Miscalculation: Local Taxes Aren't Driving Growth

December 17, 2006
Commentary By MATTHEW J. DAVIS

In the debate over smart growth in the past year or two in Connecticut, one assumption has gone unchallenged: that the tax system is a cause of sprawl. This is false.

Sprawl is low-density, auto-reliant, single-use development on the exurban fringe of metropolitan areas. This development occurs within "greenfields," primarily farms and forests. By far, the overwhelming amount of greenfield land area converted each year is developed for large-lot, single-family home subdivisions. These homes are typically very expensive, far from employment centers and services and thus, dependent upon cars. These homes are owned by people with the money to spend on groceries, toys, clothing, landscaping, hairstyles, video games etc., and so these businesses appear in exurbia.

Thus, contrary to popular belief, sprawl is not, and never has been, a desperate scramble for a commercial tax base. It is about the creation of homes in previously rural areas. Sprawl is the dispersion of incomes into these areas. Sprawl is very much a matter of economic geography. Absent the new and growing incomes in these rural areas, a business would have no or very little interest in investing millions of dollars in a new retail facility on the fringe.

In rural areas, most towns are about 80 to 90 percent residentially zoned. Sure, they may have an area zoned for "industrial," but the likelihood of creating any significant industrial development is remote, given the lack of sewers or highway access. The bottom line is that most of the land will be developed for residential uses. We are not going to outlaw residential development in rural areas.

If the state paid 100 percent of the cost of building and operating rural school systems, would that lead to less "sprawl" on the urban fringe? No. Will state-funded schools stop low-density residential growth in rural Connecticut? No.

But would rural towns then be financially able to zone commercial uses out? Perhaps. Is that the true motive behind state-funded schools? How would that eliminate sprawl?

If the tax system is changed so rural schools are funded by the state, and not local property taxes, sprawl in rural areas will increase, not decrease. A large and wealthy segment of the housing market will continue to desire a large, single-family, detached home on a large lot in a quiet, clean, safe and pleasant rural location. Homebuilders will oblige. Landowners will oblige.

In addition, the economic incentive for town officials to contain residential growth will have been eliminated. Presently, taxes are the basis for "no-growth" policies in many rural communities. We buy open space as much to eliminate new homes (and kids) as we do to protect doodlebugs. We build "active adult" developments not because we necessarily think mom and dad need some time alone, but because these units are a net tax positive.

With state-funded schools, local taxes would become artificially lower. As a result, the service cost of new homes would be minimal. These homes are big and expensive, paying maybe $8,000 or more a year in taxes, far more than needed to fund public works, police and fire services. Sprawl will become the new tax bonanza! Heck, we may even allow a couple of small chic commercial uses in town. Specialty cheeses, perhaps.

Gov. M Jodi Rell should be held in high regard for making responsible growth a major part of her campaign. The Courant has worked hard to get growth on the policy agenda. We all care very deeply about this state. Let's not get sidetracked, as we too often do, on fixing tax policy. Let's put our heads together and come up with a common-sense program that builds on our many successes.

While I obviously disagree with The Courant about the implications of state-funded schools, I do agree that we cannot afford to let this historic opportunity pass without action.

Matthew J. Davis of South Windsor has worked as a planner in both the public and private sectors and is currently manager of planning services for the town of Groton. His opinions are his own.