Tuesday, July 11, 2006

Un "Conventional" Flexibility

It is useful to remember this space originated to make the argument against the twenty year extension of the sales tax. We lost that issue, and I have stated I have no intention of revisiting the issue in the sense of going after repeal. Unlike the first round, which was bullied through under threat of another tax, this last was approved by the voters after a good airing of the issues.

This is not to say a lot of the points we made were not valid. Taylor Publishing took the money and ran. Nice people, I worked for them as a temp, it's just that our bit of freebie could not overcome the underlying economics that eventually forced the company to move. One of our latest grants was to Lone Star Beef, essentially giving them money to do something they were almost certainly going to do anyway.

Now we have a Convention Center proposal that is nothing short of ludicrous. The location suggested ties that proposal to the spending on sports facilities. San Angelo has under-utilized meeting space all over town. If some of it is less than state of the art, say on Wi-Fi or latest Audio Visual presentation equipment, we can upgrade a whole lot of servers and overhead projectors for the price tag on this white elephant.

Mr. Turner provides links to articles well worth the trouble, the Sports Journal piece is a good short one, the Chapin article on “Real Costs and Benefits of Sports Facilities”, is a definitive serious study. Let me cut to the chase as I did during the original debate. The measures of economic impact of visitors, be they for a rodeo or a computer skills seminar are generally suspect.

It doesn't take a great exercise of common sense to know those dollars, however many, will primarily target service industry jobs. A visitor will need a room, food, probably some gas, and will likely shop at some local stores. The jobs creation side of the sales tax repeatedly used the term “high-tech, high pay jobs with a future.” Tourism, be it for business or pleasure results in dollars trickling down to hotel staff, cafe waitstaff, and retail clerks. Some places will at least be locally owned, but other businesses will have economic “leakage”, in that a national hotel or car rental agency sends a fair part of that to corporate headquarters.

Three major leaks in a few days on water mains, and we are already hearing $150 million as a price tag on that little upgrade. At least this time they might remember to put in a valve here and there to let us isolate problem areas during repairs. I mention this latter because state law gives us rather greater latitude in using 4B tax money if such use is approved by the voters.

An example we used during the tax debate was that of Tyler, Texas. Tyler uses the biggest part of its revenue on pay-as-you-go infrastructure improvements. They have improved their airport, built city parks, done flood control, even paved streets with their 4B money. In the course of this plan, they have been able to reduce their property tax rate from 54 cents to a state low of 24 cents.

Going to the Chapin article I mentioned, he addresses the idea that Sports facilities, by bringing out of towners in, shows off a city, encouraging businesses to relocate there. I hold the conclusion as valid for any sort of visitor, not just sports related. “Studies of business and household relocation have found sports facilities to be largely irrelevant, as businesses are usually more interested in factors such as low taxes and a positive business environment...” Imagine that, business actually concerning itself with a major cost of doing business.

I believe we have sufficient evidence that the bribing jobs into town model is not working as advertised. The sales tax can still be used to create a better, primarily lower tax environment that will bring business here. San Angelo has a lot to offer. What we call “rush hour” is light traffic in a lot of cities.

It will require voter approval to change our current use of 4B money, but with that approval we can do things of far greater benefit than what we are doing now. I am not talking about cutting the locally directed sports money, but allowing greater latitude for money we are already collecting. We ask for comment and will be proposing concrete ideas for a reforming referendum on this tax. I really feel a bit guilty here. By effectively opposing the last extension, we may have moved the supporters of the tax to write more restrictive ballot language than was desirable over a twenty year term. I know I can't set a household budget twenty years out, nobody's crystal ball is that good. We really do have some very good people working in government now, we need to give them a little room to work.

No comments:

Post a Comment