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Sales Tax Sharing Debated in Sacramento © 2002 National Public Radio ALL RIGHTS RESERVED. |
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BOB EDWARDS, host: State lawmakers in California are considering a novel pilot program to deal with suburban sprawl. They're debating whether to force all the cities that make up Greater Sacramento to share sales taxes. The theory goes that if cities don't have to compete with each other for taxes, they're less likely to put new malls and big retailers where they don't belong. But many California suburbs are fighting the plan, saying sales taxes have become their lifeblood since California famously slashed property taxes in the 1970s. NPR's Andy Bowers reports. ANDY BOWERS reporting: The Sacramento suburb of Roseville is a place where things just seem to be going right these days, at least from Craig Robinson's point of view. Mr. CRAIG ROBINSON: This is Highway 65 that we're getting onto. And this will become a large retail corridor. The Wal-Mart is going to go right at this corner right here. This is pleasant... BOWERS: Robinson, Roseville's assistant city manager, knows that every new Wal-Mart or Target or auto mall means more sales tax in city coffers. And more sales tax means more of what residents want: police, fire stations, libraries, parks. Mr. ROBINSON: We also have a sports complex, a gym and workout facility, 50-meter pool is here. BOWERS: But travel down Interstate 80 into the city of Sacramento, the region's urban core, and you get a different picture. Along Florin Road, a major shopping street, there are plenty of dilapidated and empty storefronts. Mr. LARRY CARR (Executive Director, Florin Road Partnership): We've had an exodus of especially national chains, Mervyn's, restaurants have closed, bookstores have closed, candy stores have closed and moved out to the suburbs. BOWERS: Larry Carr is executive director of the Florin Road Partnership, which tries to bring retailers back to Sacramento. He says suburban cities can offer tax breaks to attract big-box stores and shopping malls, so Florin Road, he says, usually loses out. Mr. CARR: There's a huge competition in the region to lure large retailers to generate those sales taxes. But I don't think it's in any of our interest to have huge sections of our urban centers that are decaying. BOWERS: Enter Sacramento's representative in the state Assembly, Darrell Steinberg. Steinberg has proposed a relatively simple idea that has caused a political earthquake in California. The idea: a pilot program requiring the six counties that make up Greater Sacramento to share their sales taxes. Representative DARRELL STEINBERG: All the bill does is take a percentage in the growth of the sales tax and redistribute part of the growth across the population of the region. BOWERS: Steinberg means cities and counties would keep the money they currently get from sales taxes all to themselves. Anything above that would be split three ways. A third would still go to the place where the sale is made, a third would go into a regional pool and a third would reward areas that spend more on things like homelessness and affordable housing. This isn't an exercise in social justice, says Steinberg, but an incentive for suburbs to stop gobbling up more land and building new roads for commercial development. In other words, he says, it tackles the common American dilemmas of sprawl, pollution and traffic. Rep. STEINBERG: Cities and counties oftentimes are making bad land use decisions. They're rezoning property for the next big box or the next auto mall, where it's not appropriate. But the air pollution knows no borders, the traffic congestion doesn't go from bad to good at any particular city or county border. We have to have a system that puts a premium on cooperation between cities and counties. BOWERS: But Steinberg's bill has sparked more anger than cooperation among suburbs like Roseville. Assistant city manager, Craig Robinson, says the problem is simple: Proposition 13 and state lawmakers have already taken away most of what local governments used to get from property taxes. Mr. ROBINSON: Sales tax really is all that we have left. If the state doesn't like how local governments are financed, then they need to give us another source of revenue, so we are not dependent upon the sales tax. BOWERS: If there's one thing both sides agree on, it's that the Sacramento area needs more regional cooperation to solve its problems. But Rex Hime, a lobbyist for the California Business Properties Association, says the idea of forced sales tax sharing is hardly promoting harmony. Mr. REX HIME (Lobbyist, California Business Properties Association): This measure has created more ill will within the region than ever existed out here before. BOWERS: Hime's membership of retailers like Wal-Mart and Target opposes the bill. He and other critics argue it's really designed specifically to help Sacramento, now that it's losing business to its suburbs. Mr. HIME: Interesting enough, Sacramento City, when it was the hub of all the sales tax activity, it never once said, `Hey, Roseville, can we send some money your way?' BOWERS: Also opposing the bill are suburban cities across California, who fear it might spawn statewide sales tax sharing. Watching with interest is Minnesota state senator, Myron Orfield. The Minneapolis area adopted property tax sharing in the mid-'70s. Orfield says it has produced better regional planning, and he'd love to see California put the idea back on the national agenda. State Senator MYRON ORFIELD (Minnesota): People think that these very progressive urban planning things can only happen in places like Minnesota and Oregon. And I think that if this can happen in California, which is large and diverse and complicated, I think it would change the whole country. I mean, there are a lot of places that are sitting on the verge of something like this. BOWERS: The California bill passed the state Assembly by one vote in January. It now faces a tough fight in the state Senate. Andy Bowers, NPR News, Sacramento. << Back to Press Clippings |
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