From Foresight, Vol. 9, No. 3
published 2002
The terrorist attacks on September 11, 2001, and subsequent anthrax incidents have left an indelible mark on the United States. While the calculable short-term cost was as much as $80 billion in property damage and around 3,000 fatalities,(1) the long-term consequences are less obvious or certain. It appears, however, that the resulting shift in U.S. foreign, defense, and domestic policy could have significant and far-reaching implications for state and local government responsibilities, the economy, public finance, and civic engagement. It is important for state and local policymakers to anticipate the future challenges and opportunities created by these events so that appropriate long-term policy responses are developed for the changed world ahead.
Perhaps the most obvious consequence of the terrorist attacks for state and local governments is the overall increase in their responsibilities, portending an emerging federalist revival. For example, the states’ legislatures and governors have developed long lists of homeland security initiatives, which include everything from bolstering the public health system to ensuring agriculture and food safety to developing the capacity for dealing with a chemical, nuclear, or biological attack.(2) The states are clearly hoping the federal government will pay for these initiatives, but the federal government has stated that “it is critical that all levels of government work cooperatively to shoulder the costs of homeland security.”(3) As the locus of responsibility for launching and financing new initiatives shifts from the federal to the state and local level, so too will the relative authority among them.
More Heavy Lifting and Better Preparation. These attacks will likely accelerate the shift in fiscal federalism, where state and local governments assume responsibility for tasks traditionally provided by the federal government. As the FBI and Coast Guard shift their focus to counterterrorism, for instance, state and local officials anticipate playing a larger role in fighting illegal drug traffic, investigating white-collar crimes, and handling search-and-rescue missions. In addition to taking on new roles, long-standing ones like public health, public safety, and network security are expanding, and underlying the increased workload is the expectation that these functions be performed better.
Evidence, however, suggests that much work remains to be done. To ascertain the level of preparedness for a chemical or biological terrorist attack, RAND conducted a national survey from March to September 2001, involving more than 1,000 state and local organizations, ranging from fire departments to emergency medical services to offices of emergency response. Their survey results show “few organizations have a plan in place sufficient to address [a] moderately sized chemical and biological incident.”(4) Even a year after the September 2001 attacks, studies show that many of these organizations are not prepared for a terrorist attack. The Federation of American Scientists, for example, issued a report in which they noted that most emergency responders (police, fire, emergency medical technicians, etc.) feel they are not prepared for a weapon of mass destruction (WMD) emergency.(5) And a survey of schools by the National Association of School Resource Officers found that “an overwhelming majority (95 percent) of school-based police officers feel that their schools are vulnerable to a terrorist attack and a substantial percentage of officers (79 percent) do not feel that schools within their districts are adequately prepared to respond to a terrorism attack upon their schools.”(6) In the future, state and local governments will be expected to do more, and do it better.
Enhanced Coordination and Cooperation. As the authority and responsibility of state and local governments increase, so does the necessity that they work together cooperatively. Yet, the relationships between and among states, counties, and cities can best be described as competitive. The states vie with each other for everything from industrial locations to federal dollars. Cities, counties, and regions within states are similarly competitive. However, a new culture of cooperation along with mechanisms for coordination will be needed to ensure the effective and efficient implementation of homeland security initiatives among the country’s 87,900 government jurisdictions.(7) This includes 3,034 county governments, 19,431 municipal governments, 16,506 townships, and 35,356 special districts—which play a role in everything from fire protection to supplying water.(8) Due to the sheer number of government units in the United States, it will not be easy to orchestrate coordinated activities among them.
Kentucky is representative of the challenge. It is home to 120 counties, 467 municipalities, 55 health department districts, 126 hospitals, 15 fire rescue districts, 146 water supply districts, 12 state police posts, 14 emergency management areas, 9 natural resource districts, 12 transportation districts, and numerous fire and police departments. Moreover, 48 Kentucky counties—representing 53 percent of the state’s population—share a border with 48 other counties in 7 different states. Consequently, planning for or responding to a terrorist incident in Kentucky, or neighboring state, would require a cooperative and coordinated response from a multitude of governmental units and the private sector. As responsibilities increase, policymakers will be challenged to enhance coordination and cooperation in a political culture that has not always encouraged it.
Similar to a devastating earthquake that reorders the landscape—wreaking considerable damage while simultaneously revealing previously undiscovered natural resources—the terrorist attacks have shifted the economic landscape to reveal new economic opportunities. The demand for everything from facial recognition software to a safer smallpox vaccine to certifiably-safe food has increased, thereby creating opportunities for the well-positioned entrepreneur. Mostly, however, the immediate shock waves following the terrorist attacks jolted the U.S. economy. In the face of long delays at border crossings and ports for people and goods, businesses began questioning the wisdom of “just-in-time” delivery, and business travelers and vacationers stayed close to home. The U.S.-Canadian border became a virtual parking lot, disrupting the daily flow of roughly 500,000 vehicles and $1.4 billion in commerce.(9) Hotel and motel occupancy rates throughout California declined by double digits, as did air traffic volumes.(10) In Florida, where tourism is the largest industry, visitor rates decreased by 19 percent in the final quarter of 2001.(11) The Greater Louisville Convention & Visitors Bureau blamed the terrorist attacks, as well as a slow economy, for a 6.8 percentage point decrease in the hotel-motel occupancy rate from 2000 to 2001.(12) Consequently, lower profits and job losses in the travel and tourism business followed in the wake of the attacks. While many businesses have recovered from the initial shock, some sectors of the economy—like the airline industry—continue to feel the effects. Ultimately, the threat of terrorism could alter the nation’s economic landscape across multiple sectors and endure for years.
International Trade and Commerce. The vulnerability of the international trading system to terrorist attack could affect future prospects for global commerce. The value of foreign trade to the U.S. economy has increased steadily over the last 30 years. U.S. trade, which includes exports and imports of both goods and services, is currently equal to about 25 percent of the U.S. gross domestic product and has increased markedly during the last several years (see Figure 1). On a national basis, the exporting of goods (not including services or imports) is equal to about 8 percent of the gross national product. Moreover, in some states this percentage reaches into double digits, led by Vermont (22.3 percent), Washington (14.6 percent), Texas (14 percent), Louisiana (12.2 percent), and Michigan (10.4 percent). Kentucky is 11th at 8.1 percent.(13)
Figure 1: U.S. Trade Relative to National Output, 1960 to 2001
But expanding global trade could be adversely affected in the event of a future terrorist incident involving a weapon of mass destruction concealed inside a conex container. These shed-like containers account for 60 percent of the volume of world trade,(14) and 50 percent of the value of U.S. imports.(15) According to a recent New York Times Magazine article: “Two thousand containers enter America every hour, on truck and trains and especially on ships sailing into more than 300 American ports,”(16) which translates into around 16 million conex containers each year.(17) Unfortunately, fewer than 2 percent of these containers are actually opened and inspected,(18) since (in the words of the Coast Guard Commandant) “slowing the flow long enough to inspect either all or a statistically significant random selection of imports would be economically intolerable.”(19)
Obviously, were such a horrific scenario to enfold, it would irrevocably change the system of global trade and profoundly affect the economies of many states—potentially causing up to a $1 trillion in damage and disruption.(20) How big is $1 trillion? It is more than the annual gross product of every state except California, whose gross state product in 2000 was $1.34 trillion. Regardless, in an effort to ensure this scenario never happens, higher security at ports and borders is increasing the cost of goods by an estimated 1 to 3 percent, which some economists believe is sufficient to have a large effect on trade patterns.(21) States with high levels of exports are vulnerable to the vagaries of global trade and should closely monitor the impact that increased security has on future trade patterns. Business decisions on the location of facilities and factories could be affected by the cost and security considerations related to trade, thereby affecting the strategies and incentives used by states to attract and retain businesses.
Immigration. The Bush administration’s Homeland Security Budget for 2003 concentrates on four specific policy initiatives, one of which is “securing America’s borders.”(22) The president has proposed $11 billion for a variety of programs to monitor the border and track the arrival and departure of non-U.S. citizens.(23) While some have challenged the efficacy of tougher border enforcement actions,(24) this new initiative could significantly reduce the flow of illegal immigrants into the United States, a population estimated at between 5 million(25) and 9 million.(26)
Moreover, public opinion toward (legal) immigration has become somewhat more negative since September 11. A Gallup Organization poll conducted before the terrorist attacks (June 2001) revealed that 41 percent felt immigration levels should be decreased compared to 42 percent who would like to maintain the current level.(27) However, a June 2002 Gallup poll found that “49% of Americans believe immigration levels should be decreased, 36% believe they should be kept at their present levels, and 12% think they should be increased.”(28) Similarly, 62 percent said that immigration was a good thing for America in June 2001, compared to 52 percent in June 2002.(29)
A decidedly negative shift in public opinion about immigration and/or a successful reduction in the number of illegal immigrants could hold long-term implications for the U.S. economy. The U.S. labor market depends upon immigrants for a significant portion of its labor supply; this includes everything from computer programmers to restaurant busboys to nurses. In fact, during the past decade immigrants accounted for roughly one third of the increase in the size of the workforce,(30) and from 1996 to 2000 the “foreign born constituted nearly half of the net labor force increase.”(31) According to Federal Reserve Chairman Alan Greenspan, immigration policy will exercise a considerable impact on the U.S. economy over the long-term.(32) Thus, to the extent that legal and illegal immigration are reduced, states will be challenged to bolster the composition of their workforce by other means, which might require increased funding for adult education and job training programs to enhance their existing labor pool. Clearly, states and regions with higher levels of immigrants are more likely to be affected by changes in immigration policy (see Tables 1 and 2).
Table 1: Estimated Illegal Immigrant Population for Top 20 States of Residence, October 1996
Changing Defense Policy and Base Realignment and Closure. Counterterrorism has arguably become the new organizing principle for U.S. foreign and defense policy, suggesting implications as profound as those resulting from the onset of the Cold War.(33) The Bush Doctrine, which is based on the idea of preemption, represents a significant departure from established U.S. military doctrine and will require the transformation of the nation’s military force structure. President Bush made these points at the 2002 graduation exercise at West Point, “Our security will require transforming the military … a military that must be ready to strike at a moment’s notice in any dark corner of the world. And our security will require all Americans … to be ready for preemptive action when necessary to defend our liberty and to defend our lives (italics added).”(34) The transformation of military force structure will have significant implications for base realignment and closure, which will in turn affect state and regional economies.
Since the Base Realignment and Closure Act of 1988 (BRAC), which was designed to streamline the military and achieve cost savings, was passed, 97 major closures and 55 major realignments of military installations have taken place.(35) The next round of BRAC is scheduled for 2005, and the Pentagon currently estimates that the nation has between 20 and 25 percent more base capacity than is needed, indicating that more installations will be realigned and closed.(36) A principal factor determining an installation’s future will be its homeland defense value. The installations and units best suited for the evolving military doctrine are in the best position to ensure their continued existence.
Military installations are important to states’ economies. For example, the military spends about $4 billion in Kentucky each year, mainly due to Fort Campbell and Fort Knox.(37) In Utah, Hill Air Force Base employs more than 20,000 and pumps an estimated $1.8 billion annually into the state’s economy,(38) while Fort Stewart “represents a $1.85 billion-dollar annual economic generator” for Georgia.(39) One can cite examples like this for every state. Due to the economic impact these installations have on state and regional economies, policymakers need to pay increased attention to the geopolitical arena and understand how it affects their state’s military units and installations.
Lower Economic Growth. Another implication of changing defense policy is the increase in defense and homeland security expenditures. When measured in constant 2002 dollars, the 2003 defense budget will be one of the largest since 1950.(40) However, when measured as a percentage of gross domestic product (GDP), near-term defense budgets are projected to be lower than during the 1980s or 1990s (see Figure 2). Indeed, the Office of Management and Budget projects that defense spending in 2006 will be about 3.3 percent of GDP, which is significantly less than the 1980s average of 5.8 percent or the 1990s average of 4.1 percent.(41) Nonetheless, these projections are based on the assumption that the war on terrorism can be fought without a massive increase in defense spending—an assumption that will be tested if the United States goes to war with Iraq. Preliminary estimates of a war with Iraq range from $50 billion to $200 billion, indicating that future defense spending could go even higher.(42) Increased defense spending over the long term lowers economic growth because it diverts resources from more economically productive uses in the private sector.
Figure 2: U.S. Defense Spending as a Percentage of Gross Domestic Product, 1952-2007
Another factor affecting economic growth is the cost of the terrorist attacks to American business. Estimated at $151 billion, the cost equals just over half the total earnings of the FORTUNE 100 companies in 2001.(43) This includes $18 billion for workplace security (e.g., more guards and metal detectors), $15 billion for information technology security (e.g., backup systems), $65 billion for logistical changes (e.g., transportation costs, warehouses), $12 billion in additional travel costs (e.g., airport waits), $35 billion for insurance, and $6 billion for employee absenteeism. Since many of these costs are recurring, they can exert sustained downward pressure on the nation’s long-term economic growth. According to Richard Berner, Morgan Stanley’s chief U.S. economist, the cost over time could be a 0.5 percentage-point reduction in annual growth in domestic output.(44) Economists at the Paris-based Organization for Economic Cooperation and Development (OECD) have estimated the long-term impact of increased private and public spending for security and defense at about 0.7 percent lower real gross domestic product.(45) However, some reports indicate that businesses are not allocating huge resources to increased security, either in the form of more guards or better network security.(46) As time passes without another terrorist attack, the sense of urgency about increased security spending will almost certainly wane.
The war on terrorism is unlike any other America has waged. While the Cold War seemed permanent, the war on terrorism may well be permanent.(47) Given the nature of the threat—that a handful of people using weapons of mass destruction could inflict horrendous damage—we can never assume the threat is gone. And while the cost of protecting ourselves is high, the cost of not protecting ourselves is clearly higher. Consequently, we have entered a permanent war economy with lasting and somewhat uncertain implications.
The war on terrorism will be expensive for state and local governments. In fact, according to a survey conducted in June 2002 by Deloitte Consulting, Inc., homeland security expenditures by federal, state, and local governments, and the private sector could range between $98 billion and $138 billion in 2003,(48) or between $340 and $480 for every American. By comparison, education expenditures, the largest spending category for government, were around $483 billion in 1999 or about $1,780 for every American.(49)
Increased governmental responsibilities and the possibility that economic growth will be lower than otherwise over the long-term virtually ensures an enduring focus on public finance. The reason is simple: as the economy goes, so does government revenue. In fact, the Congressional Budget Office (CBO) is forecasting a 60 percent decline in the federal budget surplus from 2003 to 2012, the steepest decline in tax revenue since 1946.(50) While there are many reasons for the declining surplus, economists partially attribute it to a weak economy and increased spending for homeland security. Meanwhile, state and local governments have their own fiscal problems. According to the National Conference of State Legislatures (NCSL), 43 states reported budget gaps by April 2002 that totaled $37.2 billion by the end of the 2002 fiscal year.(51) And budget shortfalls at the state level are contributing to the financial problems of cities. A recent survey conducted by the National League of Cities (NLC) found that for the first time since 1993 a majority (55 percent) of city finance officers said “their cities are less able to meet their city’s financial needs in 2002, compared to 2001.”(52) According to NLC President Karen Anderson, mayor of Minnetonka, Minnesota, “Lower sales and tourism tax revenues and higher security spending translates into hard times for cities … it means that in some cities, residents won’t be getting the services they deserve because city budgets have been squeezed too tight.”(53)
Future Revenue and Expenditure Problems. As barren as the public finance landscape is today, it could get worse in the future. A number of economic and demographic trends indicate that state and local revenue systems might not be adequate in the future. Three vital sources of state and local government general revenue are sales taxes (20 percent), property taxes (17 percent), and income taxes (13 percent).(54) However, individuals are receiving a growing portion of their income from nontaxable sources, consumers are purchasing a larger amount of untaxed services and avoiding the sales (or use) tax through Internet or catalog purchases, and the aging of the population will reduce some state and local tax receipts while increasing some expenditures. Furthermore, Medicaid expenditures, the second largest item in most state budgets, accounts for 20 percent of all state spending and has been increasing annually at a double-digit rate. Medicaid expenditures increased by 11 percent in fiscal year 2001 and 13.4 percent in fiscal year 2002,(55) with CBO projecting an average annual growth rate of 9 percent between 2001 and 2012.(56) All of this has led one analyst to conclude, “State finances will be constrained quite tightly over the next several years even if the economy recovers nicely from the current recession.”(57) Consequently, it is likely that the cacophony for reforming or modernizing antiquated revenue systems will grow louder in the future.
Volatile Receipts. In addition to future receipts possibly being lower than expected, they could also be much more volatile. The war on terrorism will be ongoing, episodic, and unpredictable. The one thing markets hate more than anything is uncertainty, and war creates a lot of uncertainty. Since the late 1990s, the direct relationship between the direction of the stock market, for example, and government receipts has become more apparent.(58) Consequently, the states’ somewhat depleted budget reserve trust funds (i.e., rainy day accounts) will be needed to help moderate future revenue volatility. Yet, aggregate state budget reserves could decrease to $13.2 billion this year, a significant drop from $31.5 billion reported two years ago.(59)
Increased Competition for Federal Dollars. State and local governments depend upon the federal government to directly or indirectly fund an array of programs ranging from health care to education to transportation to corrections. Nationally, federal transfers account for about one fifth (18.9 percent in 1999) of the general revenue that finances state and local government spending—Kentucky is at 22.7 percent. However, in some states federal transfers account for over one quarter of general revenue, led by Montana and North Dakota (28.1 percent), Wyoming (26.7 percent), South Dakota (26 percent), West Virginia (25.5 percent), Tennessee (25.3 percent) and Vermont (25.3 percent).(60) However, at the 2002 National Governor’s Association summer meeting, the governors appealed to the federal government for additional funding to defray Medicaid costs. They were told by a Bush administration official present at the meeting to “look elsewhere for funding help.”(61) State and local governments are likely to hear this response with increasing regularity due to greater competition for federal dollars. Defense and homeland security expenditures are rising to high levels and could go higher. Both major political parties have proposed Medicare prescription drug benefits that could cost between $370 to $500 billion over the next decade. And in less than 10 years baby boomers will begin retiring, which will create enormous fiscal pressure on both Medicare and Social Security.
The prophetic words spoken in November 2000 by Dr. C. Eugene Steuerle, an economist with the Urban Institute, have increased resonance today in our changed world: “There will be extraordinary pressure upon states and localities to self-finance much of what they want to do in the near future.”(62) The war on terrorism will be expensive and the future revenue situation for most states and many local governments is bleak. Consequently, the pressure to modernize revenue systems or make difficult choices about spending priorities will increase.
In an era of fiscal constraint, it is likely that governments will look increasingly to community-based organizations, nonprofits, businesses, and citizens to forge partnerships and relationships to meet new challenges. Indeed, this is already beginning to happen. The Bush administration, for example, has created an organizing framework to marshal volunteers in homeland security efforts. The initiative, Citizen Corps, is described as “a local, community-based initiative to have every American become active participants in the homeland security effort …”(63) Of the numerous programs organized under the Citizen Corps, the Neighborhood Watch Program is probably the best known. Other programs include Community Emergency Response Teams, Volunteers in Police Service, and the Medical Reserve Corps. The citizen volunteers in these programs serve as low-cost extensions to state and local government personnel. As such, these programs allow government to do more with less by encouraging active civic engagement.
There is evidence that the citizenry is responding to the call for civic engagement. Independent Sector conducted a survey on giving and volunteering in response to the events on September 11, and found that “70 percent of people donated time, money, or blood to a charity or nonprofit organization in the four weeks after the terrorist attacks.”(64) A public opinion survey conducted in Kentucky during July and August 2002 shows that a significant percentage (30 percent) expressed an increased likelihood of attending meetings of nonprofit, charitable, civic, or community groups since the terrorist attacks.(65) However, it is debatable whether the renewed sense of community will endure. The challenge for policymakers and other community leaders will be to build on this rejuvenated sense of civic engagement, and to facilitate broad-based community involvement in other issue areas besides public safety and homeland security.
There are good reasons for enhancing a community’s stock of social capital or civic engagement. Studies have shown a link between participation in civil society and higher levels of prosperity and higher achievement in schools.(66) Brookings Institution researchers Jeffrey Berry, Kent Portney, and Ken Thomson argue that increased citizen participation not only positively affects citizens’ perceptions of the communities they live in, but it also increases the legitimacy and enhances the status of governmental institutions.(67) Civil society can also tackle problems such as poverty, illiteracy, and drug abuse that government and the market have failed to eradicate. Some research even suggests that members of communities with strong civil societies enjoy better health and live longer.(68) In the succinct words of Harvard political scientist Robert Putnam, “An impressive and growing body of research suggests that civic connections help make us healthy, wealthy, and wise.”(69)
Mounting responsibilities for state and local governments coupled with constrained resources portend rising relevance for civic engagement. Stronger social capital will not only allow government to do more with less, but will also strengthen the ties that bind us in the changed world ahead.
* Mr. Childress is Executive Director of the Kentucky Long-Term Policy Research Center. Return to text.
1 There are varying cost estimates of the terrorists’ attacks. According to estimates by the Organization for Economic Cooperation and Development (OECD), "The destruction of physical assets was estimated in the national accounts to amount to $14 billion for private businesses, $1.5 billion for State and local government enterprises and $0.7 billion for Federal Government. Rescue, cleanup and related costs have been estimated to amount to at least $11 billion." Moreover, insurance losses "are estimated at between $30 billion and $58 billion …" See OECD Economic Outlook 71, "Economic Consequences of Terrorism," (Organization for Economic Cooperation and Development, June 2002), 18 July 2002 http://www.oecd.org. The U.S. General Accounting Office reviewed several studies on the economic impact of the September 11 terrorist attack on the Twin Towers, and concluded that the most comprehensive estimate of the total losses of the two World Trade Center buildings at $83 billion (in 2001 dollars); this includes both direct and indirect costs. Refer to U.S. General Accounting Office, Review of Studies of the Economic Impact of the September 11, 2001, Terrorist Attacks on the World Trade Center, GAO-02-700R, 29 May 2002, 1 June 2002 http://www.gao.gov. Return to text.
2 Refer to Let’s Roll: A Call for State Action to Protect and Strengthen Our Democracy (Denver, CO: National Conference of State Legislatures) July 2002, 26 July 2002 http://www.ncsl.org/programs/press/2001/freedom/pd-execsum.htm and States’ Homeland Security Priorities (Washington, DC: National Governors Association Center for Best Practices) 19 Aug. 2002, 26 Sept. 2002 http://www.nga.org/center/divisions/1,1188,C_ISSUE_BRIEF^D_4303,00.html. Return to text.
3 U.S. Office of Homeland Security, National Strategy for Homeland Security, July 2002: 64. Return to text.
4 Ronald D. Fricker, Jr., Jerry O. Jacobson, and Lois M. Davis, "Measuring and Evaluating Local Preparedness for a Chemical or Biological Terrorist Attack," RAND Issue Paper: 2002. The RAND researchers estimate that "fewer than one-third of all local organizations have plans that address either scenario, with the exception of OEMs’ and hospitals’ plans for chemical WMD (Weapon of Mass Destruction) incidents… In contrast to local planning, a significantly larger fraction of state organizations have plans (one-half to three-quarters) for these incidents." Return to text.
5 Henry Kelly, et al., Training Technology against Terror, Federation of American Scientists, 9 Sept. 2002: 9. Return to text.
6 2002 NASRO School Resource Officer Survey, National Association of School Resource Officers, 25 Sept. 2002, 7 Oct. 2002 http://www.nasro.org/2002NASROsurvey.pdf. Return to text.
7 The U.S. General Accounting Office has released several documents related to the issue of intergovernmental coordination and cooperation. See, for example, the following documents: GAO-02-1011T, GAO-02-893T, GAO-02-550T, GAO-02-549T, GAO-02-548T, GAO-02-547T, and GAO-02-160T. These are available at the GAO Web site http://www.gao.gov. Return to text.
8 U.S. Census Bureau, 2002 Census of Governments, "Government Units in 2002," July 2002, 27 Sept. 2002 http://www.census.gov/govs/cog/2002COGprelim_report.pdf. Return to text.
9 Patrick Lenain, Marcos Bonturi and Vincent Koen, "Security and the economy: Transportation," OECD Observer, 28 June 2002, 8 August 2002 http://www.oecdobserver.org/news/fullstory.php/aid/699/Security_and_ the_economy:_Transportation.html. Return to text.
10 Lloyd Dixon, "The Impact of September 11 on the Travel and Tourism Industry in California," in K. Jack Riley and Mark Hanson (eds.), The Implications of the September 11 Terrorist Attacks for California (Santa Monica, CA: RAND, 2002): 4. Return to text.
11 Jane Weaver, "Backyard Ads Push In-state Tourism," MSNBC 7 July 2002, 8 July 2002, http://www.msnbc.com/news/775748.asp. Return to text.
12 Bill Wolfe, "Terror attacks, recession nick Louisville-area hotel occupancy," The Courier-Journal 19 Feb. 2002 http://www.courier-journal.com. Return to text.
13 These percentages were derived by the author using 2000 data. The export data are from the U.S. Census Bureau, Foreign Trade Division as prepared by MISER. Downloaded 26 July 2002 from http://www1.miser.umass.edu/trade/strank.html. The gross state product data are from the Bureau of Economic Analysis, U.S. Department of Commerce. Downloaded 26 July 2002 from http://www.bea.doc.gov/bea/regional/gsp/. Return to text.
14 Lenain, Bonturi, and Koen. Return to text.
15 U.S. Office of Homeland Security 23. Return to text.
16 Bill Keller, "Nuclear Nightmares," New York Times Magazine 26 May 2002: 28. Return to text.
17 U.S. Office of Homeland Security 23. Return to text.
18 Keller 28. Return to text.
19 U.S. General Accounting Office, Port Security, GAO-02-993T, 5 Aug. 2002: 3. Return to text.
20 Michael E. O’Hanlon, et al., Protecting the American Homeland: A Preliminary Analysis (Washington: Brookings Institution, 2002): 7. Downloaded 30 April 2002 http://www.brook.edu/dybdocroot/fp/projects/homeland/fullhomeland.pdf. Return to text.
21 Lenain. Also, refer to OECD, "Economic Consequences of Terrorism." Return to text.
22 President George W. Bush, The White House Web site, Securing the Homeland, Strengthening the Nation 13 Aug. 2002 http://www.whitehouse.gov/homeland/homeland_security_book.pdf. Return to text.
23 President Bush 17. Return to text.
24 Belinda I. Reyes, et al., "Has Increased Border Enforcement Reduced Unauthorized Immigration?," Research Brief, 61 (2002), Public Policy Institute of California, San Francisco, 15 Aug. 2002 http://www.ppic.org/publications/PPIC162/PPIC162RB.pdf. Their research into the enhanced border enforcement strategy implemented from 1994 to 2001 finds "no evidence that the border enforcement build-up has substantially reduced unauthorized immigration." In fact, due to the increased cost and difficulty of getting back across the border into Mexico, this policy might have had the paradoxical effect of increasing the number of illegal immigrants living in the United States. Return to text.
25 The Immigration and Naturalization Service estimates the illegal immigrant population at around 5 million persons. Immigration and Naturalization Service Web site, "Estimates, Fiscal Year 1999," 14 Aug. 2002, http://www.ins.usdoj.gov/graphics/aboutins/statistics/Est99.pdf. Return to text.
26 Reyes, et al. Return to text.
27 The Gallup Organization Web site, Jeffrey M. Jones, "Effects of Sept. 11 on Immigration Attitudes Fading, but Still Evident," 8 Aug. 2002, 13 Aug. 2002 http://www.gallup.com/poll/releases/pr020808.asp. Return to text.
28 Jones. Return to text.
29 Jones. Return to text.
30 The Federal Reserve Board, "Remarks by Chairman Alan Greenspan before the Independent Community Bankers of America," 13 March 2002, 13 Aug. 2002 http://www.federalreserve.gov/boarddocs/speeches/2002/20020313/default.htm. Return to text.
31 Abraham T. Mosisa, "The Role of Foreign-born Workers in the U.S. Economy," Monthly Labor Review May 2002: 3. Return to text.
32 The Federal Reserve Board. Return to text.
33 James Steinberg, "Counterterrorism," Brookings Review Summer 2002: 5. Return to text.
34 "President Bush Delivers Graduation Speech at West Point," White House Web site, 1 June 2002, 22 July 2002 http://www.whitehouse.gov/news/releases/2002/06/20020601-3.html. Return to text.
35 Office of the Secretary of Defense, Office of Economic Adjustment, "Base Realignment and Closure, FY 2002 Update," 23 Feb. 2002, 23 Aug. 2002 http://www.dcuc.org/Meetings/2002%20Defense%20Issues/DefCreditUnionCouncil%20BRAC%20Presentation.ppt. Return to text.
36 Office of the Secretary of Defense. Return to text.
37 Kentucky Commission on Military Affairs Web site, 25 July 2002 http://www.state.ky.us/agencies/kcma/impact/frommenu.htm. Return to text.
38 James V. Hansen, "New Standards for Base Closures Favor Hill," The Salt Lake Tribune, 20 Jan. 2002, 25 July 2002 http://www.sltrib.com/2002/jan/01202002/commenta/168994.htm. Return to text.
39 Georgia Department of Community Affairs Web site, 23 Aug. 2002, http://www.dca.state.ga.us/publications/hinesville1-13.pdf. Return to text.
40 John Spratt and Hugh Brady, "National Security vs. Social Security," Brookings Review Summer 2002: 9. Return to text.
41 Michael J. Mandel, et al., "The Cost of Fighting Terrorism," Business Week 16 Sept. 2002: 27. Return to text.
42 Bob Davis, "Bush Economic Aide Says Cost of Iraq War May Top $100 Billion," Wall Street Journal 16 Sept. 2002: A1. Return to text.
43 Anna Bernasek, "The Friction Economy," Fortune 18 Feb. 2002, 21 Feb. 2002 http://www.fortune.com. Return to text.
44 Bernasek. Return to text.
45 OECD, "Economic Consequences of Terrorism." Return to text.
46 Mandel, "The Cost of Fighting Terrorism." Also see John Schwartz, "Year After 9/11, Cyberspace Door Is Still Ajar," New York Times 9 Sept. 2002. Return to text.
47 Securing the Homeland, Strengthening the Nation. Return to text.
48 Spencer E. Ante, et al., "High Tech Is Starting to Kick In," Business Week 16 Sept. 2002: 30. Return to text.
49 This total includes federal, state, and local government expenditures for primary, secondary, and higher education. Return to text.
50 Congressional Budget Office, The Budget and Economic Outlook: An Update, August 2002, 29 Aug. 02 ftp://ftp.cbo.gov/37xx/doc3735/EntireReport.pdf. Return to text.
51 National Conference of State Legislatures, "State Budget and Tax Actions 2002," 24 July 2002, 27 Aug. 2002 http://www.ncsl.org/programs/fiscal/presbta02.htm. Return to text.
52 Michael Pagano and Chris Hoene, National League of Cities, "Cities Forecast Bleak Futures for their Budgets," 19 Aug. 2002, 23 Aug. 2002 http://www.nlc.org/. Return to text.
53 Pagano and Hoene. Return to text.
54 Author’s calculation using U.S. Census Bureau data available at http://www.census.gov/govs/estimate/9900us.html. Return to text.
55 National Governors Association and National Association of State Budget Officers, The Fiscal Survey of States, May 2002, 27 Aug. 2002 http://www.nasbo.org/Publications/fiscsurv/may2002fiscalsurvey.pdf. Return to text.
56 State Budgets Under Stress, Kaiser Family Foundation Web site, 30 July 2002, 29 Aug. 2002 http://www.kff.org/content/2002/20020730/statbudupdate73002.pdf. Return to text.
57 Donald J. Boyd, "The Future of State Fiscal Conditions: Fiscal Boom, Fiscal Bust, Then What?," Spectrum Spring 2002: 8. Return to text.
58 See, for example, "The Growing Role of the Stock Market in Federal Receipts," Summary, Mid-Session Review, Budget of the United States Government, Fiscal Year 2003, Office of Management and Budget, 15 July 2002, 5 Sept. 2002 http://www.whitehouse.gov/omb/budget/fy2003/msr02.html. Return to text.
59 Russell Gold and Robert Gavin, "Fiscal Crises Force States to Endure Painful Choices," Wall Street Journal 7 Oct. 2002. Return to text.
60 These percentages were derived by the author using data from the U.S. Census Bureau, 2 Feb. 2002 http://www.census.gov/govs/estimate/99stlss1.xls> and <http://…/99stlss2.xls. Return to text.
61 Jason White, "Govs Struggle to Contain Healthcare Costs," 17 July 2002, 18 July 2002 http://www.stateline.org/story.do?storyId=249171. Return to text.
62 C. Eugene Steuerle, untitled speech, Kentucky Long-Term Policy Research Center Annual Conference, "Challenge for the Next Century," Covington, Kentucky, 14 Nov. 2000. Return to text.
63 Citizen Corps Web site http://www.citizencorps.gov/. Return to text.
64 "Independent Sector Survey Measures the Everyday Generosity of Americans," Independent Sector Web Site, 4 Nov. 2001, 7 Oct. 2002 http://www.independentsector.org/media/GV01PR.html. Return to text.
65 This is based on a sample of about 867 adults. The survey was conducted by the University of Kentucky Survey Research Center. Return to text.
66 For example, see Robert D. Putnam, "The Prosperous Community: Social Capital and Public Life," The American Prospect Spring 1993. Also, Jay Braatz and Robert D. Putnam, "Community-Based Social Capital and Educational Performance: Exploring New Evidence," unpublished draft, 1998. Return to text.
67 Jeffrey Berry, Kent Portney, and Ken Thomson, The Rebirth of Urban Democracy (Washington: Brookings Institution, 1993). Return to text.
68 See Ichiro Kawachi and Bruce P. Kennedy, "Long Live Community: Social Capital as Public Health," The American Prospect Nov.-Dec. 1997. Also, Carolyn R. Shaffer, Kristen Anundsen, & M. Scott Peck, Creating Community Anywhere: Finding Support and Connection in a Fragmented World (New York: Perigree, 1993). Return to text.
69 Robert Putnam, Bowling Alone: The Collapse and Revival of American Community (New York, Simon & Schuster: 2000): 287. Return to text.