Re:Lessons learned from a failing local mall
by bobthepanda on Saturday April 28, 2018 @03:07PM
(#16949008)
Tax rates are generally a reflection of current priorities and not long term obligations.
Cities tend to build and replace infrastructure bit by bit; when first built out, they built infrastructure piecemeal, and as they upgrade to cope with higher populations they also do it piece by piece. So they have to replace things often, but usually only small amounts of infrastructure. To reflect this, tax rates stay at a slightly higher rate.
Suburbs, on the other hand, generally explosively grow in spurts, and put in all the infrastructure in spurts. So for 30 years they don't have to worry about replacing things and have low tax rates, but when you start getting to EOL people start getting higher and higher assessments to pay to replace all this high-quality infrastructure at the same time. This causes people to leave for that newer suburb that hasn't reached that point, which shrinks the tax base of the older suburb, which then has to raise assessments higher, which starts off a deadly tax spiral. On top of that they are often raising taxes to replace infrastructure on a much smaller tax base to begin with since their density is so low.
As a case in point, Nassau County in Long Island had the original suburbs, but now the taxes are so expensive because of all this infrastructure replacement that everybody is leaving. You are starting to see this in a lot of the first-generation suburbs; not only in Long Island, but also in New Jersey, and other infamous examples include places like Ferguson, MO.
Cities tend to build and replace infrastructure bit by bit; when first built out, they built infrastructure piecemeal, and as they upgrade to cope with higher populations they also do it piece by piece. So they have to replace things often, but usually only small amounts of infrastructure. To reflect this, tax rates stay at a slightly higher rate.
Suburbs, on the other hand, generally explosively grow in spurts, and put in all the infrastructure in spurts. So for 30 years they don't have to worry about replacing things and have low tax rates, but when you start getting to EOL people start getting higher and higher assessments to pay to replace all this high-quality infrastructure at the same time. This causes people to leave for that newer suburb that hasn't reached that point, which shrinks the tax base of the older suburb, which then has to raise assessments higher, which starts off a deadly tax spiral. On top of that they are often raising taxes to replace infrastructure on a much smaller tax base to begin with since their density is so low.
As a case in point, Nassau County in Long Island had the original suburbs, but now the taxes are so expensive because of all this infrastructure replacement that everybody is leaving. You are starting to see this in a lot of the first-generation suburbs; not only in Long Island, but also in New Jersey, and other infamous examples include places like Ferguson, MO.