3/16/2015

#99 Special Interests and Growth (2004)

All Rights Reserved © 2004 Thomas W. Day

Every time an area experiences an economic boom, property taxes rise.  Why is that?  Isn’t it  logical to expect the growth to pay for itself?  If the growth is really a good thing for everyone who lives in an area, you would think that would be reflected in lower taxes, not higher.  The addition of buildings to undeveloped land increases the value of the land and should return higher income to the county and state.  Farm land earns a lower tax rate than developed land.  But it never seems to work this way.  Why?  Maybe it’s because disguised special interests are calling the shots and diverting the costs of growth to people who shouldn’t have to pay it.

In the case of public funds and area growth, special interests abound.  Everyone who gains from an increase in the tax base is a special interest.  The obvious special interests, and rightly so, are developers, contractors, and real estate salespeople.  This group has a lot to gain from conning the public into paying for their investments. They would love to spread the cost of schools, roads, utilities, and other public services over the entire taxpaying population.  If those costs were borne by the people who reap the most benefit, the cost of housing would limit their profit margins and slow growth considerably.  They can always be counted on to contribute funding for a bond issue’s advertising. 

But these easy targets aren’t the only people who gain disproportionately from growth.  The two elements of greed, power and money, can help identify those who will gain from growth and, even, overpopulation.  Government officials can expect open paths to promotion, increased income, and larger “empires” through population growth.  It’s pretty obvious that a mayor of a 10,000 population town is going to make a lot less than Randy ("I can't remember who my date was") Kelly.  Kelly probably has more bodyguards than many towns have employees.  Empires are built on employees.  Salaries are based on the number of people supervised and complexity of the managed facilities.  This may also be where a big part of this exponential cost of growth comes from, too.  Large cities are not as efficient as small cities.  Large cities have more employees per taxpayer, more expense per employee, and some expenses that a small town wouldn’t even consider.  If this is what growth brings, who needs it?

If you expect government officials to present an unbiased opinion of the value of growth to the average citizen, you probably wouldn’t be skeptical of Mike Tyson’s intention toward your daughter.  Growth simply presents too much to gain for people whose income and power is based on taxation and population.  You can’t expect people to resist the temptation to look for only the upside of an issue that will dramatically and positively effect their pocketbooks. 

The rule in solving crime is “follow the money.”  This rule applies to finding the special interests who might commit the crime of destroying a community for the sake of growth.  Using this formula, it is clear that it will be difficult to accept a local newspaper as an unbiased source of information, also.  School system administrators are going to be in line for salary increases relative to the size of the schools they administer, also.  Even the police department may be pro-growth for the same reasons, although the officer on the beat will have to deal with more crime and more corruption, the department administrators will make more money and gain more power. 

When growth is a good thing, the gain is spread around equally and it is in everyone’s interest to promote it.  When growth is a bad thing, the majority of people who are asked to pay for it don’t gain proportionally to their investment; or they lose with no voice in that investment, which is what Amendment I was intended to stop.  When taxes must be raised to subsidize growth, that growth isn’t paying for itself.  The people who are reaping the largest rewards are paying only a small portion of the total investment.  When the growth produces more government jobs, it isn’t really doing the community a favor.  Someone will have to produce something real to pay for those government jobs.  When the major investors in the area don’t live in the area, the lion’s share of the benefits don’t return to the community that has paid for those resources.  Putting profits into national and international corporations’ won’t return a reasonable payback, on a long term basis.  It isn’t selfish to expect a fair return on your tax investment.  If the local government hasn’t done a good job with its funding in the past, nothing about new funding will change the people who spend it.  If you won’t get that return-on-investment, don’t spend the money. 

One way to estimate which side of an issue is not looking out for your best interests is to look at the quality of the flyers you receive.  The better they look, the better that side of the cause is financed, and you know good causes aren’t often well financed.  Money seems to flow downhill, ethically speaking, and grassroots movements don’t get much of it.  The best way to determine where your interests stand is to get involved.  Find out how your money is spent.  Learn to read budgets and force government officials to make those budgets available to taxpayers.  There is no reason why cities and states can’t follow the Clinton administration’s lead in making complete budgets available in electronic format.  That would minimize the cost of publishing these documents and allow the public to assist in analyzing the cost of government.  The more we know, the better we can run our country, cities, and neighborhoods.  If we care, the people who work for us in government will care.  If we don’t, we deserve the government we get.

September 2004

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