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Report: To keep up with infrastructure maintenance costs, local governments need to rethink land-use policies
For better or worse, geographical boundaries separate local jurisdictions and define parameters within which local governments can operate. The land and its value dictate tax revenue—land that’s rich in natural resources, or that’ close to important destinations, demands more value than that which is remote.
It’s a finite resource that must be thoughtfully managed. As localities densify and the world spins further into the digital era, outdated land-management strategies are becoming strikingly obvious. Oftentimes, land use plans don’t account for the monetary impact certain features will have over the long term, according to the latest paper published in the Rethinking Revenue project, a joint venture of the Government Finance Officers Association and the International City/County Management Association with support from the American Planning Association, the National Academy of Public Administration, the National League of Cities, the Government Finance Research Center and The University of Chicago’s Harris School of Public Policy.
The project is focused on rethinking the way local governments fund themselves through novel revenue ideas and alternative taxation norms that are more in-line with modern business practices. Previous publications have outlined the problem with current revenue systems and developed a criterion for evaluating the effectiveness of proposed changes.
“Historical land use decisions did not provide for sufficient taxable activities to pay the cost of maintaining the infrastructure that was built to serve the development,” reads the report, “The root of local government revenues,” which outlines the importance of land use, and unpacks the relationship between land and revenue. At least in part, this lack of forethought explains why “many local governments face difficulties funding infrastructure maintenance and replacement.”
As an example, the report describes the expansion of South Bend, Ind.’s sewer system. In 1960, the system served a population of 132,000 people, and expanded over the years by adding more lift stations and water mains. Today, however, the population has shrunken to a little over 100,000, and the city is facing a challenge like that faced by many cities across the United Sates: “Land use development patterns that are incompatible with long-term financial realities. Sprawling, lower-density development patterns cause infrastructure to grow beyond the city’s ability to generate revenue to maintain it.”
In this modern era, the onus is on local governments to think beyond the immediate expenditure of a given project, the report argues. They must seek “a long-term, dependable solution to their structural revenue and expenditure imbalances,” and “become more intentional about making financially savvy land use decisions.”
A major hurdle local governments face in expanding current land use practices centers around precedence: Is it appropriate for governments to change the way they bring in revenue? Traditionally, public services are perceived by constituents as entirely altruistic and for the broader good. But while this perspective might be accurate in theory, it fails to consider the mechanics of responsible management practices.
To read the complete article, visit American City & County.
