Top Gateway City Budget Priorities for FY22
The Gateway Cites Journal
Building a strong middle class from within has long been at the core of the Gateway City economic development strategy. To execute this play, Gateway Cities must prepare their youth to succeed in the state’s knowledge economy and work to ensure that a large number choose to stay and invest in the communities where they were raised.
As leaders begin the FY 2022 budget process, two critical moves will position Gateway Cities for success.
1. Fully Funding Early College Expansion to Prepare More Youth for Success
Preparing students for the knowledge economy requires strategies to create true pathways through post-secondary studies. These strategies must be carefully monitored to ensure that they continue to deliver strong outcomes, even as educators come and go and the economy twists and turns.
In this vein, MassINC has been working to advance Early College High Schools since Gateway City leaders first identified the model as a promising practice in 2013. Today, most Gateway Cities have at least one Early College program, and they rigorously track high school graduates as they transition to post-secondary studies at both public and private institutions.
All signs indicate these students are thriving. Buoyed by this success, Gateway City Early College programs aspire to serve many more students who could benefit from the opportunity to accelerate their learning. The state’s Department of Higher Education (DHE) is wholeheartedly behind expansion. Recognizing that higher education is a major contributor to inequality as currently structured, DHE sees Early College as a primary strategy to close large gaps in post-secondary completion between low-income students and their peers.
In 2016, the state’s boards of higher education and elementary and secondary education embraced a goal of serving 16,000 students annually through Early College. Four years later, we are less than one-quarter of the way toward this target.
Lack of sustainable funding is the primary barrier. DHE estimates the Commonwealth Dual-Enrollment Program (CDEP), the line item providing the major source of funding for Early College, will require a $6.4 million appropriation in FY22 to support planned expansion. This relatively modest sum is make-or-break for both the Gateway City growth formula and the state’s larger effort to counter growing socioeconomic divides.
2. Lifting the Cap on HDIP to Help Gateway Cities Retain Successful Residents
With Early College operating at scale, thousands of Gateway City students will complete post-secondary degrees and land jobs with good pay. This will allow more of them to live in whichever community they choose. Gateway Cities have difficulty retaining these professionals because they lack attractive apartments. In the few instances where they have been able to create modern living opportunities, the new units lease up quickly. However, Gateway City real estate markets remain relatively weak, which makes it extremely difficult to finance most market-rate urban infill and adaptive reuse projects.
Much like Early College, Massachusetts has devised an effective solution to this problem. The Housing Development Incentive Program (HDIP) has led to the construction of thousands of new housing units in Gateway Cities that wouldn’t have been built without this tool. The program has demonstrated so much success that the Baker Administration’s 2020 economic development bill called for tripling the annual cap from $10 to $30 million. The House version of the economic development package embraced the Governor’s figure, while the Senate proposal brought the program up to $15 million. However, the final bill that emerged from conference committee earlier this month provided no increase.This was devastating news for developers trying to keep projects alive in the COVID recession. Many of these developers spent years of effort and significant money to advance these concepts. Without HDIP, they will be forced to abandon their plans.
Gateway City leaders will have acute recovery needs and other growth strategies to consider as they establish FY 2022 budget priorities. However, funding Early College expansion and increasing HDIP should figure prominently in their plans. The pandemic has forced many students to defer college, just as it has sidetracked many developers committed to investing in Gateway Cities. These highly effective and complementary programs are critical to immediate economic recovery in Gateway City markets as well as longer-term efforts to ensure that these communities can perform their important functions as sustainable and economically integrated regional cities.