Thursday, January 10, 2008

Development Idea

Alderman Helding had this to say in a recent post on this site:

"I am not saying the uptown artist plan is perfect or the only answer. It is, however, a plan. It is an attempt to make things better. I would love to talk with anyone about an alternative or a plan that could be tried in another area. I am especially interested in ideas that go beyond "add more cops" and get into how we can make the area better instead of just dealing with the fact it is bad."

OK, I will take a shot at this. For the sake of this discussion, I will exclude the "add more cops" solution, though crime and or the perception of danger can devastate neighborhoods. Leaving aside beefed up law enforcement, I think the answer is economic development. As I see it, there are but two ways that government can stimulate economic development. The first way is to provide subsidies, tax breaks, or other advantages on some members of the community, say artists. The second way would be to provide stimulus to all members of society simultaneously in the form of tax breaks or other advantages, allowing all to keep more of their own money and make their own decisions.

It is easier to make a quick splash the first way. It probably is not too difficult to round up a million bucks or so and get something done. Politicians can then point to this million dollar building and say "see what we have done for you." And this may well help them get reelected. But the downside is that it makes smaller, seemingly inconsequential developments less likely, because those would be developers are also paying for the splashy new building and have less money to spend on their own projects.

The second way is far less sexy. Even if people have more freedom and more money after taxes, most will not have the resources to build a fancy million dollar building. But they just might fix their roof or repave their driveway or paint the garage. The problem is that a tax reducing politician can not easily point to the freshly painted garage and say "see what I did for you."

Now I have written about this before, but it would be a wonderful experiment to allow people in certain wards, or better yet, all the people in Racine, to make improvements to their properties that would not be subject to tax increases for some specified number of years. So say you add a deck to the back of your house that increases the value of your property by $10,000. Your house would be taxed as though the improvement never happened, say, for the next five years.

Unfortunately, this idea may well be illegal. I am looking into this and would hope you might as well Alderman Helding. There is something called the uniformity clause in the Wisconsin Constitution that calls for uniformity in property tax rates, though there may be exceptions permitted.

So we have uniformity in tax rates and I have to admit this sounds fair. But we most certainly do not have uniformity when it comes to cash or other advantages that are handed out to politically savvy developers. They get the handouts, you don't.

So perhaps the city of Racine could try such a program while offering the best legal justification that in house counsel is able to muster. The worst that can happen is someone challenges it and it gets shot down in court. The best that can happen is that the city would have at its disposal a development tool that might actually spur private sector development that can improve our neighborhoods.

11 comments:

colt said...

That is a very good idea!

Greg Helding said...

I will be looking into this idea and it's legality. I will let you know what I come up with.

Denis Navratil said...

Greg, excellent, a good place to start is with Caledonia Unplugged's suggestion on a recent post called "Conversation with Mayor Becker." Calunp referenced a few Wisconsin Supreme Court cases that may be applicable. I could not get to them via my computer, nor could the librarian at the library. But the librarian suggested a trip to the county law library on the 8th floor at the courthouse. The county employee was unable to help me, so I was on my own. I found one case in something called Callahan Wis Report, volume 92, page 125-132. At this point I think I am in well over my head because the case certainly has nothing to do with what I am proposing but rather with a tax exemption pertaining to leased equipment in a non profit hospital. But there is some intersting stuff in there like "tax classification which has reasonable relation to legitimate purpose of government is permissible." Now if I understand this properly, (a big if) I would think that stimulating development through tax breaks on development could arguably be considered a "legitimate purpose of government," especially since government can do the exact same thing for favored developers through TIFs. The case also states that the "Unconstitutionality of act must be demonstated beyond a reasonable doubt." I take that to mean that the burden of proving unconstitutionality would fall on the person or business that wants to fight this in court.

Of course I could be completely wrong. I suppose the person to ask would be city attorney Webber.

B said...

WI's industry was built on its strong agricultural sector. It seems we have abandoned agriculture all together. We live in a food desert as most of our food comes from far away places..Garlic from China? in WI?.. my proposal would have a great economic impact on Racine.

As an example take an average of $50/wk spent on food each.. times 90,000 people.. that's $4.5 million dollars a week that we send out to California, China, South Africa, Chile... The majority of the total we pay does not go toward farm labor, it goes toward transport and chemical growing additives. So we send our money out of state..
Now imagine we capture just 20 percent of this money, every week, during the growing season in WI... you do the math.
That is true economic stimulus...and it's been done in other places.. Waterloo IA for one...
Sounds a bit far out, like some sort of agrarian movement..but everyone eats, or else...
The problem with the proposed tax breaks is that the people that would receive the most back, because they earn the most, already have the money they need for necessities and a few luxuries.. more money in these pockets would probably go to the bank/investments. Tax breaks to the poor would be spent immediately as they usually have a list of needs that gets put aside as the weeks pass, in hopes of saving a bit with time, to satisfy those needs.

B said...

I should add to this previous comment that I failed to include the middle class in my assessment of tax breaks... there have been computations that estimate the total amount of money returned to the public and what percentages of the totals went to which income strata. Does anyone know where to look this up?

Anonymous said...

There is no free lunch...sorry...for the poor...

Pariah Jeep said...

I just posted this under "Conversation with Mayor Becker I" but since that thread is old no one will see it. I'll repost it here so maybe someone will read it.

Alderman Helding -

As I noted in the post immediately afterward, I was anon 6:08

First of all, this statement says much:

"For the most part, the money designated for this artist's plan cannot be spent on police officers.

Is that Racine's decision or some funding agency that Racine can't control? I accept the fact that some money might be available from grants from other sources (State or Federal) for certain projects, however, sometimes I hear these arguments and it is actually the municipality that has chosen a budget then falls back on "we don't have the money for this or that".

The whole process of city planning and development - at the city level - is usually a ridiculous waste of money but consultants and others get lots of cash. I am not saying that these projects are not well-intentioned, but I have seen too many multi-million dollar projects run by people who could not effectively collect bids for a siding job on their own home.

"These efforts seek to create a place where we do not need as many police."

This was an absurd statement. So you want to pretend that crimes like burglary, assault, etc. don't happen or are less frequent in nice neighborhoods? An important part of police patrols is to provide visiblity and deter crime, not just clean up messes.

You want to bring business here and help things grow. Great. Try bringing in a company for a visit and respond to their question of "hey, these streets still have snow and ice on them - when was the last storm" with "last week BUT we are spending money to tear down buildings and do all sorts of special things". Try responding to their questions about crime and what they, their families and employees will have to deal with. Respond to their questions about the schools and their problems.

Police. Fire. Schools. Services like plowing and salting on streets besides the four laners. THIS is what people with companies and investment dollars are looking for. If money is only available for the other things then you folks at the City level need to FIND a way to pay for Police, fire, schools and real services.

As I said before, the problems with the schools is a direct result of the crime problem in Racine. You can spend money on a fancy website, you can have game show host "economic developers" parading around the country and world "marketing" Racine, you can spend all you want on rain gardens, solar panels, whatever - but in the end, the fundamentals need to improve or this beautiful area will continue to deteriorate.

Anonymous said...

Anonymous Pariah Jeep said...

I just posted this under "Conversation with Mayor Becker I" but since that thread is old no one will see it. I'll repost it here so maybe someone will read it.
--------------------------------

The poor are to blame...blah blah blah...

The good people are good - bad people bad...blah blah blah...

Need police and an army to take bad people away...blah blah blah...

Right wing rhetoric...

Caledonication said...

Turd alert:

The poor are to blame...blah blah blah...

The good people are good - bad people bad...blah blah blah...

Need police and an army to take bad people away...blah blah blah...

Right wing rhetoric...


And stop using up all my blah-blah-blahs, anon.

concrete katie said...

At the face to face Ivanhoe social gathering on Thursday night, Jack Kemp's name came up. As I recall, Jack Kemp had a major influence in bringing back the area just west of the Loop in Chicago. His initiatives inspired the city planners and forward thinking people at DePaul University to encourage rebuilding and new building via incentives. The City, the Art Institute, DePaul University, Roosevelt University, business leaders, Richard Daley and his advisors got on board. Instead of privatizing the lakefront, the lakefront remained public. The West Loop was the focus and came back as an extension of the Loop. The South Loop then came back as a new residential area as well as dining area. It kept reaching out into the existing neighborhoods and expanded both west and south to include a rebirth of the area around the Madhouse (now United Center) and then all the way to Daley's beloved Bridgeport. In so doing the health of Chicago defies the plight of so many northern cities.

Urban Pioneer said...

Keep in mind Katie those Enterprise Zones, Jack Kemp proposed, and adopted by GHW Bush as part of the "Points of Light". program. The change of the welfare entitlement programs, (that Clinton was dragged into), had a big impact on the housing around the near Loop area. The elimination of Cabrini Green, and the other Hi rise, low income housing South of the city. Moving away and thinning out the riff raff with increased police attention, and truth in sentencing had a huge impact on Chicago, too. The same thing is happening here in Racine. I do hope we ensure the Teen Night club doesn't become our Cabrini Green!!!
But great point you made about Kemp.