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Posts tagged ‘Sonny Perdue’

Mar 20

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Mapping the rise and fall of Georgia’s per capita income performance

In my last piece, I summarized some of my recent research into the per capita income (PCI) “cold case” I’ve been noodling over for the past year or so and promised several follow-ups. This is the first of those.

As a starting point, I thought it might be useful to spread some key data points across the last four decades of Georgia’s political time-scape. My objective here is to make it relatively easy to see how Georgia’s PCI picture has evolved from one gubernatorial administration to another. As I’ve noted before, Georgia posted remarkable gains in per capita income in its final two decades of Democratic governance and then surrendered all those gains in its first two decades under Republican governors. The tables and maps below are pegged to key political years and will, I hope, make the pattern easy to see and understand.

Now, does this mean I think the dramatic decline in Georgia’s PCI performance owes entirely to the state’s transition from Democratic governance to Republican rule? No, for a couple of reasons. One is that the onset of the decline coincided so perfectly with the beginning of the first GOP governor’s term that you have to think the forces driving it were already at work. The second is that the data can be a little murky, especially when you zoom out and take a multi-state view of the situation.

The graph below illustrates how Georgia (the fat red line) and its neighboring states measured up against the national average (the straight blue line at the 100% mark) for per capita income from 1982 through 2021 (the latest year for which data is available).

Each state’s PCI fortunes ebbed and flowed between 1982 and 2021, and Florida, Tennessee and Alabama all suffered declines in PCI performance that coincided roughly with the Georgia plunge that started in 2003. But Georgia’s decline was easily the longest and deepest of any of the states shown above. Our PCI lost nine points against the national average during the gubernatorial administration of Sonny Perdue, Georgia’s first Republican governor in 130 years.

For most of the 40-year period graphed above, Georgia trailed only Florida among the southeastern states in PCI performance, and until the turn of the century it was mostly gaining ground on both Florida and the national average. By the end of this study period, however, the state had lost ground not only on Florida, but had fallen behind Tennessee and North Carolina as well.

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This analysis is based on per capita income data produced by the U.S. Bureau of Economic Analysis and mid-year population estimates from the U.S. Census Bureau. For each year illustrated below, I ranked all 3,100-plus counties in the country (for which data was available) by PCI and then divided that list into national quartiles.

The maps show the Georgia counties in each of the four national PCI quartiles for each of the years analyzed. The counties shown in dark green are in the top national quartile for per capita income; those in light green are in the second national quartile; salmon-colored, third quartile; and dark red, bottom quartile.

Governor Joe Frank Harris: 1983-1990

A veteran member of the Georgia House of Representatives and chairman of its Appropriations Committee, Harris won a hotly contested gubernatorial race in 1982 and succeeded Governor George Busbee in the governor’s office. When he took office, Georgia’s per capita income was 85.4 percent of the national average the state ranked 38th among the 50 states. Ninety-one of the state’s 159 counties were in the bottom national quartile that year, and they were home to 21.8 percent of the state’s population.

Harris continued the international business prospecting Busbee had initiated, and his economic development chief, the late George Berry, put a bright spotlight on the importance of improving the state’s per capita income, proselytizing about it in speeches all over the state. Toward the end of Harris’s term, the General Assembly created a job tax credit program that essentially codified raising PCI — along with lowering unemployment and reducing poverty — as key economic development goals.

Governor Zell Miller: 1991-1998

Miller succeeded Harris as governor after serving four terms as lieutenant governor and inherited a much-improved PCI map from Harris. By the time Miller took office, the number of Georgia counties in the bottom national quartile was down to 61 and the share of the population had been cut nearly in half, to 11.8 percent. Miller also oversaw eight years of slow but steady PCI improvement.

Miller had the good fortune to preside over a red-hot Atlanta economy (fueled in no small part by the 1996 Olympics), but he also put in place a number of policies and programs that arguably contributed strategically to the state’s continued economic progress. These included the HOPE scholarship program and the creation of the Georgia Research Alliance.

In turn, the PCI map Miller handed off to his successor was also much improved.

Governor Roy E. Barnes, 1999-2002

By the time Barnes, a veteran state legislator, took office as governor in January 1999, Georgia’s per capita income stood at 94.9 percent of the national average and the state ranked 25th among the 50 states. Moreover, the number of counties stuck in the bottom national quartile was down to 50 and the percentage of the state’s population in that group was below 10 percent.

Barnes, who told me Harris had “educated” him on the importance of raising PCI as an economic development goal, had the misfortune of presiding over state government during a period defined by the 9/11 attack on the World Trade Center, which stalled the U.S. economy nationally. Georgia’s PCI performance basically plateaued during the Barnes years.

At the same time, Barnes took actions that arguably helped advance the state’s economic progress. One was the creation of the OneGeorgia Authority, whose enabling legislation was the first state law to acknowledge that rural Georgia was falling behind the state’s urban regions.

A second was to convince the General Assembly to strip the Confederate battle emblem from the Georgia state flag. That action contributed significantly to Barnes’s defeat in 2002 at the hands of Perdue.

Governor Sonny Perdue, 2003-2010.

Perdue took office in January 2003, becoming the first Republican to win the keys to the governor’s office in more than 130 years.

In 2006, Perdue’s economic development department landed what was then the largest economic development win in the state’s history — a $1.2 billion commitment by Hyundai-Kia Automotive Group to build a new Kia manufacturing plant in Troup County, Ga. The new plant would employ nearly 3,000 workers and spawn another 2,600 jobs at supplier facilities, according to a press release issued by the governor’s office.

While Perdue earned big political props for the Kia win (Kia broke ground on the new plant just weeks before Perdue’s reelection to a second term as governor), it also came as he was presiding over the early stages of a steady decline in the state’s PCI performance. At the end of his first term, Georgia’s per capita income had slipped from 94.6 percent of the national average in 2002 to 91.3 percent and the percentage of Georgians living in the bottom national quartile counties had jumped from 9.7 percent to 17.4 percent. The number of Georgia’s bottom national quartile counties had climbed from 53 to 79.

This deterioration continued throughout Perdue’s second term. By the time he finished his second term and turned the keys to the governor’s office over to Nathan Deal, the number of Georgia counties in the bottom national quartile was up to 104 and the percentage of Georgians living in them had more than tripled from the time Perdue first took office. Georgia’s PCI as a percentage of the national average was down to 85.6 percent and the state ranked 40th among the 50 states. Basically, Georgia was back where it had been when Joe Frank Harris took office 28 years earlier.

Governor Nathan Deal, 2011-2018.

Deal thus inherited the worst per capita income map in, at least, Georgia’s modern history. And while he, like Perdue, scored a major economic development win by luring Caterpillar to the Athens area, the deterioration in Georgia’s PCI performance continued through his first term as governor.

In 2014, the number of Georgia counties in the bottom national quartile rose to 111 and the number of Georgians living in those counties hit 3.4 million, or 34.2 percent of the state’s population. That year, there were more Georgians living in bottom-quartile counties than in any other quartile.

Georgia also had more of its residents in that bottom national quartile than any other state. Texas, with nearly triple Georgia’s population, had only 3.08 million people in that bottom quartile.

By now, though, at least some members of the public policy community were beginning to notice the decline in PCI performance.

The aforementioned George Berry wrote a column for Georgia Trend magazine exhorting Deal to focus on that metric:

“As Gov. Nathan Deal begins his administration, he would do well to consider the over-arching accomplishment that defines Georgia’s advancement over the last half century: the progress we have made toward economic parity with the rest of the nation. That progress can be best defined by comparing the per capita income of Georgians to that of citizens of other states.”

In 2012, Maria Saporta, easily Atlanta’s longest-serving business journalist, weighed in with a column in her online newsletter, SaportaReport, quoting both Berry and another veteran of Georgia’s economic development wars, Annie Hunt Burriss. Burriss, who had worked for Berry in the Harris administration and then gone on to play a number of other important roles in state government, was leaving Georgia for a senior education position in Virginia and spoke to a group of leaders about economic development in the state.

“The thing I fear most right now is that we have gotten fat, dumb and happy,” Burriss said. “What are we doing to innovate our economy? If you look at what our investment strategy is right now, I don’t know what it is.”

Berry sounded a similar note. “We need to get our mojo back,” he told Saporta. “Everything that comes to the governor’s desk, the question that must be asked is how does this move us to the per capita national income. People have (been) telling us this for the history of our state. We were on the right trajectory, and now we are not.”

Governor Brian Kemp, 2019-current

Whether Deal and his successor, Brian Kemp, heard those public pleas is unclear. But the state’s PCI overall performance did bottom out under Deal and then begin a slow crawl back up that has continued under Kemp.

By the end of 2021 — the latest year for which data is available — Georgia’s PCI stood at 87 percent of the national average and we ranked 38th among the 50 states, the same rank we held when Harris took office four decades ago.

There is an important difference between then and now, however, and here it’s important to point out that “overall” is the operative word a couple of paragraphs above. As the map at right shows, much of rural Georgia, especially south of the line that runs from Columbus-Muscogee County through Macon-Bibb County and over to Augusta-Richmond County, appears mired in the bottom national quartile for PCI performance.

Indeed, that includes virtually every county in east-central and southeast Georgia except for the coastal counties. Scan back through the prior maps and it’s easy to see how this unhappy picture has developed.

When Harris took office, the number of counties in the bottom national quartile stood at 91 and they were less concentrated in a single region. Perhaps more significant, the percentage of Georgians living in those bottom quartile counties stood at 21.8 percent in 1982. As of 2021, the number of counties stuck in the bottom national quartile stood at 104 and the share of Georgians living in these bottom quartile counties was just under 30 percent.

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A closing thought, for now. Key takeaways from this data include not just how disproportionately Georgians are represented in this bottom national quartile, but how quickly they fell into it. In just a few short years, Georgia went from being generally proportionally represented at the bottom of the national PCI heap to dominating it, in terms of both the number of counties represented and the share of its population.

I’ll leave it to others to judge whether these changes were driven by unseen economic forces, a shift in policy by newly-elected Republican governors, some combination of the two — or something else entirely.

The more urgent question, it seems to me, is what the state should do about it. I have found similar patterns in education, population health and other economic data, and the picture that emerges is one of huge swaths of the state devolving into a third world territory.

The challenge of slowing and reversing these trends is one that ought to command the attention of public policymakers in both parties and at all levels of government in Georgia.

Copyright Trouble in God’s Country 2023

Feb 13

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TIGC’s first bowl of 2023 alphabet soup: PCI, JTC, DOR & GOP

Lately I’ve been working on about a half-dozen pieces that have to do in one way or another with the “cold case” I began focusing on about a year ago. Today I’ll hit the highlights (or lowlights) of some of those pieces and tease the follow-ups to come.

First, the 2021 PCI numbers are out and Georgia is still at the bottom of the heap. It was a little over a year ago that I took a deep dive into 2020 per capita income data produced by the U.S. Bureau of Economic Analysis (BEA) and discovered that Georgia had more counties and more people in the bottom national quartile for PCI than any other state. The 2021 data is no better. One-hundred-and-five of the 778 counties in the bottom national quartile are Georgia counties, and those counties are home to 3.2 million people — right at 30 percent of the state’s population. Only Texas, with nearly triple Georgia’s population, has more residents — 3.4 million — in that bottom quartile. North Carolina, with roughly the same population as Georgia and comparable economic and education metrics, has less than a third as many of its citizens in that bottom quartile. Poor ol’ hapless Wheeler County, Ga., still ranks 3,113th out of 3,113 U.S. counties for the second year in a row.

Second, it’s increasingly difficult to ignore the juxtaposition between the state’s PCI performance and its shift to Republican governance. As I noted in one piece on this issue, Georgia made remarkable progress in raising the state’s per capita income in the final years of the 20th century and then surrendered all that progress in the opening years of the 21st century. That rise-and-fall pattern coincided perfectly with the final years of Democratic leadership at the Gold Dome and the opening years of Republican leadership. I said in my early pieces on this subject that I was reluctant to blame Republicans for the collapse in PCI performance, but the question seems a fair one. Sonny Perdue, who defeated incumbent Democratic Governor Roy Barnes in 2002 and became Georgia’s first Republican governor in more than a century, oversaw the biggest decline in PCI performance in at least the last half-century. Under his leadership, Georgia’s per capita income fell from 94.6 percent of the national average to 85.6 percent and we dropped in rank from 26th place to 41st. To be fair, Perdue presided over one of the most challenging economies in the state’s history; he took office in the wake of 9/11 and governed through the Great Recession. But he was hardly alone; 49 other governors faced the same challenges. The question is, why did Georgia fare so much worse during this period than nearly all other states? In the 20 years from the beginning of Democrat Joe Frank Harris’s first term in 1983 and the end of Barnes’s four-year tenure, only one state — Vermont — gained more ground; in the 20 years from the beginning of Perdue’s tenure through the first three years of Governor Brian Kemp’s first term, only one state — Delaware — lost more ground.

Third, one possible answer to that question that deserves more attention is whether Georgia is paying an economic development price for cuts to education. Governor Perdue and his successor Nathan Deal chopped billions of dollars out of the state’s education budget. In what may have been a prescient Georgia Trend column headlined “Perdue’s sad legacy,” the late Tom Crawford wrote this in March 2009: “Georgia is competing against other states to lure sophisticated, high-tech businesses at the same time that we’re spending $2 billion less to train and educate the prospective work force. This doesn’t make any sense at all.” At the same time Crawford wrote that column, rural Georgia enrollment in University System of Georgia institutions was beginning a significant downhill slide. In 2013, the Fiscal Research Center at Georgia State University produced a report titled “Population, Employment, and Income Trends for Georgia and Atlanta.” Authored by Professor David Sjoquist, that report noted several softening economic trends and listed educational performance as one of the possible reasons why. “It is possible that the relative low performance of the K-12 education system is slowing growth,” Sjoquist’s report said. “The skill level required for most jobs has increased, which means an educated labor force has become increasingly important for attracting jobs. On lots of dimensions, Georgia’s K-12 education system performs well below the national average.” That report went on to note that Georgia ranked “19th in terms of the percentage of the population with at least a college degree,” but neglected to mention that those college graduates were concentrated overwhelmingly in the Atlanta area.

Fourth (and this is being really, really, really charitable), Georgia’s Job Tax Credit ain’t working as originally planned. This program was created in the early 1990s and basically codified raising per capita income, reducing poverty, and creating jobs as important economic development objectives. Initially, the JTC program focused solely on the state’s 40 poorest counties — as determined by a formula that factored in county-level PCI, poverty rates, and unemployment rates. Over time, the program has been expanded in several ways. It now includes all 159 counties, no matter how prosperous, and the counties have been placed in one of four tiers, depending on how they score on the PCI/Poverty/Unemployment formula. Tax credit amounts have been increased and the number of new jobs a business has to create to qualify for the credits has been reduced. When the program was launched in 1991, a company had to create a minimum of 10 jobs in one of the state’s Bottom-40 counties to qualify for a $1,000 per job credit; now, the minimum requirement for those Bottom-40 is down to two jobs and each one entitles the job creator to a $3,500 tax credit. But even that isn’t working — at least not for Georgia’s poorest counties. According to a report by the Georgia Department of Revenue (DOR), $56.7 million in tax credits were claimed in 2021 for the creation of 20,417 jobs. My analysis of that report found that only 1,734 of those jobs were created in that year’s Bottom 40 counties, and 20 of those counties didn’t get a single new JTC-supported job. In contrast, Fulton County alone picked up 5,974 new JTC-supported jobs.

Fifth and last, stir all this data together in a big pot and it pretty much boils over with irony. Perhaps the biggest of these is political. According to the above-mentioned DOR report, 79 of Georgia’s 159 counties didn’t get a single new JTC-supported job in 2021; in the 2022 governor’s race, 71 of those counties went for incumbent Republican Governor Brian Kemp. This includes three of the four counties — Brantley, Glascock and Pierce — that gave 90 percent of their vote to Kemp; the fourth of Kemp’s 90-percent counties — Banks — snagged 22 such jobs. Fully 60 percent of the 2021 jobs created under the JTC program went to Democratic counties.

Watch this space. There’s more to come on all these topics.

Copyright Trouble in God’s Country 2023

Jul 7

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Stacey Abrams pursues a risky campaign strategy

It’s increasingly clear that Stacey Abrams is pursuing a high-risk – dare I say foolhardy? – strategy in her quest for the office of Georgia governor. 

She’s actually asking voters to think.

What I haven’t been able to decide is whether this was her plan all along?  Or if she backed herself into a corner with her “inelegant” (as she later put it) statement that Georgia is “the worst state” in which to live?

Abrams, the Democratic Party’s gubernatorial nominee, was complaining at an event in May about incumbent Republican Governor Brian Kemp’s incessant invocation of an economic development trade publication’s ranking of Georgia as “the top state for doing business” when she flipped that on its head and offered up the “worst state in the country to live” comment.

The statement was widely panned by Kemp and some in the media as a gaffe.  In a Facebook thread, one politically savvy friend bluntly criticized it as “a dumb, unforced error.”  Another, the estimable Bill Cotterell, long ago UPI’s man at the Georgia State Capitol and now a semi-retired political columnist for The Tallahassee Democrat, offered a more complete explanation.  “My kid might be ugly,” he said, “but you’re not going to win my vote by proving it to me.“

Probably not, but Abrams seems determined to give it her best shot – and for what it’s worth, she’s no stranger to novel political strategies.  When she first took on Kemp four years ago, she came closer to winning than any Democrat in the current millennium by running as an unapologetic progressive.  Four years earlier, Jason Carter and Michelle Nunn, progeny of the state’s two leading Democratic families, got clobbered by running GOP lite campaigns for governor and U.S. Senate.

The Kemp camp, meanwhile, has been positively and predictably gleeful in its reactions – but in the process, it may have overreached.  Kemp and his minions delighted in whacking Abrams about the head and shoulders with press statements and tweets. “Stacey Abrams may think differently,” Kemp harrumphed on Twitter, “but I believe Georgia is the best state to live, work, and raise a family.” To have done less would have been political malpractice, a felony in Georgia.

But then they took it a step further and focused their first ad of the campaign on the issue.  The 30-second spot features Abrams making her “inelegant” statement followed by a handful of headlines favorable to Kemp, after which a narrator declares that Kemp has “kept Georgia the best place to live.”

Really?   

Here, we should pause to recognize the difference in campaign strategies.  If Abrams is asking voters to think, Kemp is asking them not to; instead, he wants them to feel. 

For what it’s worth, his is the more traditional and time-tested approach.  Voters arguably vote their hearts far more than their heads, and appealing to their sense of pride (“best place to live”) no doubt works better in that regard than insulting them (“worst place to live”).

But Kemp’s “best place to live” claim is such an overreach that it merits a TIGC fact-check, and we give it a half-dozen Pinocchios and a pair of flaming tighty-whities.  First, the ad’s messaging logic (for lack of a better word) merits scrutiny (not to mention a belly laugh).  After spotlighting Abrams’s “worst state” comment, the ad features a montage of positive business headlines that are then used as a springboard to the “best place to live” claim.

A strong local economy is obviously critical to a community’s overall viability, but economic development doesn’t automatically lead to quality-of-life improvements and the two don’t always go hand in hand. Further, it seems worth noting that the much-vaunted business ranking from Area Development magazine focuses exclusively on business considerations and does not, as nearly as TIGC has been able to discern, factor in quality-of-life metrics.

Indeed, at least one of the key categories Area Development uses to measure and compare the 50 states seems to be at odds with improving the economic livelihood of individual Georgia citizens. More than 30 years ago, the General Assembly created a job tax credit program that measured the economic standing of Georgia’s counties by three key metrics — unemployment, poverty, and per capita income. Counties that scored poorly by those measures would be targeted with generous tax credits to encourage businesses to set up shop and create jobs in them.

Through the 1980s, ’90s, and early 2000s, Georgia made remarkable progress on arguably the most important of those three — per capita income (as TIGC has documented in previous posts, here, here, and here). Between 1980 and the end of the century, the state’s average PCI rose from 84.5 percent of the national average to 95 percent, and our rank among the 50 states climbed from 38th to 24th.

In the first decade of the current century, Georgia’s PCI performance fell back to 1980 levels; as of 2010, our average PCI was 85.6 percent of the national average and we ranked 40th among the 50 states. That reversal of fortune coincided with the transition of political power at the State Capitol from Democrat to Republican. While it’s difficult to determine cause and effect, the state’s first GOP governor in modern times, Sonny Perdue, presided during his eight years in office over a 15-place drop in the national rankings. Only one state suffered a bigger drop during that same period; Delaware fell 16 places.

Since then, the state’s PCI performance has been relatively static, bobbing up and down slightly first under Governor Nathan Deal and now under Kemp. As of the end of 2020, Kemp’s second year in office, the state’s average PCI was up to 87 percent of the national average but our rank remained 40th among the 50 states.

In Area Development’s view, that’s apparently not a bad thing. Georgia, for instance, tied with Texas for the No. 1 spot in a category called “Competitive Labor Market,” about which the magazine said, in part: “Companies choosing locations in Georgia and Texas appreciate the fact that they both have wages below the average in more than half of all other states … “

That wasn’t true when the Republicans came to power, but it certainly is now — with the ironic consequence that Georgia’s claim to being the No. 1 state for business is predicated in part on the fact that its citizens earn less on average than their counterparts in 39 other states.

Area Development, however, isn’t the only media outlet that ranks states for their overall business environment. CNBC has been doing the same thing since 2007, and Georgia generally fares well in its rankings as well; the state finished in CNBC’s Top 10 every year except 2008 and claimed 1st place in 2014.

CNBC’s methodology has evolved over time, however, and recently it added a category it calls “Life, Health & Inclusion.” Here, the news for Georgia is not so good.

CNBC even published an online sidebar under the headline “These 10 states are America’s worst places to live in 2021.” In this “Life, Health & Inclusion” category, Georgia got an “F” and finished 6th — that is, as the 6th worst place to live in America. Behind Alabama.

Let me repeat that: Behind Alabama.

The challenge for Abrams is in communicating this kind of information in ways that rile voters up without turning them off. If Kemp is trying to make voters feel good about Georgia as a place to live, Abrams should be trying to make them mad. So far, I’m not sure she’s accomplishing that. Most of her critiques (that I’ve seen) have focused on the state as a whole.

She’s up on social media, for example, with an ad that spotlights 82 Georgia counties that don’t have any OB/GYNs and another (below right) that lists the state’s poor ranking in a number of health-related categories. Whether that kind of messaging cuts through remains to be seen. I don’t have the benefit of any polling data, but I’m skeptical that statewide numbers resonate at local levels.

Take, for example, Brantley County. Located in deep southeast Georgia, Brantley County ranks near the bottom of every national economic, educational, and health analysis I’ve conducted. Nationally, it ranks in the bottom one percent of U.S. counties for per capita income, the bottom five percent for educational attainment, and the bottom 13 percent for premature death — and it’s actually doing better than a fair number of its neighboring rural Georgia counties.

But the thing that distinguishes Brantley County is that it’s the most Republican county in the entire state. In the 2016 presidential election, Brantley County voters gave Donald Trump 88 percent of their vote. In the governor’s race two years later, they went for Kemp by an even bigger margin — 91.3 percent to 8.1 percent for Abrams. In the 2020 presidential race, they sided 10-to-1 with Trump: 90.3 percent for the incumbent Republican to 9.0 percent for Joe Biden.

If voters anywhere ought to be frustrated with their economic, education, and health situations, you’d think it would be the folks in Brantley County — especially since they’ve been losing ground in recent years. In 2002, the last year a Democrat occupied the governor’s office, its average PCI was 63.3 percent of the national average; in 2020, the latest year for which data is available, Brantley’s average PCI was down to 50.4 percent of the national average.

Kemp, of course, is at no risk of losing Brantley County, but if Abrams succeeds at getting even a small fraction of voters there and in other beleaguered blood-red counties to think about something other than the party label, it just might make a difference.

(c) Copyright Trouble in God’s Country 2022

Apr 28

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Chapter III in my ongoing post-mortem of Georgia’s PCI performance from 1980-2020

Late last year, I posted two pieces about Georgia’s per capita income (PCI) performance.  I hadn’t intended to do that.  My original objective had been to take a quick look at a new release of 2020 PCI data from the U.S. Bureau of Economic Analysis (BEA), knock out a quick one-off, and move on. 

But one thing I always try to do, especially when I’m working with a national dataset, is put Georgia’s numbers into a national context.  When I did that with this latest batch of BEA data, I was surprised to find that Georgia had more people and counties at the bottom of the national PCI pile than any other state in the nation.

The straight blue line at the 100% mark represents the national average for per capita income (PCI). The orange line represents Georgia’s performance relative to that national average, based on data from the U.S. Bureau of Economic Analysis (BEA).

That became the lede of the first piece.  It also got my curiosity up, and I started backtracking through 50 years of BEA data to see if I could figure out what was happening.  That resulted in the discovery of what I described, in the second piece, as Georgia’s 40-year PCI roller-coaster ride.  The state made massive, almost unmatched gains during the final 20 years of the last century, then surrendered all those gains during the early part of this century.

As a long-ago political journalist (and now an aging political junkie), I couldn’t help but notice how the state’s PCI roller-coaster ride matched up against the state’s political timescale.  All the gains took place under Democratic governors; all the losses followed under Republicans.  I deliberately stopped short of ascribing credit or blame (and still do), but the pattern was (and still is) difficult to ignore.

The political question aside, I began to think the rise and fall of Georgia’s PCI trendlines is a significant part of the overall TIGC story — maybe a key driver in fueling the ongoing divide between urban and rural Georgia and, especially, Metro Atlanta and the rest of the state. I’ve since come to view the story as something of an economics and maybe political cold case, and I’ve spent an embarrassing amount of time researching various angles over the past few months (which is one reason I haven’t posted much lately).

Among other things, I began to pick the brains of various contacts who moved in political and economic development circles during that 40-year span; found and plowed through a couple of dozen relevant reports and articles, and took several deep dives into other pots of economic data for the 40-year period.

The result of that research is a couple of binders full of material and several storylines that are tough to bring together in a single piece and would be too long for a blog post even if I did. As a result, I’ve decided to dribble it out in a series of brain dumps that should, if nothing else, help me clear my head so that I can move on to other subjects (several of which have been stacking up over the past couple of months).

Brain Dump No. 1 follows.

———-

One of the first things I learned in my research is that the 40-year PCI roller-coaster ride I reported on in December wasn’t exactly breaking news.

It turns out that the Fiscal Research Center (FRC) at Georgia State University had been monitoring the same metrics (and others) for a while. In September 2013, the FRC published a 26-page report by Professor David L. Sjoquist that, among other findings, found essentially the same roller-coaster pattern I did late last year.

(I say “essentially” because there appear to be some very minor differences in some of the data Professor Sjoquist and his team found in 2013 versus what I found late last year.  I suspect these differences owe to periodic revisions and refinements BEA (which was also Sjoquist’s source) makes to its data.)

The Sjoquist report looked at population, employment, and income trends and noted, broadly, that the state’s growth rates appeared to be slowing.  It also mused about various potential causes for these trends, including poor public schools, the loss of jobs to other countries, bad traffic, even a “leadership vacuum” in the business community (which had indeed been undergoing a transition from an era dominated by homegrown barons like Robert Woodruff, Mills B. Lane and Tom Cousins to a new generation of imported CEOs who headed a wave of new Fortune 500 companies putting down stakes in Metro Atlanta). 

The closest it came to pondering the efforts of the state’s gubernatorial administrations was this bullet point in a section of the report focused on employment trends:

“Georgia may be pursuing the wrong economic development strategy, which currently seems to be focused on providing tax incentives. Perhaps a strategy that focused more on providing a better labor force, infrastructure, and amenities would result in greater net job growth.”

Nor did the FRC take note of the fact that the wind had gone out of the state’s economic sails only after the GOP took over the state capitol.  And, again, that may indeed have been coincidental.  Georgia’s economy was red hot through much of the 1980s and ‘90s, and nothing lasts forever. At least one important figure did seem to think gubernatorial focus was relevant to the state’s economic focus, however.

George Berry, who served as commissioner of the Department of Industry, Trade & Tourism (now Economic Development) under Governor Joe Frank Harris during the 1980s, put a bright spotlight on PCI in a guest column for Georgia Trend magazine in January 2011. Governor Sonny Perdue, the state’s first GOP governor in a century, was leaving office and his successor, Republican Nathan Deal, was about to begin his first term. 

In that piece, Berry wrote:

“As Gov. Nathan Deal begins his administration, he would do well to consider the over-arching accomplishment that defines Georgia’s advancement over the last half century: the progress we have made toward economic parity with the rest of the nation.

“That progress can be best defined by comparing the per capita income of Georgians to that of citizens of other states.

“For decades Georgians lagged in this elemental measure.  As late as the onset of World War II, we were barely at 60 percent of the national average per capita income.  This is not an abstract but rather an intensely personal statistic.  It measures how much education one can afford, how much healthcare one receives, whether one can take his children to a dentist and even how many culturally enriching experiences one can have.”

Berry concluded his column with this: “If our new governor can improve this vital statistic, he will be assured of a successful administration.  Because it is a measure easily calculated, everyone can keep score.  It is in all of our best interests that Gov. Deal be the one to celebrate that day when Georgia finally achieves 100 percent of the national average per capita income.”

(I wrote about Berry in this post nearly a year ago, and I’ll have more to say about his focus on PCI in another of these brain dumps.)

As things worked out, Georgia’s PCI performance under Deal was basically flat.  It gained a little ground in 2011, suffered a two-point drop in 2012, and then made slow but steady progress until the end of Deal’s second term in 2018.  At that point, Georgia’s average PCI stood at 86.7 percent of the national average; in Governor Brian Kemp’s first two years in office, that number ticked up ever-so-slightly to 87.0 percent – just under the 87.1 percent figure the state posted at the end of Joe Frank Harris’s first year in office.

Thus endeth Brain Dump No. 1.

Watch this space.

               

Dec 9

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Georgia’s 40-year PCI rollercoaster ride

In the final 20 years of the last century, Georgia made remarkable economic progress on at least one front: the state’s per capita income (PCI) gained more than 10 percentage points against the national average and came within five points of that important benchmark. In the process, the state’s PCI rank among the 50 states and the District of Columbia climbed from a low of 41st to a high of 25th.

In the first two decades of this century, however, Georgia has surrendered nearly all those gains and fallen back into the nation’s bottom ranks for per capita income. Its 2020 rank was 37th. Only three states gained more ground against the national PCI average than Georgia between 1980 and 2000, and only four lost more ground between 2000 and 2020.

In the process, hundreds of thousands of Georgians were first lifted out of the bottom national quartile for per capita income but have since fallen back into it. As TIGC reported in its last post, Georgia finished 2020 with more of its citizens living in bottom-quartile PCI counties than any other state in the union, including states like Texas and Florida with significantly larger populations.

While that last post focused exclusively on new 2020 data released in November by the U.S. Bureau of Economic Analysis (BEA), this one takes a deeper look at a half-century’s worth of PCI data with an eye toward trying to answer a question we posed in the last post: Why is such a large portion of Georgians apparently stuck at the bottom of the nation’s income ladder?

The answer to that question remains elusive, but the lookback at the last 50 years reveals that Georgia has been on a PCI rollercoaster that is all but unique among the 50 states and D.C. Through the 1970s, Georgia’s PCI ranking was basically flat at between 38th and 40th place among the 50 states and D.C. But from 1983 through the end of the century, the state’s ranking climbed steadily, if unevenly, to a peak of 25th place in 1999 before plateauing at 26th place for the next three years. Since then, Georgia has dropped precipitously in the national PCI rankings. It bottomed out at 40th and 41st from 2008 through 2015 before rebounding to 37th by the end of 2020.

These are among the major findings and observations from an ongoing TIGC review of 50 years of personal income data produced by the U.S. Bureau of Economic Analysis (BEA).

And while identifying the exact causes of the state’s rollercoaster ride will require further research, it’s difficult to ignore the overlap between the rise and fall of the state’s PCI fortunes with the transition in the state’s political leadership: all the gains occurred under Democratic governors and all the losses followed under Republicans.

The most dramatic progress came under Governor Joe Frank Harris, who served from 1983 through 1990. During that period, Georgia moved up in the PCI rankings from 37th to 30th. The progress continued under Governor Zell Miller, who succeeded Harris and served the next eight years. After plateauing at 30th or 31st for three years, the state resumed its climb and reached 26th place by the time Miller left office at the end of 1998. Under Governor Roy Barnes, the state’s last Democratic governor, the state’s PCI ranking peaked at 25th in 1999 and then plateaued at 26th for the final three years of his one term in office.

Barnes lost his 2002 reelection bid to Sonny Perdue, who took office in January 2003 as the state’s first Republican governor in modern times and went on to handily win reelection in 2006. By the time he left office in 2010, Georgia’s national PCI ranking had plunged 15 spots to 41st, tying an all-time low for the last half-century.

Under Nathan Deal, Perdue’s successor and the state’s second GOP governor in more than a century, the state’s national PCI ranking floated along at 41st and 40th for the first five years of Deal’s two terms before rebounding slightly to 38th by the time he left office. Now two years into the term of the state’s third Republican leader in modern times, Governor Brian Kemp, the state stands 37th in the nation’s PCI ranking — the same ranking it had when Governor Harris took office.

Whether the various governors deserved all the credit or blame for the ups and downs in the PCI rankings is a matter for debate, but it seems a fair question. Were there changes in economic development, education or other policies and practices that drove the rankings and, more importantly, the personal fortunes of Georgians impacted by the 40-year seesaw effect? Or was it all just a huge coincidence?

As part of this analysis, I have used the BEA data to rank all the counties in the country by per capita income, sort them into national quartiles, and then pull the 159 Georgia counties out of the national list. As a result, I can determine how many Georgia counties — and Georgians — lived in each quartile in any given year. So far, I’ve done this part of the analysis for each year preceding a gubernatorial transition.

At the end of 1982, just before Harris took office, some 21.8 percent of the state’s 5.65 million residents — about 1.23 million people — lived in 91 counties in the bottom quartile of the nation’s PCI rankings. By the time Barnes left office in 20 years later, those numbers were down dramatically: less than 10 percent of the state’s 8.51 million citizens — fewer than 830,000 people — lived in 53 counties in that bottom national quartile.

When Perdue left office in 2010, the percentage of Georgians living in bottom quartile counties had exploded to more than 30.3 percent of the state’s estimated population of 9.7 million people — some 2.9 million people in 104 counties. At the end of 2020, the picture was no better: more than 3.05 million Georgians were living in 104 bottom quartile counties — the most of any state in the country, as TIGC reported in its last post.

To be clear, Georgia’s PCI has continued to rise throughout this period, but for the past 18 years it has lost ground against the national average. When Barnes left office at the end of 2002, the state’s average PCI of $30,133 was 94.6 percent of the national average of $31,859. When Perdue left office eight years later, the state’s average PCI stood at $34,830, but that was only 85.6 percent of the national average for 2002: $40,690.

The two graphs below should help tell this story. The first one illustrates the rise and fall of Georgia’s per capita income as a percentage of the national average. The straight blue line across the upper part of the graph represents the national average across the 40-year timescale. The orange line below it illustrates the rise and fall of Georgia’s per capita income as a percentage of that national average.

This second graph shows how Georgia’s actual per capita income tracks against the national average over the past 40 years. The gap narrowed, sometimes unevenly, through the 1980s and ’90s before beginning to widen at the turn of the century.

This is the second of at least three posts I’m developing based on the BEA’s latest economic data. In the next one, I’ll return to my usual focus on the state’s urban-rural divide, including trends in the different regions of the state.

(c) Copyright Trouble in God’s Country 2021