"Even before realizing that businesses often fail to create the jobs they’ve promised, it’s becoming increasingly clear that growth rarely, if ever, pays for itself."

click to enlarge back02_economics.jpg

With municipalities across America questioning the value of giving enormous tax breaks to expanding companies, one community is completing the sixth study illustrating the true costs and benefits of the prevailing political mantra, "growth is good."

This latest work, backed by Advocates for a Sustainable Albemarle Population, finds that to cover the cost of new roads, schools, water and services with tax revenue, every house sold in Albemarle County must have a $668,761 price tag.

The average price of a residence sold in and around Charlottesville through September? $301,000.

While other communities might have different experiences, if they do the calculations they're likely to discover a similar financial discrepancy between the myth and reality of throwing tax incentives at new or existing companies, promising to create jobs and growth. It's a mantra heard throughout the Richmond region, particularly in Chesterfield County, long the metro area's bedroom community. But even before realizing that businesses often fail to create the jobs they've promised, it's becoming increasingly clear that growth rarely, if ever, pays for itself.

At the same moment Uncle Sam is $16.4 trillion in debt and facing, yet again, the debt ceiling, better than a third of Virginia's entire gross domestic product comes from federal sources. With the commonwealth's endorsing 4-percent budget cuts and the governor decreasing his still-optimistic budget figures, there's no longer anyone to pick up slack in any community's failure to honestly address the cost and benefits of growth.

Researcher Craig Evans shows that the way American growth works today, residential and commercial developers make money by dropping costs on existing taxpayers even as what are known as proffers have moved beyond the typical school- and road-property donations toward some public construction costs. Albemarle taxpayers face a $50 million tab to finance future water needs and one community, Crozet, seeks a new $15 million school after developers threw up hundreds of houses. Those new dwellings, furthermore, are causing strains on Route 250 because it's the primary road into Charlottesville's job center. It's likely that increased demand — meaning new motorists from the multiple housing developments — will require the two-lane highway to become a four-lane highway, which will not only lead to more taxpayer-funded infrastructure, but also encourage even more future development.

Trying to build a community's way out of congestion, as the Commission on the Future of Transportation in Virginia has reported, enables more development, which leads to worse congestion. "It's a futile exercise," the commission said more than a decade ago. And it holds true today.

But the notion that growth is not only inevitable, but good for a community, dominates local governments across the state, and usually is accepted without question. Albemarle County and Charlottesville commissioned a $150,000 study during the summer to determine what industries should be enticed to move to the area.

Now the pressure mounts to provide incentives to lure new businesses, despite the growing evidence that this rarely, if ever, pays off. Many American communities that provided past tax benefits to employers are discovering that projected jobs rarely materialize, and the costs of luring those companies is too high. Investigative journalists Donald Bartlett and James Steele first reported on this phenomenon, dubbed "corporate welfare," in Time magazine in 1998. A December series in The New York Times reaffirmed that corporate welfare is still alive and well.

Many of the jobs that do show up when new companies move in are filled by out-of-towners who relocate, The New York Times found, which requires new housing, schools, streets, water and other public services.

The Albemarle studies are being used to drive discussion toward what some are calling "optimum sustainable population." In other words, "How populated do we want our area's 736 square miles to be?" Albemarle County and Charlottesville certainly aren't alone in neglecting to include this ultimate goal in previous comprehensive planning processes. It's likely your community also believes growth is good without considering even the fiscal issues growth creates — not to mention any economic, social or environmental concerns.

In the previous studies commissioned by Albemarle, researchers found that the county's 144,000 residents already teeter beyond nature's capacity for human habitation. To support Albemarle County and Charlottesville's current population without importing clean air, water and food from other locations, the study indicates, the county would physically need almost four times its current land mass.

Of course, nature doesn't confine herself to human political jurisdictions, but for every Charlottesville, there are population centers around Richmond, Washington, Norfolk, New York and Chicago — each of which is less likely to live and grow within its monetary and environmental means. Albemarle, indeed, filters significant amounts of clean water and air through 486 square miles of forest and produces tons of human food on 166 square miles of crop and pasture land.

No doubt, growth proponents will argue with researcher Evans' fiscal analyses, but even if the economic and ecological models fail to cover every eventuality, the 66-percent discrepancy between the amount of tax revenue generated and the costs of services needed to maintain a healthy population, or the 370-percent difference between land mass and population, should cause even the most dedicated pro-development politician to pause. S


Randy Salzman is a former journalism teacher at Virginia Union University and a transportation researcher who lives in Charlottesville.

Opinions expressed on the Back Page are those of the writer and not necessarily those of Style Weekly.




Showing 1-1 of 1

Add a comment

Subscribe to this thread:
Showing 1-1 of 1

Add a comment

More by Randy Salzman

Connect with Style Weekly

Most Popular Stories

Copyright © 2021 Style Weekly
Richmond's alternative for news, arts, culture and opinion
All rights reserved
Powered by Foundation