What is the future of Iowa's small towns?

Bruce Nesmith is a Founding Member of Strong Towns. He blogs at Holy Mountain, and the following essay is republished from his blog with permission.

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A recent column in the Cedar Rapids Gazette highlighted just how much angst small town residents can have about their community's future. Bill Menner, executive director of the Iowa Rural Development Council, argued that statewide candidates of both parties should put forth "meaningful rural-specific policy initiatives" as they campaign in the state; by "meaningful" he means "targeted policies and investments" addressing "issues that limit [rural Iowa's] ability to grow."

The former Audubon County courthouse in Exira. County population has fallen from 8,559 (1980) to 5,578 (2017). (Source: Jim Roberts)

Most of Iowa developed as a predominantly agricultural economy. In 1890 it was the tenth-largest state in the Union, even without any large cities. (Des Moines' population that year was 50,093; Cedar Rapids had only 18,020.) Our two million residents were spread evenly across the state, with hundreds of small towns serving the surrounding farms with necessities, schools and gathering places.

Changes in agriculture, transportation and commerce put that model away long ago; our farms are now largely corporate or similarly huge operations, and use machinery rather than hired labor. (For more on contemporary farm life, see Russell Arben Fox's "What Do Farmers Want?").

Some small towns have reinvented themselves as bedroom communities, college towns or tourism/recreation centers, but the majority that lack that option have seen population and economic prospects decline. Both the industrial and post-industrial phases of American economic development took place elsewhere.

Iowa has grown slowly since the 2010 census, adding just under 100,000 residents by the Census Bureau's 2017 estimates. Ten urban and suburban counties added 127,943, which means the other 89 counties lost more than 25,000 residents.

Growth is concentrated even within the Census Bureau's metropolitan statistical areas: in the Cedar Rapids MSA, Linn County has gained 13,000 residents so far this decade, while Benton and Jones Counties have seen marginal declines. The ten urban-suburban counties now account for 58.8 percent of the state's population, but have added 74.5 percent of the state's new jobs in this decade, attracted 228 percent of people moving into the state, and account for over half of people aged 25-44. (That "228" is not a misprint. The other 89 counties have a combined net out-migration, so the number of migrants into the core 10 more than doubles that of the whole state. View the table at the end of this blog post for more detailed data.)

Some degree of resentment at these disparate outcomes is understandable, and has received attention as Iowa has shifted politically from purple to red in the 2010s. Donald Trump won easily here in 2016, and Republicans dominate both federal and state offices. Iowa Governor Kim Reynolds refers to small towns as "the real Iowa," while lambasting "far-left liberals in Des Moines and Iowa City." 

(By the way, Governor: Johnson and Polk Counties, which contain Iowa City and Des Moines respectively, together comprise 20 percent of Iowa's population. They have added 70,000 residents since 2010, along with 35.3 percent of the state's job growth, 32.3 percent of the state's GDP, 147.1 percent of people moving into the state, 26.9 percent of college graduates, and 29.3 percent of those with graduate or professional degrees. Without them, Iowa is truly in a world of hurt.)

Downtown Decorah (population 7,918 — down 217 since 2010) is supported by Luther College (Source: Bobak Ha'Eri)

Menner's Gazette column plays to this resentment: 

Federal and state funding flows easily to urban areas, where elected officials and staff know how to maximize their success. Rural places don't have that same capacity and are often left behind. 

He calls for the state to:

[m]easure the disparities in project funding between rural and urban places and put in place remedies to address them.

But if you look for data to confirm the federal and state government's systematic unfairness to small town Iowa, you'll find they don't exist. According to the American Community Survey's census of governments, transfers from the federal and state governments amount to 26 percent of county government revenue, compared to 17 percent for cities, 21.6 percent for special districts, and 51.4 percent for school districts. But those numbers are not broken out by county, town, and city. 

What we can say for sure: The biggest items in the federal budget are Social Security, Medicare and defense. The former goes to individual citizens—mostly elderly people who predominate in small towns and rural areas—so it's not surprising that the 52.1 percent of the state's population that lives in the ten urban-suburban counties receives only 46.9 percent of federal benefits to individuals, and 46.9 percent of federal awards. The biggest item in the state budget is education, which also rises with the population.

The state has not undertaken county consolidation, which has been batted about as long as I've lived in Iowa. That's why we have counties with fewer than 10,000 people that, nevertheless, receive government spending that accrues to (and maybe props up) county seats. Still, it must be hard for rural residents to see the state allocate a paltry $1.3 million to expand broadband access while a single interchange on I-380 north of Cedar Rapids is going to run upwards of $20 million.

The myriad cities that have succeeded in this century often build on three factors: the economic advantages often found among clusters of knowledge workers, social and cultural amenities that come with a dense population, and broad attitudes of tolerance and inclusion. To those we should add: better access in cities to mobile broadband as well as venture capital—as firms in those fields see a greater likelihood of returns on their investments where population is denser.

That's why urban areas are growing and small towns and rural areas are mostly not. It's nothing sinister, and there's no point in being resentful. The young and hip will always command an outsized share of media attention, but we shouldn't let that affect our cold-eyed assessment of what's working for successful places.

Washington (population 7,424 — up 154 since 2010) has restored its historic downtown square (Source: Billwhittaker)

Small towns and rural areas have advantages, too—strong community identity, easy access to natural places, and often compact walkable business districts. Though those advantages are probably not enough to entirely ensure "the survival of Iowa's 900-plus small towns," as Menner advocates.

One of my sons lives and works in Seattle; if he could find a similar job in Decorah, or Clear Lake, or Red Oak, he'd move in a minute. Menner's column suggests some state policies that could build on those advantages: expand the broadband grant program, create a state rural housing initiative, better funding for existing agencies... But there's the rub: all of that costs money. So does education, health care, and public institutions.

The state of Iowa is not building fiscal capacity to make these sorts of public investments possible—quite the opposite, in fact, as the legislature annually delivers substantial tax cuts, and the governor dips into contingency funds to pay the bills.

Menner would like to see someone at the state level designated as rural liaison-advocate. But in a state government run by Republicans elected on the strength of rural and small town votes, there already is that someone: the Governor, an acknowledged fan of "the real Iowa."

Republicans at the state level, however, have decided to play culture war instead, producing bills to defund Planned Parenthood, bar "sanctuary cities" (of which the state has zero), and ban abortions after six weeks (something they're attempting to do just one year after banning abortions after twenty weeks.) None of that helps rural counties get out of the doldrums; nor does it help the cities that are the state's real economic engines compete for talent.

Rural and small town Iowans need to stop voting for policies that help you feel good, and start voting for policies that help you live well.

Some ideas:

1. Support Menner's group's advocacy for more state investment in your community while recognizing that investment is not going to happen without tax revenue. Don't wait for the 1 percent, or urban residents, or the magic of supply-side economics to produce a windfall, but do be willing to pay for the services your community needs. 
2. While you're waiting for the state to act, improve your own capacity and attractiveness: invest in human capital, specifically education and small business development, including libraries and adult education opportunities. 
3. Buy local and avoid national big box chains whenever you possibly can; your money will stay in your community and help it grow. 
4. Take advantage of your assets, be they natural, existing institutions or fortuitous location; as Aaron Brown notes, recreation is a bigger industry now than agriculture or mining.

For more ideas, check out Kaid Benfield and Lee Epstein's "The Death--and Life--of Small Town America," Aaron Brown's "Rise of the Rural Recreation Economy," and Dan Gilmartin and Daniel J. Hurley's "Invest in Talent That Drives Economic Growth."

Even a well-funded state government can't afford to buy everyone a pony, but towns can position themselves to use whatever they can to grow stronger.

(Top photo source: Kevin Schuchmann)

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