By. Neil Williamson, President
This morning’s Daily Progress included an article outlining a report written by Craig Evans considering the fiscal costs and benefits of growth. This report is underwritten by a local population control advocacy group, Advocates for a Sustainable Albemarle Population (ASAP). The Free Enterprise Forum was contacted by the paper and asked to provide comment. Brian Wheeler quotes us accurately in the well written article. Below is the entirety of our statement on the issue of this troubled “report”.
The Free Enterprise Forum believes the Evans report while seemingly accurate in its limited financial analysis fails to recognize the indirect, but calculable, economic benefits of population expansion. The Free Enterprise Forum is concerned the “Counting the Costs and Benefits of Growth Analysis” report by Craig Evans is flawed in design and unfairly prejudiced in its analysis and conclusions.
Much of the Evans report reads significantly more like a political manifesto rather than an academic thesis. Using such terms as “Race to the Bottom” and describing developers as “Speculative Enterprises” do not add to the academic credibility of the report and fails to recognize developers as the very businesses who take the financial risk to bring the community’s comprehensive plan to life.
Taken at face value, the Evans report indicates that the County and City lose roughly $.25 for every dollar collected in residential tax revenue. In FY2011, the City posted a $3.8 Million dollar surplus. How is that possible?
According to NBC29, “The [FY2011] surplus came from a couple of different places. First, the city saved money during the last fiscal year when expenses came in $2.9 million under budget. On top of that, the city collected $900,000 more revenue than expected in 2012 – largely from a spike in sales, meals and lodging taxes”. Only by recognizing the indirect benefit of and important symbiotic relationship between population and revenue producing commercial activities can you reconcile this anomaly.
The Evans report fails to calculate the considerable value of population to economic vitality. It is established that “Retail follows Rooftops” and revenue follows retail. One need only look to Greene County’s recent increase in retail square footage that followed the residential expansion. In addition the retail sales tax local option has increased exponentially in Greene County since the establishment of the retail centers.
In its most telling omission, the Evans Report fails to recognize that every locality in the state must produce a balanced budget. Property Taxes are set by elected officials after consideration of ALL revenue sources. While the property taxes generated by individual homeowners may not cover Evans cost calculations, these same citizens generate the economic activity [sales tax, commercial tax, machine/tool taxes] that allows the locality to keep property taxes lower because of commercial activity.
One thrust of the Evans report is that growth comes with costs. Taken in isolation this is a true statement but when one considers the economic opportunities and advancements such growth also provides.
The Evans report cites Loudoun County as an example of rampant growth and it is true their government spending has accelerated significantly to meet the needs of their community. At one point Loudoun was building a high school a year to keep up with growth in student population. Late last year, Loudoun County was named by the U.S. Census Bureau’s American Community Survey as the county with the highest median income per household in the nation. With a median income of more than $119,000, Loudoun households generate almost twice the income than Albemarle households. Yes, there is a cost to growth but the benefits far outweigh the costs.
Paraphrasing Aaron Levenstein, “Statistics are like bikinis. While what they reveal is suggestive, what they conceal is vital”.
Neil Williamson, President
Neil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and Nelson County. For more information visit the website www.freeenterpriseforum.org