I was out there working on a project being done for the greater good. All of the safety improvements, all of the new growth that would results, all of the jobs that were going to be created – including mine – were a benefit to the entire region.
Here was one person asking how this benefited them. Did she not see the larger picture? Did she not care? Did she not recognize how selfish she sounded? It was clear to me that I needed to end this conversation.
Eng.: You will benefit from the added tax space from the new growth.
Resident: But the new growth is in a tax subsidy district. How much will they contribute to the tax base?
Eng.: Nothing today, but in 10 or 15 years, they will contribute a lot to the tax base.
Resident: Why would we make an investment that will not start to pay back for 10 or 15 years? By then, the grocery store will be turned into a dollar store and there will be a new tax subsidy zone.
There are always people against tax subsidies. Generally, I would be one of them, but I had been in the meetings with investors and developers. I knew that none of this investment was going to happen without the tax subsidies. And if this city didnʼt have new investment, more places would start to look like this blighted neighbourhood.
Eng.: If we do not provide the subsidies and invest in improving streets, the growth will not happen. Without growth, our city will die.
Resident: But if I canʼt walk across the street to the grocery store, it will go out of business. If I canʼt walk up the street to go to the restaurant, it will go out of business. Nobody is going to want to buy my house with a highway outside my front door. Do you care that my neighbourhood is dying?
It was precisely because her neighbourhood was dying that I was out there. This project was the neighbourhoodʼs best hope for revival. If I could get more traffic flowing through here, more people from outside of the neighbourhood passing by, this neighbourhood would have a chance for some investment. Why couldnʼt she see that I am part of the solution?
Eng.: Yes. That is why we are investing in new growth. That is why we are improving the street.
She looked past me, off into the distance, one of those long stares that people do when they are collecting their thoughts. I reminded myself that she had a lot to process here. My patiently exhausting her line of questioning was part of that process. I waited for her to speak.
Resident: So how much will this street improvement cost?
Now we are back on solid ground. I had prepared the cost estimate and knew this answer.
Eng.: The total project cost is nine million dollars.
Resident: Nine million dollars! Our city is broke. We canʼt afford to keep the streetlights on overnight. We have laid off our firefighters and half our police force. Where are we getting nine million dollars?
I understood the sticker shock. This was a large project, especially for this community, but now I had a chance to impress her. All of this new investment, all of these improvements, all of the new growth that would result, and all of the jobs and economic development was going to happen and most of it was being paid by others. As a taxpayer in this city, she was getting a tremendous gift.
Eng.: Seven million dollars is stimulus money coming from the state and federal governments. The other two million dollars will be assessed to the property owners that benefit from the project.
Resident: What does that mean, ‛assessed to the property owners that benefit from the project?ʼ
Cities are limited in the taxes and fees that they can charge property owners. Some of this limitation comes directly from the equal treatment provisions in the US Constitution itself. One exception to treating everyone equally is the assessment process. When assessing, a local government can charge a property owner whatever amount they want to so long as the property value increases by that amount.
If the project increases a properties value by, say, $10,000, the city can charge the property owner up to $10,000 for doing that project. The engineering firm where I was employed did this kind of work all the time. In fact, this neighbourhood had been so neglected, the public infrastructure in such a state of disrepair, that just having new pavement was likely to improve this womanʼs property value.
Nonetheless, I dialed back my enthusiasm, reverting to the classic speak I had heard other engineers use in public hearings on assessments.
Eng.: It means that the property owners who benefit will pay a share of the cost.
Resident: Who is it that benefits from the project?
Eng.: Everyone who is on the street.
The vacant stare evaporated. She looked me straight in the eyes, a combination of frustration and confusion apparent on her face.
Resident: Wait, are you saying that I benefit from this project and will pay an assessment?
I again looked down at my shoes. I tapped the ground with my foot, a reflexive behaviour.
To be continued …
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