Do state income taxes breed strip malls?
That's among the fascinating conclusions of this essay, comparing New England with the Midwest:
Local Taxation. The manner in which local taxes were levied in Connecticut is very different than in Ohio. In Ohio, income tax (charged where you work, not live) funds much of the local revenue for cities and townships, with property taxes going to fund school districts which are operated as separate governmental subdivisions. In Connecticut, property taxes support most of the local level spending, so property value is king. In a majority (although not all) of the communities the school district is only semi-autonomous and is funded directly as a line item in the municipal budget.The impact of this is actually quite dramatic. In Ohio it pays to cram as many jobs as you can into your community. Many communities welcome every office, strip mall and warehouse they can get. In Connecticut, many people tend to react the opposite way-they don’t want these uses. They bring traffic and pollution, which can bring property values down (at least that’s the fear), thereby weakening the municipal coffers. Exclusivity pays when keeping out more intense uses to preserve the bucolic countryside atmosphere leads to wealthy residents building large estates that pay lots of taxes. There is likewise much less of an incentive for local leaders to welcome the newest strip mall into their community, especially when they need to provide more police services and bigger roads. In Ohio, almost every highway exit, even the ones in high-end communities, has several commercial establishments near them. In Connecticut, many exit onto leafy drives that run to quiet residential areas.
The whole thing has a lot to think about.
| Posted at 11:46 AM | Permalink |
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Comments (5)
Uh HUH. Obviously, this writer has never been to Texas. We've never had a state income tax, and Mike Royko called Dallas "a shopping mall Shangri-La" for a reason.
Posted by Texas Triffid Ranch | November 13, 2012 12:26 PM
The per capita tax burden in Connecticut is about twice that of Ohio. That will keep out the riffraff. More seriously, I think the more apt comparison might be between Connecticut and Shaker Heights. Few natives of Shaker Heights self identify as hailing from Cleveland.
Posted by Newleaf | November 13, 2012 1:30 PM
Newleaf is spot on about the Shaker Heights comment. NE Ohio was once part of Conn (known as the "western reserve"). Greater Cleveland was planned by New Englanders and is more like an east coast town.
Columbus is more a "sunbelt City" (without the sun) as it has a young and transit population due in large part to the 125,000+ college students in the area.
Cincinnati is more of a southern town with heavy German influence.
In Ohio you first pay taxes where you work THEN where you live. If you lived in Shaker Hts and worked in Cleveland, you would pay 3.75% just in local income tax. Shaker also has one of the highest real property taxes in the country at $3k per $100,000 of value. Very few businesses and retail in Shaker as it is an inner ring suburb streetcar community.
Oregon needs a more balanced tax stream to pay for public services. Also need to due a better job more efficiently spending current taxpayer money.
Posted by Brian | November 13, 2012 2:23 PM
I'd disagree *almost* completely as I've read the complete opposite theory.
Cities that rely heavily on a sales taxes tend to zone far more retail than is needed by their planning departments. More retail sales means more revenue into the coffers and you can definitely notice this when travelling outside of Oregon.
Also, a strip mall tends to be focused more on retail sales than say pure office spaces. But I'll argue there's very little difference between an office park and a strip mall. Maybe a few more trees.
Posted by ws | November 13, 2012 7:05 PM
Throw it all out the window.
Oregon has proven it's just simply incompetent in how to raise revenue, without by simply raising the percentage rate.
Local governments primarily are funded by property taxes - but then those same local governments, in an attempt to "raise revenue", slap LIDs and other incentives to encourage certain types of growth (transit-oriented developments, gentrification). So while the tax revenue - in dollars - rises, the actual money given back to the governments decline as the tax on the increased value is locked into LID related investments only. Schools, counties, other districts - all lose money, despite the need to provide increasing services to these developments. Hmmmm... Not to mention the number of developments that are owned/operated by governments and thus tax-exempt...
Then Oregon (the state) is primarily funded by the income tax. That's fine - except the way to increase revenue is to raise incomes. NOT raise the tax rate. About the only way Oregon seems to win-win here is by increasing government jobs, which means the state has to collect taxes, to pay out on incomes and recollect the taxes back...it's basically a cycle of diminishing returns...
Posted by Erik H. | November 13, 2012 10:57 PM