Five years ago, Rolf Pendall of the Brookings Institution published a paper entitled "Sprawl Without Growth: The Upstate Paradox." It contained some disturbing statistics: Between 1982 and 1997 425,000 acres of Upstate New York became urbanized (a 30 percent increase) while the population grew by only 2.6 percent. Population density of the built up area fell by 21 percent. Cities and Villages were losing people and businesses to the immediately adjoining Towns. For Central New York (the area around Syracuse and Utica/Rome) the story was much worse: 100,000 acres became urbanized while the population fell by 6,500 -- causing a 32 percent decline in population density. You know from your area travels that this trend has continued for the last 12 years. Mr. Pendall warned that "Continued decentralization of people and jobs away from Upstate New York's cities and villages is undermining the economic health and quality of life of the region."
More disturbing statistics were published in December 2008 by the Tax Foundation. Oneida County was 24th on a list of the counties with the highest property taxes in the nation, when calculated as a percentage of home value. With the exception of three counties, all the others higher up on the list were also from Upstate New York.
Are these statistics coincidence? Unlikely. If Upstate New York's urban population spreads itself over a greater area, it will require more roads, sewers, water lines, and police and fire protection to service itself. That costs money, and requires higher taxes and fees. The higher taxes and fees make it more difficult for businesses to make a profit and for people to make ends meet, encouraging them to move out of Upstate to lower-cost places like the Carolinas. People leaving reduces Upstate's population and population density further, which, in a vicious cycle, leaves fewer people to pay for the increased infrastructure requiring even more taxes and fees. Is it any wonder why our local and state governments seem to find themselves in an ever deepening hole?
Have we learned anything since Mr. Pendall's paper was published? Have our local officials seen the light? Apparently not. A county legislator was recently heard on the radio looking for funding to extend water and sewer lines into rural areas, hoping for "growth." Our water authority -- and certain state legislators and local officials -- are still pushing to extend water lines through Whitestown and Westmoreland to Verona to encourage "growth." A year ago Oneida County gave a sales tax exemption for building materials and supplies to a developer to build a 180 unit apartment complex on undeveloped land in Kirkland supposedly to keep local people in the area (as though someone would move out of the region just to have a new house). If you believe the local daily newspaper, the State constructed the new Route 840 to create a corridor for "growth." Certain local officials still think it is appropriate to place another stop light on 840 to promote "growth."
All of these projects or proposals encourage one thing: the location of people and businesses ever further from the centers of population, which are our city and villages. The development that takes place is not growth, but only an illusion of growth, because the regional population continues to decline. What many assume is growth is really "sprawl" -- exactly the phenomenon that Mr. Pendall warned is undermining the economic health and quality of life of our region.
Unfortunately, it is not only our public officials who have mistaken sprawl for growth. Recently, voters in New Hartford contributed to more sprawl by approving bonding for improvements to the New Hartford Business Park - a privately owned development. The money will be applied toward road construction, public utility improvements, land acquisition, sidewalks, curbs, gutters, landscaping, etc. Under a scheme cooked up by Mohawk Valley EDGE, the Oneida County Industrial Development Agency (OCIDA), the Town of New Hartford and the New Hartford Central School District, payments in lieu of County, School, and Town taxes will not be remitted to those taxing authorities for use in their general budgets, but, instead, will be used to pay off the bonds. Assuming everything goes according to plan, the payments in lieu of taxes will cover the cost of the bonding.
Doesn't this scheme sound like your being able to direct your property taxes into improvement of your own property instead of shouldering your fair share of government costs? Clearly the developer is being given a subsidy by the taxpayers -- including taxpayers outside of New Hartford -- that will encourage development of formerly undeveloped land. Development at this location will require extension of police and fire protection, maintenance of water and sewer lines and roads, and other services, increasing taxpayer and rate payer costs.
Supposedly the development will save jobs at The Hartford Insurance Company, but a close examination of the agreement reveals a commitment to maintain fewer jobs than are presently there, for fewer working hours, and only for a limited period of time. Instead of the manufacturing facilities that were originally promised when the Town first proposed the business park, what is being built now is simply more offices and a hotel -- things that the region already has plenty of.
A recent study ("An Assessment of the Effectiveness and Fiscal Impacts of the Use of Local Development Incentives in the St. Louis Region" by the East-West Gateway Council of Governments) concluded that public financial incentives such as those being used at the New Hartford Business Park primarily act to redistribute spending and taxes. "While distribution effects might yield broader economic benefits when used to redevelop economically distressed communities, when incentives are used in healthy and prosperous communities the regional effect may be to destabilize the fiscal health of neighboring areas."
That, in fact, is what has happened locally. There are plenty of vacancies in the Utica Business Park, but EDGE's marketing of properties in Utica is almost unheard of. While New Hartford may be forgiven for being myopic and acting out of self-interest, the involvement of EDGE and OCIDA, to which Utica taxpayers contribute, is inexcusable. Government rather than the market has picked the "winners" by subsidizing one private development over another. What will happen will be simply more of what we have already seen: people and businesses will move out of the population centers to the newly subsidized area.
In an ironic and fitting twist of fate, The Hartford's old offices are being taken over by one of our local hospitals -- a tax exempt entity. So the Town, County and School District will not only have to wait 15 years before taxes flow to them from the New Hartford Business Park, they will immediately lose taxes on the offices that were left behind. This is the lesson of sprawl.
Sprawl must not be confused with growth. Encouraging sprawl is like rearranging deck chairs on the Titanic -- and will result in the same fate.
[This article was originally published in the March, 2009 "Utica Phoenix."
Be sure to pick up the April, 2009 "Utica Phoenix" to read "Pernicious Pensions" --- Now available in a news rack near you]
13 comments:
The good news? Cost of housing around here is artificially high... thus we can tax the bazookas out of home owners around here for their pitiful 100-year old houses.
Strike, you point to a practice that never seems to end, taxes going into the pockets of so-called developers. Sometimes, though misguided, they are sincere. Often, I suspect their businesses are related to the politicians who grant these outlandish sums. How would one explain to bygone generations that government today has degenerated to handing out cash equivalents to "businessmen" who say they can't make profits without corporate welfare.
Strikeslip, thank you for a well-written review of scholarly work on the subject of sprawl. The impact that sprawl has on the cost of local government is much clearer to me now.
Very interesting however, you continue to forget the disastrous economic consequences of the unregulated, untaxed and illegal casino operating in Verona. The negative impact of this entity is more devastating than any other single issue facing this area. It is a proven fact that casinos drain economies within the "feeder" area -- typically a 50-75 miles radius. This one is particularly egregious because it refuses to contribute to the tax base and has literally put several hundred tax paying entities out of business and many thousands of jobs lost. Not to mention it is a government sanctioned, highly oppressive dictatorship right in our own back yard. It is a true local tragedy.
Anon - If you could point me to any studies that support your conclusions re casinos I would like to read them. That is off topic here, but might make for an interesting post in the future. Please send to my e-mail. Thanks.
Rome is even worse than Utica in this regard. Not only is Rome geographically huge, but much of the land is tax exempt. Add to that the insane increases in school taxes and we are at a point where people in the city are repurchasing their houses in property tax every 15 years.
The entire Griffiss business park is comprised of uses, both private and public, which were checkerboarded from other areas of Rome and Oneida County complete with subsidized tax breaks. Add to the mix over $100 million in taxpayer infrastrucure costs and you have one of the worse "development" examples in the nation.And, talk about, "sprawl!"
Anonymous is a coward too afraid to put more to the post. The casino is LEGAL! It has been since its inception. If it were as anonymous suggested, the casino would not be operating; simple logic dictates that much.
It is highly regulated and taxed, at the federal level. Go back to grammar school where you learn about Indian Tribes and their limited sovereignty. In any case, the land is in trust and exempt from state politics. That's the ONLY reason it has remained in business. Or do you forget the racino in Vernon held 300 jobs hostage until the state reduced its death grip tax hold.
"Swimmy should not revert to name calling under any circumstance.But,to do so with a half a deck(casino dealt), is paticularly distasteful. The Supreme Court has ruled in two cases that the Oneidas are obvligated to pay taxes they currently refuse to pay.The fact that the government will not collect the taxes does not obviate the legal rulings.And, the statement that the casino i exempt from state politics is laughable considering the casino compact is a State agreement negotiated by a political represenattive, the Governor. That too, is illegal since Cuomo did not unclude the legislature.
I think the Supreme Court rulings are clear re the casino, and it is amazing that state officials do nothing. What is not clear is the negative impact on local businesses (excluding the obvious where the OIN buys a gas station directly across the street from a privately held one, and can use its alleged non-tax status to undercut the competition). As I said before, I would like to see any studies that support the conclusions of a negative impact, and have yet to receive any.
Regardless, the debate about the casino may be important, but it is off topic.
The Supreme Court also said that to re-assert their sovereignty the Oneidas would need to put the land into trust. On March 2008, the land was placed into Federal Trust, now it's exempt from state and federal regulation. The Compact is LEGAL! The BIA and the federal courts have said so. I'm not the one playing with a half deck!
I suggest a closer review of the Supreme Court cases, the IRA, the BIA's decisions, and prior treaties that are still in force.
The sales tax issue is still governed by the Supreme Court ruling. The trust tool governs property taxes and that is currently being challanged!
No, actually, with the land in federal trust, it's exempt from state law and regulation. It will be affirmed in court!
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