Sales Tax: Starvation Diet for Cities in an Increasingly E-World
How long is your commute? Imagine a young family with a toddler at home. If Dad or Mom takes an hour to get to work each day, by the time their offspring is ready for college they will have spent a full two years of quality time out on the freeway. And it’s getting worse.
Californians spend 300,000 hours stuck in traffic each year. In the Silicon Valley, where the average price of a house is at $410,000, commute times are approaching 1 1/2 hours. When people can’t afford to live close to where they work, they drive.
If we are going to successfully deal with a future that includes an additional 200,000 Ventura County residents, we must change our approach to jobs and housing. We can do this if we are willing to change the way we pay for neighborhood services.
Right now, most of the money you pay for your property tax goes up to Sacramento and doesn’t come back. That means your city has to scramble around for sales tax if it is going to put cops on the street and take care of all the things that make your neighborhood a good place to live. But the future of sales tax ain’t what it used to be.
Just as the mom-and-pop outfits planted along Main Street were uprooted by regional malls with easy freeway access, so mall retailers, unless they opt for a cyberstop on the information superhighway, will find their clientele no-showing in droves, bound instead for a virtual shopping spree located a mere mouse click away.
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By 2002, nearly one-third of all automobile sales will be electronic. Saturn is already advertising an online showroom in which you can select the automobile of your dreams and have it delivered directly to your door. That’s right, no dealer and--more significantly--no sales tax. Cities that bank on auto malls, such as Thousand Oaks, Oxnard and Ventura, may find they have invested big bucks in a passing fiscal fancy.
Any community that chooses to live on sales tax alone has given the nod to but another fad diet. Rather than encouraging the dash for retail cash, we should be advocating sensible land use and the creation of good-paying jobs. Getting Sacramento to provide incentives via giving back more property tax is one way to do this. There is, however, another way that directly relates to job creation and doesn’t rely on the ever-elusive sales tax dollar.
Every W-2 form contains two pieces of information pertinent to this discussion: the ZIP Codes of the employee and the employer. Suppose we were to reward a city for attracting job-generating businesses by allowing a portion of the income tax collected to remain local. If the employee also resided in the same city, the percentage would double. Think about it. The shorter our prospective employee’s commute, the more cash would be deposited in city coffers. It’s a win-win.
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By not bowing to “big boxes” et al in pursuit of sales tax, municipalities could switch to wooing companies that pay enough for people to live where they work. The lopsided jobs / housing balance in Ventura County’s bedroom communities promises to worsen as growth boundaries send the price of single-family dwellings soaring. This income tax initiative would also pay off in less smog-choking traffic as well as more time, commitment and money expended right here.
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Keep in mind that because we are talking about new jobs, this initiative wouldn’t greatly impact state revenues, and instead of watching helplessly as sales tax dollars disappeared into cyberspace, we would be making Ventura County a better place to live. And work.
