Oakland and Macomb counties are skeptical that the system is worth the asking price. In fact, they fear that instead of generating revenue, the new authority will be a huge liability for their residents.
But they can’t be sure, says Bob Daddow, the deputy county executive negotiating for Oakland, because Detroit hasn’t coughed up the data needed to assess the viability of the deal.
“Not a single person I’ve talked to would enter into a transaction of this magnitude without having some key questions answered,” Daddow says.
He wants to see up-to-date financial statements, for starters. Beyond that, he wants to know the status of labor contracts, a truthful assessment of the cost of upgrading the system (estimates he’s received range from $2.5 to $5 billion — “an awfully big range” ), the extent of legacy costs, whether the department is in compliance with federal environmental rules, whether it can get its debt rated to sell bonds, and the list goes on.
Oakland County also wants to know who’s going to cover the cost of providing water to customers who don’t pay their bills. The water department writes off about $40 million a year in bad debt, mostly from customers in Detroit and other distressed communities. Currently, water users in those cities cover the cost. Under an authority, it will be spread across all bill payers.
Daddow wants the state to commit to pick up those costs, or find a charity to do so.
And although he says Oakland wants a regional authority to assure more competent operation of the system and better representation for the suburban users who make up 80 percent of the customers, he’s not optimistic an agreement will come soon.
In Macomb County, Executive Mark Hackel would rather the system be sold to a private investor than have his county take on any responsibility for its cost and operation.
“Everything about the system is bad,” he says. “It can’t be considered an asset.”
Asked about the likelihood of a regional authority forming, Hackel says, “I don’t see it happening.”
What both he and Daddow do see happening, either way, are big increases in water bills. No matter who runs the system, it will need billions of dollars in investment.
“Costs are going to go up because of all of the past neglect,” Hackel says. “Why do I want to be the one who raises rates?”
Clearly, Kevyn Orr has a selling job to do in convincing Oakland and Macomb to pay for a water system they’re not sure they’d take if Detroit were giving it away.
Timely resolution of Detroit’s bankruptcy may hinge on whether Emergency Manager Kevyn Orr can convince the suburbs to buy what they suspect is a pig in a poke.
Orr’s plan of adjustment counts on Detroit selling its water and sewage department to a regional authority for $47 million a year for 40 years. The revenue will be used to bolster the city’s general fund.
He had hoped to get sign-off on a memorandum of understanding by the end of last week. It didn’t happen, and may not. Oakland and Macomb counties are skeptical that the system is worth the asking price. In fact, they fear that instead of generating revenue, the new authority will be a huge liability for their residents.
But they can’t be sure, says Bob Daddow, the deputy county executive negotiating for Oakland, because Detroit hasn’t coughed up the data needed to assess the viability of the deal.
“Not a single person I’ve talked to would enter into a transaction of this magnitude without having some key questions answered,” Daddow says.
He wants to see up-to-date financial statements, for starters. Beyond that, he wants to know the status of labor contracts, a truthful assessment of the cost of upgrading the system (estimates he’s received range from $2.5 to $5 billion — “an awfully big range” ), the extent of legacy costs, whether the department is in compliance with federal environmental rules, whether it can get its debt rated to sell bonds, and the list goes on.
Oakland County also wants to know who’s going to cover the cost of providing water to customers who don’t pay their bills. The water department writes off about $40 million a year in bad debt, mostly from customers in Detroit and other distressed communities. Currently, water users in those cities cover the cost. Under an authority, it will be spread across all bill payers.
Daddow wants the state to commit to pick up those costs, or find a charity to do so.
And although he says Oakland wants a regional authority to assure more competent operation of the system and better representation for the suburban users who make up 80 percent of the customers, he’s not optimistic an agreement will come soon.
In Macomb County, Executive Mark Hackel would rather the system be sold to a private investor than have his county take on any responsibility for its cost and operation.
“Everything about the system is bad,” he says. “It can’t be considered an asset.”
Asked about the likelihood of a regional authority forming, Hackel says, “I don’t see it happening.”
What both he and Daddow do see happening, either way, are big increases in water bills. No matter who runs the system, it will need billions of dollars in investment.
“Costs are going to go up because of all of the past neglect,” Hackel says. “Why do I want to be the one who raises rates?”
Clearly, Kevyn Orr has a selling job to do in convincing Oakland and Macomb to pay for a water system they’re not sure they’d take if Detroit were giving it away.
10 February 2014
DETROIT RANKS HIGH ON LIST OF U.S. CITIES WHERE RESIDENTS ARE DRIVING LESS
This story first appeared in the Detroit Free Press
For many Americans, there's no escaping the stressful rush hour drive — but not for everybody. Many choose not to own a car. In fact, according to a recent report, more than 9% of U.S. households did not have a car in 2012, a higher figure than five years ago. In 21 of the nation's 30 largest cities, households were also less likely to have a vehicle than just five years earlier.
According to a study by Michael Sivak, a research professor at the University of Michigan Transportation Research Institute, the growth in households without a vehicle provides evidence that Americans are less dependent on cars than in the past. Sivak's research also indicates that, per capita, Americans own fewer vehicles, drive fewer miles, and consume less fuel. While the number of households without a car rose nationwide, from 8.7% in 2007 to 9.2% in 2012, figures by city differ dramatically. In San Jose, just 5.8% of households did not have a car. In New York, 56.5% of households did not have a car.
According to Sivak's report, "The proportion of households without a vehicle is likely influenced by a variety of factors," including public transportation quality, urban layout, weather, and fuel costs." Adie Tomer, associate fellow at the Brookings Institution, agreed that, per capita, Americans have been driving less, and that this is due to "a huge confluence of factors."
One of the major factors Sivak identified as potentially contributing to peaking motorization is an increase in the use of public transportation. In fact, in large cities where Americans were least likely to have a car, the percentage of workers who commuted via public transportation was especially high, according to 2012 figures published by the U.S. Census Bureau. Residents of New York, Boston, and Washington, where people are least likely to have a car, were all among the most likely Americans to take public transportation to work.
According to Tomer, public transportation often serves as a substitute for driving, especially if the transit system is good. A good public transit system makes a city's resources more accessible. Residents ask "Can I get to work in 30 minutes if I wanted to move to that part of town? How many grocery stores are within 10 minutes?" Tomer said.
Sivak also noted the role played by good public transportation in his report. "The five cities with the highest proportions of households without a vehicle were all among the top five cities in a recent ranking of the quality of public transportation," citing to a 2012 rank of public transit by Walk Score, a company that measures walkability in cities.
Tomer noted that, in addition to quality transit service, the layout of a city matters as well. Cities where businesses, residences, and people are more tightly-packed lead to congestion on roads, making it harder to get around by car. Based on figures from a Census report, five of the cities where households are least likely to have a car are also located in some of the nation's 10 most densely populated metro areas.
While a densely populated city can be congested, it can also make the city easier to walk around. According to Sivak's report, walkability are among the factors that can influence households to avoid buying a vehicle. Walk Score constructed one measure of walkability by considering distance to amenities as well as pedestrian friendliness. Most of the cities where households were least likely to have a vehicle also had among the top 10 walk scores in the nation.
Based on an analysis of "Has Motorization in the U.S. Peaked?" from the University of Michigan Transportation Research Institute, 24/7 Wall St. identified the major U.S. cities where the fewest households had a vehicle in 2012. The report relied on figures originally produced by the U.S. Census Bureau's American Community Survey. Also from the survey, we considered household vehicle figures for 2007, as well as commuting data from 2012. We also reviewed Census data on population, using July 2012 figures, as well as population-weighted density, based on a 2010 Census Special Report "Patterns of Metropolitan and Micropolitan Population Change: 2000 to 2010." We used qualitative scores on the quality of walking, public transportation, and biking in cities from Walk Score, and figures from the Brookings Institution on transit coverage by metro area for 2010. Brookings considers anyone living within 3/4ths of a mile from a transit stop to be "served."
These are the cities where no one wants to drive.
1. New York City
> Pct. of households without a vehicle: 56.5%
> Pct. commuting to work via public transportation: 55.9% (the most)
> Transit score: 81.2 (the best)
> Population: 8,336,697 (the largest)
Nearly 90% of New York metro area residents were served by public transportation, more than all but a handful of other places in the U.S. More than 56% of New York City households did not own a car, the most of any city in the nation. This figure was up from 2007, when 54% of New York households did not have a car. In all, New Yorkers were more likely than residents of any other city to take public transportation to work, and no city received higher scores for walkability or transit. The city continues to invest in public transportation, including extensions to the city's subway system, a new subway transit hub in downtown Manhattan, and improving accessibility for Long Island Rail Road commuters.
2. Washington, D.C.
> Pct. of households without a vehicle: 37.9%
> Pct. commuting to work via public transportation: 38.6% (4th most)
> Transit score: 70.4 (4th best)
> Population: 619,020 (24th largest)
Nearly 38% of households in Washington, D.C. did not have a car in 2012, one of the highest percentages in the U.S. Additionally, more than 60% of working residents chose not to drive to work, one of the highest rates in the nation. The city received some of the highest marks from Walk Score for walkability, public transit, and biking in the area. As of 2010, 82.5% of the Washington, D.C. metro area's population was served by a transit system. This figure may rise once the first section of the Washington Metro's Silver Line opens, scheduled for later this year.
3. Boston
> Pct. of households without a vehicle: 36.9%
> Pct. commuting to work via public transportation: 34.6% (5th most)
> Transit score: 74.8 (3rd best)
> Population: 628,335 (21st largest)
Boston commuters were more likely to walk to work than those in any other major city. More than 15% did so in 2012. The city's public transportation also offers excellent alternatives to driving, according to Walk Score, which rated Boston's transportation infrastructure third best in the country. The Massachusetts Bay Transportation Authority (MBTA), also known as the T, recently announced the completion of train arrival information systems at all 53 of its heavy rail stations in the city, one of the first cities in the country to do so.
4. Philadelphia
> Pct. of households without a vehicle: 32.6%
> Pct. commuting to work via public transportation: 26.0% (12th most)
> Transit score: 67.0 (5th best)
> Population: 1,538,567 (5th largest)
The Southeastern Pennsylvania Transportation Authority (SEPTA) maintains rail, trolley, and bus routes throughout the Philadelphia region, including more than 100 bus stations. There are four public transit systems in addition to SEPTA connecting residents to their destinations in the Philadelphia metro area. The city was among the top six urban areas for its walkability, overall transit quality, and bikeability.
5. San Francisco
> Pct. of households without a vehicle: 31.4%
> Pct. commuting to work via public transportation: 33.1% (6th most)
> Transit score: 80.5 (2nd best)
> Population: 814,233 (14th largest)
San Francisco's transit system was rated higher than all but one other city by Walk Score. The city also scored higher than nearly all other urban areas for its biking and for its walkability. City residents were taking advantage of these opportunities as of 2012, with over 55% choosing not to commuting to work by car, more than all but a handful of U.S. cities. San Francisco, which is well within commuting distance of Silicon Valley, also pioneered a controversial program permitting companies such as Google and Apple to use public bus stops for their private shuttles.
6. Baltimore, MD
> Pct. of households without a vehicle: 31.2%
> Pct. commuting to work via public transportation: 19.2% (23rd most)
> Transit score: 56.9 (10th best)
> Population: 620,216 (26th largest)
The percentage of Baltimore households without a car rose from 29.3% in 2007 to 31.2% in 2012. One reason may be the quality of walking routes and public transportation in the city; Baltimore received some of the top marks in the nation for both walking and public transportation. The Maryland Transit Administration operates a number of services, including commuter buses and trains, as well as a more-than 15 mile-long subway. In 2012, more than 19% of commuters took public transportation to work, one of the higher percentages in the nation. There are also plans to build a new light-rail system, called the Red Line.
7. Chicago, IL
> Pct. of households without a vehicle: 27.9%
> Pct. commuting to work via public transportation: 26.3% (11th most)
> Transit score: 65.3 (6th best)
> Population: 2,705,248 (3rd largest)
Overall, more than 40% of Chicago residents did not use their own vehicle to commute in 2012, more than in most U.S. cities. To get to work, more than one in four residents used public transportation, more than in all but a few cities. Many others chose to walk to work — city residents were more likely to walk than Americans nationwide. According to Mayor Rahm Emanuel, public transportation is essential to the economic development of the city. In a speech last year, the mayor cited numerous renovations and projects aimed at strengthening the public transportation infrastructure.
8. Detroit
> Pct. of households without a vehicle: 26.2%
> Pct. commuting to work via public transportation: 9.4% (69th most)
> Transit score: n/a
> Population: 706,201 (18th largest)
Just 21.2% of Detroit households did not have a vehicle in 2007. By 2012, that figure jumped to more than 26%. Residents’ especially low incomes may be one reason for the high percentage of households without a car; the city’s median household income was just $23,600, or well less than half the U.S. median of over $51,000. Detroit had, by far, the lowest walk score of any city where so few households had a car. According to a 2011 analysis by the Brookings Institution, just 59.7% of working-age residents in the Detroit metro area were served by transit systems, lower than more than half of the metro areas reviewed. One public transportation system, the Detroit People Mover, is little-used and extremely expensive to maintain.
9. Milwaukee , WI
> Pct. of households without a vehicle: 19.9%
> Pct. commuting to work via public transportation: 8.6% (75th highest)
> Transit score: 48.8 (18th best)
> Population: 598,916 (30th highest)
While nearly 20% of households in Milwaukee did not have a car as of 2012, many residents still depend on vehicles. That year, 10.8% of residents carpooled to work, higher than the 8.6% who got to work using public transportation. For Milwaukee residents who do elect to use public transportation, the Milwaukee County Transit System provides regular bus service. According to its website, more than 85% of county residents live within walking distance of a bus route. The system also provides a “freeway flyer” bus service that provides transportation from the city’s suburbs to downtown Milwaukee.
10. Seattle, WA
> Pct. of households without a vehicle: 16.6%
> Pct. commuting to work via public transportation: 19.7% (21st most)
> Transit score: 57.3 (9th best)
> Population: 621,897 (22nd largest)
While just one in 20 people nationwide used public transit to commute to work in 2012, nearly one in five in Seattle did so, more than in most cities. Last year, contractors began building a 1.7 mile tunnel in Seattle last year to replace the damaged SR 99 highway running through the city. The $1.44 billion project is intended to expand public space along the city’s waterfront. Seattle is also one of a few cities that uses streetcars, and was one of the nation’s top cities for public transit, according to Walk Score. One in five workers used public transportation to get to work in 2012, higher than most U.S. cities.
For many Americans, there's no escaping the stressful rush hour drive — but not for everybody. Many choose not to own a car. In fact, according to a recent report, more than 9% of U.S. households did not have a car in 2012, a higher figure than five years ago. In 21 of the nation's 30 largest cities, households were also less likely to have a vehicle than just five years earlier.
According to a study by Michael Sivak, a research professor at the University of Michigan Transportation Research Institute, the growth in households without a vehicle provides evidence that Americans are less dependent on cars than in the past. Sivak's research also indicates that, per capita, Americans own fewer vehicles, drive fewer miles, and consume less fuel. While the number of households without a car rose nationwide, from 8.7% in 2007 to 9.2% in 2012, figures by city differ dramatically. In San Jose, just 5.8% of households did not have a car. In New York, 56.5% of households did not have a car.
According to Sivak's report, "The proportion of households without a vehicle is likely influenced by a variety of factors," including public transportation quality, urban layout, weather, and fuel costs." Adie Tomer, associate fellow at the Brookings Institution, agreed that, per capita, Americans have been driving less, and that this is due to "a huge confluence of factors."
One of the major factors Sivak identified as potentially contributing to peaking motorization is an increase in the use of public transportation. In fact, in large cities where Americans were least likely to have a car, the percentage of workers who commuted via public transportation was especially high, according to 2012 figures published by the U.S. Census Bureau. Residents of New York, Boston, and Washington, where people are least likely to have a car, were all among the most likely Americans to take public transportation to work.
According to Tomer, public transportation often serves as a substitute for driving, especially if the transit system is good. A good public transit system makes a city's resources more accessible. Residents ask "Can I get to work in 30 minutes if I wanted to move to that part of town? How many grocery stores are within 10 minutes?" Tomer said.
Sivak also noted the role played by good public transportation in his report. "The five cities with the highest proportions of households without a vehicle were all among the top five cities in a recent ranking of the quality of public transportation," citing to a 2012 rank of public transit by Walk Score, a company that measures walkability in cities.
Tomer noted that, in addition to quality transit service, the layout of a city matters as well. Cities where businesses, residences, and people are more tightly-packed lead to congestion on roads, making it harder to get around by car. Based on figures from a Census report, five of the cities where households are least likely to have a car are also located in some of the nation's 10 most densely populated metro areas.
While a densely populated city can be congested, it can also make the city easier to walk around. According to Sivak's report, walkability are among the factors that can influence households to avoid buying a vehicle. Walk Score constructed one measure of walkability by considering distance to amenities as well as pedestrian friendliness. Most of the cities where households were least likely to have a vehicle also had among the top 10 walk scores in the nation.
Based on an analysis of "Has Motorization in the U.S. Peaked?" from the University of Michigan Transportation Research Institute, 24/7 Wall St. identified the major U.S. cities where the fewest households had a vehicle in 2012. The report relied on figures originally produced by the U.S. Census Bureau's American Community Survey. Also from the survey, we considered household vehicle figures for 2007, as well as commuting data from 2012. We also reviewed Census data on population, using July 2012 figures, as well as population-weighted density, based on a 2010 Census Special Report "Patterns of Metropolitan and Micropolitan Population Change: 2000 to 2010." We used qualitative scores on the quality of walking, public transportation, and biking in cities from Walk Score, and figures from the Brookings Institution on transit coverage by metro area for 2010. Brookings considers anyone living within 3/4ths of a mile from a transit stop to be "served."
These are the cities where no one wants to drive.
1. New York City
> Pct. of households without a vehicle: 56.5%
> Pct. commuting to work via public transportation: 55.9% (the most)
> Transit score: 81.2 (the best)
> Population: 8,336,697 (the largest)
Nearly 90% of New York metro area residents were served by public transportation, more than all but a handful of other places in the U.S. More than 56% of New York City households did not own a car, the most of any city in the nation. This figure was up from 2007, when 54% of New York households did not have a car. In all, New Yorkers were more likely than residents of any other city to take public transportation to work, and no city received higher scores for walkability or transit. The city continues to invest in public transportation, including extensions to the city's subway system, a new subway transit hub in downtown Manhattan, and improving accessibility for Long Island Rail Road commuters.
2. Washington, D.C.
> Pct. of households without a vehicle: 37.9%
> Pct. commuting to work via public transportation: 38.6% (4th most)
> Transit score: 70.4 (4th best)
> Population: 619,020 (24th largest)
Nearly 38% of households in Washington, D.C. did not have a car in 2012, one of the highest percentages in the U.S. Additionally, more than 60% of working residents chose not to drive to work, one of the highest rates in the nation. The city received some of the highest marks from Walk Score for walkability, public transit, and biking in the area. As of 2010, 82.5% of the Washington, D.C. metro area's population was served by a transit system. This figure may rise once the first section of the Washington Metro's Silver Line opens, scheduled for later this year.
3. Boston
> Pct. of households without a vehicle: 36.9%
> Pct. commuting to work via public transportation: 34.6% (5th most)
> Transit score: 74.8 (3rd best)
> Population: 628,335 (21st largest)
Boston commuters were more likely to walk to work than those in any other major city. More than 15% did so in 2012. The city's public transportation also offers excellent alternatives to driving, according to Walk Score, which rated Boston's transportation infrastructure third best in the country. The Massachusetts Bay Transportation Authority (MBTA), also known as the T, recently announced the completion of train arrival information systems at all 53 of its heavy rail stations in the city, one of the first cities in the country to do so.
4. Philadelphia
> Pct. of households without a vehicle: 32.6%
> Pct. commuting to work via public transportation: 26.0% (12th most)
> Transit score: 67.0 (5th best)
> Population: 1,538,567 (5th largest)
The Southeastern Pennsylvania Transportation Authority (SEPTA) maintains rail, trolley, and bus routes throughout the Philadelphia region, including more than 100 bus stations. There are four public transit systems in addition to SEPTA connecting residents to their destinations in the Philadelphia metro area. The city was among the top six urban areas for its walkability, overall transit quality, and bikeability.
5. San Francisco
> Pct. of households without a vehicle: 31.4%
> Pct. commuting to work via public transportation: 33.1% (6th most)
> Transit score: 80.5 (2nd best)
> Population: 814,233 (14th largest)
San Francisco's transit system was rated higher than all but one other city by Walk Score. The city also scored higher than nearly all other urban areas for its biking and for its walkability. City residents were taking advantage of these opportunities as of 2012, with over 55% choosing not to commuting to work by car, more than all but a handful of U.S. cities. San Francisco, which is well within commuting distance of Silicon Valley, also pioneered a controversial program permitting companies such as Google and Apple to use public bus stops for their private shuttles.
6. Baltimore, MD
> Pct. of households without a vehicle: 31.2%
> Pct. commuting to work via public transportation: 19.2% (23rd most)
> Transit score: 56.9 (10th best)
> Population: 620,216 (26th largest)
The percentage of Baltimore households without a car rose from 29.3% in 2007 to 31.2% in 2012. One reason may be the quality of walking routes and public transportation in the city; Baltimore received some of the top marks in the nation for both walking and public transportation. The Maryland Transit Administration operates a number of services, including commuter buses and trains, as well as a more-than 15 mile-long subway. In 2012, more than 19% of commuters took public transportation to work, one of the higher percentages in the nation. There are also plans to build a new light-rail system, called the Red Line.
7. Chicago, IL
> Pct. of households without a vehicle: 27.9%
> Pct. commuting to work via public transportation: 26.3% (11th most)
> Transit score: 65.3 (6th best)
> Population: 2,705,248 (3rd largest)
Overall, more than 40% of Chicago residents did not use their own vehicle to commute in 2012, more than in most U.S. cities. To get to work, more than one in four residents used public transportation, more than in all but a few cities. Many others chose to walk to work — city residents were more likely to walk than Americans nationwide. According to Mayor Rahm Emanuel, public transportation is essential to the economic development of the city. In a speech last year, the mayor cited numerous renovations and projects aimed at strengthening the public transportation infrastructure.
8. Detroit
> Pct. of households without a vehicle: 26.2%
> Pct. commuting to work via public transportation: 9.4% (69th most)
> Transit score: n/a
> Population: 706,201 (18th largest)
Just 21.2% of Detroit households did not have a vehicle in 2007. By 2012, that figure jumped to more than 26%. Residents’ especially low incomes may be one reason for the high percentage of households without a car; the city’s median household income was just $23,600, or well less than half the U.S. median of over $51,000. Detroit had, by far, the lowest walk score of any city where so few households had a car. According to a 2011 analysis by the Brookings Institution, just 59.7% of working-age residents in the Detroit metro area were served by transit systems, lower than more than half of the metro areas reviewed. One public transportation system, the Detroit People Mover, is little-used and extremely expensive to maintain.
9. Milwaukee , WI
> Pct. of households without a vehicle: 19.9%
> Pct. commuting to work via public transportation: 8.6% (75th highest)
> Transit score: 48.8 (18th best)
> Population: 598,916 (30th highest)
While nearly 20% of households in Milwaukee did not have a car as of 2012, many residents still depend on vehicles. That year, 10.8% of residents carpooled to work, higher than the 8.6% who got to work using public transportation. For Milwaukee residents who do elect to use public transportation, the Milwaukee County Transit System provides regular bus service. According to its website, more than 85% of county residents live within walking distance of a bus route. The system also provides a “freeway flyer” bus service that provides transportation from the city’s suburbs to downtown Milwaukee.
10. Seattle, WA
> Pct. of households without a vehicle: 16.6%
> Pct. commuting to work via public transportation: 19.7% (21st most)
> Transit score: 57.3 (9th best)
> Population: 621,897 (22nd largest)
While just one in 20 people nationwide used public transit to commute to work in 2012, nearly one in five in Seattle did so, more than in most cities. Last year, contractors began building a 1.7 mile tunnel in Seattle last year to replace the damaged SR 99 highway running through the city. The $1.44 billion project is intended to expand public space along the city’s waterfront. Seattle is also one of a few cities that uses streetcars, and was one of the nation’s top cities for public transit, according to Walk Score. One in five workers used public transportation to get to work in 2012, higher than most U.S. cities.
MAMAS, DON'T LET YOUR BABIES BE BORN AT AOL
This story first appeared in Bloomberg Businessweek.
The costly children were cited—along with more than $7 million in costs from the Affordable Care Act—as the reason AOL changed its 401(k) account match to an annual lump sum payment. Workers who aren’t on the payroll at year’s end will forfeit AOL’s 3 percent matching contribution to the accounts. IBM made a similar change in 2012. If you plan to quit, management thinking goes, forget about collecting our share of your retirement savings.
Many employees didn’t react well to either bit of news, according to news reports. First, there’s the financial blow to workers, who will lose 401(k) funds if they leave AOL, as well as miss the opportunity to have the company’s match bolster their financial returns over a full year. There’s also the shock that accompanies hearing your boss tag a colleague’s difficult pregnancy and her newborn child as the reason your retirement plan was cut.
Why did two babies with special medical needs cost AOL $2 million? Most large employers are self-insured for their workers’ health coverage, given the savings such plans can yield over traditional group insurance. Self-funding means that an employer pays for health care rather than buying an insurance policy for their workers. Such plans now cover 60 percent of private-sector workers with health insurance—an estimated 100 million Americans. Financially, self-funding is practically a no-brainer if you have 1,000 or more employees, given the dramatic surge in U.S. health-care costs. The “law of large numbers” takes over and big employers’ annual medical expenses can be projected with relative precision, says Jon Trevisan, a senior vice president at Willis North America, an insurance brokerage that consults with employers on health coverage.
It’s not clear what kind of health plan AOL has; but with 4,000 employees, the company is likely self-insured. The company declined to comment Friday on that subject or the CEO’s remarks. Armstrong declined an interview request, an AOL spokesman said.
Given the astronomic costs that a heart attack, premature birth, or cancer can inflict, some self-insured companies purchase what are called stop-loss products to limit their financial exposure. Those limits can kick in for an individual employee’s claims beyond a certain level, or for an entire employee group in aggregate. Once a company has a certain number of employees, however, stop-loss insurance products may not make financial sense given the general predictability of workers’ typical annual claims, Trevisan says. But whether their worker pool warrants stop-loss coverage is a matter of executives’ risk tolerance as much as actuarial and cost-benefit analyses. Some companies may be comfortable forgoing stop-loss coverage for 3,000 workers, while others with 10,000 or more may decide to buy it. “It depends on the risk tolerance that a company has,” Trevisan says. “At the end of the day, it’s about how comfortable the employer is in assuming risks.”
AOL, the parent of the Huffington Post news site, is a media and Internet company with a workforce that may be younger—and healthier—than most employers’. If so, its annual claims could be even more predictable than a more age-diverse employee pool. That could argue against buying pricey insurance products to limit catastrophic claims—but it could at times lead to a $1 million baby bill.
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