Monday, January 17, 2005

County needs new revenue for growth

By Anne T. Sloan

Three issues centering on growth have come up in articles,
editorials and letters to the editor in The Daily News Journal.

First, do we need more income from taxes or do we need to
re-evaluate our spending. Second, who should do the evaluation.
Third, if new revenue is necessary, who should pay.

In regards to more income from taxes, agreement is difficult because
there is always the argument that there should be some way to cut
spending. However, if you ask people who manage the county's
resources, they will tell you that virtually everything is
underfunded. The same is true for city officials. Over the past
decade, there have been budget cuts at the state level that have
created more demand on local fiscal resources. What do these fiscal
resources pay for? For services. What are the services? Education
usually tops the list, but there is also road repair, traffic
lights, stop signs, keeping rights of way clear, law enforcement,
fire protection, emergency services, and depending on where you
live, garbage removal, solid waste management, etc.

Rutherford County has benefited from this growth as Mr. Mike Baldwin
points out in his Jan. 12 letter. In the 1950s and 1960s,
Murfreesboro had only a handful of restaurants, limited shopping,
seemingly only a dozen doctors, no orthodontist (you had to go to
Nashville), a small hospital, six white and one black K-8 elementary
schools, and one white and one black high school. I also enjoy the
breadth of change that has brought much greater variety and
diversity to the county; but growth that has caused this change has
also created greater demand for services. Many K-6 and K-8 schools,
some with capacity of 1,000 students, hold classes in every
available space, and the schoolyard is often full of portable
classrooms. Middle and high schools are larger and more crowded.

More people mean more students and the need for more facilities,
more staff, more maintenance costs, more resources, more buses, etc.
Growth in the county has put a strain on all emergency services. We
have more crime, necessitating more law enforcement personnel, more
places to incarcerate those who commit crimes, more courtroom space,
more judges, more public defenders. The list is endless.

Growth has both its positive and negative aspects, but there is one
bottom line. It has to be paid for by somebody. If we bring this
down to a personal level, I don't think many people believe the old
adage that "Two can live as cheaply as one." When family size
increases, it means more demand for food, space, clothing,
entertainment, medical treatment, etc. Any family budget manager
will tell you that there are only so many places you can cut and
sometimes there is no alternative to more income. Business people
will tell you the same about starting up or expanding, it costs.
Many fail because of undercapitalization. If you view Murfreesboro
or the county from this perspective ó1963 Murfreesboro with about
13,000 people certainly needed a lot less than the current
75,000-plus. The same can be said of a county that is rapidly
becoming more urban than rural. But growth comes at a cost. Right
now, our growth is undercapitalized.

The second issue is who should evaluate whether to tax or to cut.
Ms. Donna Rowland (R-Murfreesboro) has said that we need to do a
study of cuts and, if we tax, it should have to pass a referendum.
She seems to think the people don't have a say judging by her
"taxation without representation" comment. On this issue the
editorial stance of The Daily News Journal has been very accurate.
The United States is a democratic republic as are state and local
governments. This means we elect people to evaluate the situation,
formulate policy, approve policy, and determine revenue sources. Ms.
Rowland is one of our legislative representatives. She was elected.
Should an independent committee review every spending bill or
revenue bill she votes on? No, that's why she was elected, to do
this for us. The Rutherford County Commission, the county mayor, the
County School Board, and the city mayors and councils are our
elected representatives who are to manage our fiscal resources to
provide needed services. If we don't think they are doing a good
job, we can elect somebody new.

This brings us to the third issue: Who should bear the burden?
Currently, revenue comes from three sources, sales tax, wheel tax
and property tax. Everybody in the county is or at least should be
paying the first two. The third is paid directly by home and
business owners and indirectly by people who lease property. The two
proposals put forth recently are an adequate facilities tax that
places the burden directly on new construction by taxing builders
and developers and an excise tax that would tax the seller by
percentage on any property sold.

Mr. Baldwin's letter labels the adequate facilities tax as singling
out "new people." Actually, it is builders and developers that pay
the tax. If someone contracts with a builder for construction, that
cost will be passed directly on to them. When builders and
developers build "on spec," the cost will be included in the
purchaser's bill much the same way that realty commissions, closing
costs, and points are. This means one group is being singled out;
however, Mr. Baldwin's argument that we have never done this is
false. The Tennessee Hall Income Tax singles out investors who earn
dividends. Property taxes single out people who own property. The
wheel tax singles out people who own cars. If you are on CUD water,
you pay a development fee to pay for growth. If you are a student at
MTSU who has been subject to rising tuition, it is basically a tax
on YOU the user, because the state has chosen to cut services rather
than raise additional revenue.

I don't think that current property and car owners need to continue
to foot the bill for growth by themselves. Our taxes have helped
subsidize developers and builders for a long time. Personally, I am
a little tired of helping these people make money with my
hard-earned income. We need to have one of these new forms of
revenue.

What we might need is a Rutherford County Ethics Panel. Many
individuals serving on the county commission, the city councils and
the planning and zoning boards profit directly from increased
growth. The same is true of some of our legislative delegation. This
conflict of interest is a moral issue and our representatives on
these bodies should recuse themselves from participating in
decisions where they or their family may profit from that decision.

 

Anne T. Sloan is an associate professor of political science at MTSU
and associate dean in the MTSU College of Liberal Arts.
Originally published January 17, 2005