Ignoring Human Nature Once Again
Tom Sgouros’s message must be mellifluous to public-sector ears. Everything’s cause and effect (no poor decisions on officials’ part), and vaguely unseemly of the citizens who initiated the latter.
The story, in summary, is that all was demographically golden in the world back in the ’50s, until people started moving from Rhode Island’s cities to join the “rubes” in the “sticks.” Property values decreased in the cities, while it increased in the suburbs, and the latter expanded to accommodate the “demands” of citizens for city-quality public services. Urban governments are unfairly maligned for their deficit budgets, and suburban governments are unduly proud of their surpluses (or, presumably, were until recently). The next application of pain, however, will come as “high gasoline prices” send folks back to the city, and the trend will reverse.
What makes the piece worth some pondering, though, is the hint of Sgouros’s solution to all this unfairness:
In the meantime, let’s come up with a tax system that doesn’t penalize us when people move.
That Sgouros leaves this dangling is suggestive of an invitation to speculate, but it would be a mistake to slide past a key question: Why shouldn’t municipalities be “penalized” — so to speak — for the exodus of their residents? Isn’t the discomfort a valuable impetus for change in a better direction? Take, for example, some facts that Sgouros cites from Providence:
Providence has only two-thirds the number of people it had in 1950, and a much smaller fraction of the property value, but it has the same number of blocks to police, about the same number of houses to burn, and more students in its schools.
In other words, Providence has been attracting poorer people who have more children. To the extent that its finances are insulated from its actual population, the city has less motivation to change the character of its citizenry. Or approach the matter from the other side:
The other big problem comes when suburban residents start demanding (and/or needing) the same level of services as the cities provide. When people move to the sticks and then demand fire response times comparable to what they’d have in Providence, you have a recipe for very high costs. When crime rates creeping upward make suburban residents demand policing like they’d get in Pawtucket, that’s a problem.
If a suburb faces no consequences for too-rapid expansion, then it has less incentive to preserve its character or to ensure that those moving within its borders can afford to do so. Conversely, if it faces no penalty for driving citizens (or businesses) away, it can indulge in stagnationary policies that lock development and particular classes of people out. The non-penalizing tax system will ensure that the roads stay well kept and well patrolled whether there are fifty or five households per square mile.
Lurking behind these assessments is the dark political reality of human nature: If the leaders of a city, town, or region do not have to consider demographics’ effects on their budgets, then they will be inclined to institute policies that attract residents who most benefit them — which is to say people who will justify requesting more dollars from whomever it is that doles them out and who will vote for candidates who promise to go after those dollars. As the taxing and policing body of government becomes more centralized, and the Gimme Vote more unified within particular districts, the dynamic will become such that those who receive will vote themselves an arm with which to reach into the pockets of those who provide.
Once that game is proven to be the order of things, those on the losing end of the tax-and-spend formula will find a way to extricate themselves.