this american life - on local tax cuts

[mattkime]

http://www.thisamericanlife.org/radio-ar...of-country

All across the country right now, local and state governments are finding they can't pay their bills. Schools are losing teachers, street lights are going dark, garbage is piling up in public parks, and cops are suddenly an optional expense.

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interesting discussion.

[cbelt3]

Uhm... in many cases local governments did not 'cut their taxes'.. their taxes dropped like a gut-shot goose because their economies tanked.

[$tevie]

Thanks for the link. I will listen when not at work!

[mattkime]

cbelt3 wrote:
Uhm... in many cases local governments did not 'cut their taxes'.. their taxes dropped like a gut-shot goose because their economies tanked.

sorry, you're right.

[cbelt3]

De nada... I will also note that many local governments engaged in 'business stealing' by offering tax cuts to targeted businesses. It got so bad that in the early 00's many local governments signed 'no poaching' pacts.

So there WERE actually some tax cuts... just not across the board.

Heck, my own company just benefited from a $1M / yr tax cut from Ohio in exchange for committing to invest $100M in our business here and growing and sustaining 200+ jobs for the next 20 years.

[$tevie]

Don't let a headline dissuade you from listening to the show, cbelt. TAL is an excellent place to hear various viewpoints/experiences.

[hal]

I hear a lot about this here in California - Stockton is about to declare bankruptcy.

A lot of the problem is in the capitols. One way that Washington cuts costs it to shift responsibility of many functions to Sacramento. In turn, much gets pushed on to counties and cities.

[cbelt3]

$tevie-
I'll check it out from home. I've listened to it before, very evocative.

hal-
Yep. "Unfunded mandates".

[Acer]

It's not just unfunded mandates. It's also dropping the ball they once actually carried. Washington, or Sacramento, or Harrisburg here in PA, balances their books by de-funding programs that they have funded historically for decades to generations, programs like schools, libraries, public works grants, conservation grants, etc. I applaud a government that avoids raising taxes in tough times (or any time), but at some point someone's gotta pony up the cash if you're going to have a civilization.

[Bill in NC]

Bankruptcy is going to be a huge game changer.

Almost unheard in the past, many California cities will be taking this path.

It will be much more expensive for all cities to raise money via muni bonds.