Friday, December 26, 2008

Sad episode (not) in Gilbert underlines the disconnect people have between taxes and services

Gilbert, Arizona is a typical suburban/exurban community (in this case a suburb of Phoenix.) Upscale but not identifiably wealthy (like Paradise Valley, for example) and with a mixture of neighborhoods but few or none that would be considered 'bad' it is politically conservative-- the kind of place in Maricopa county that provides reliable Republican majorities that keep the county tilting red even though the city of Phoenix has begun voting Democratic. Gilbert has been singed by the foreclosure crisis like the rest of metro Phoenix but it has escaped with less of a hit than a lot of other communities. And like in most conservative communities, people there don't particularly like paying taxes and they will tell you that.

Gilbert isn't completely solidly contiguous however, containing several unincorporated 'county islands' surrounded by city. The people who live in those areas are generally a little more well off than the rest of the city, and they have steadfastly refused to be incorporated into the city, because then they would have to pay municipal taxes (though Gilbert's municipal taxes are not particularly high in comparison with other local cities.)

So a couple of years ago the issue of fire protection came up. The legislature passed a law in June stipulating that the residents of the 'county islands' pay a fee of $1.59 per $100 of secondary assessed valuation (a reduced tax, in other words) specifically for fire coverage. According to today's paper the city is being forced to 'eat' a significant loss at that, as the $1.59 only pays about half the cost of providing coverage in the expanded area.

Yesterday that was put to the test. And it failed badly. First of all, firefighters from three fire houses who responded to a residential fire discovered that residents of the 'island' had put 800 to 1000 pound concrete barricades up across the street they were coming down (apparently to keep out unwanted traffic from residents of the town of Gilbert; I guess being 'unincorporated' gives some idiots the right to think they can redraw the street map as they see fit without notifying emergency providers.) So the firefighters had to park their trucks, get out and spend several minutes dragging the barricades away while the fire was flaring out of control. Then they got there, and they discovered that since they were not within the city (where city law specifies that there must be a fire hydrant every five hundred feet) the nearest hydrant was nearly half a mile away. After patching together almost half a mile of fire hose, there was very little to do except put out the embers and make sure that the fire didn't spread to surrounding structures. The home was a total loss (though the good news is that no one was injured.)

A neighbor was interviewed in today's Arizona Republic, and she thought that the $1.59 'fire fee' should have covered the placement of hydrants. In fact it does not. It covers fire coverage-- and that's all. Essentially they paid the firefighters who responded to the call to remove their barricades, piece together a half mile fire hose and prevent the fire from spreading beyond that property. The cost of placing hydrants, a basic infrastructure item (and $15,000 per hydrant) is far more than the reduced tax they are paying will cover, even if the city got authorization to put them there, technically 'outside' of the city limits. But the people in the 'county island' seem to think they should be there-- in other words they refuse to join the city because they don't want to pay city taxes, but they want the city to use those city taxpayers' money to put an infrastructure improvement-- fire hydrants-- in their community that wasn't called for under the legislatively passed law (and recall the city of Gilbert has stated that the fee they are being forced to accept by the legislature only pays about half of the actual cost of coverage, and that's not including hydrants.)

What gets me here though is something that I've seen before. I remember living in a town where there was a municipal bond issue on the ballot to pay for basic services. A group of very vocal anti-tax people campaigned hard, and they succeeded. The measure lost. Fair enough. But then a couple of months later the town announced that it was cutting back on residential garbage collection, from every week to every other week, and all of a sudden the very same people who had been up in arms about the bond issue started complaining loudly about the cut in services. Apparently it didn't register on them that there was any kind of connection-- they must have been spoiled as kids, believing that the services they need will just materialize out of thin air without actually having to pay for it. Maybe they think that government is just awash in waste and fat, so that they can cut taxes and they will still find the money to maintain services by 'trimming fat.' I've talked to more than one person who's told me, after voting against a bond issue and expecting that things will be paid for, "They've got the money, you know they do." Well, in fact often they don't. Tax cuts = budget cuts = service cuts. A really simple equation.

Now, if you honestly believe in tax cuts, that's fine. But don't complain if services get cut. I believe the opposite-- I favor government providing quality service-- but I understand that the price I pay for it will be higher taxes.

Ironically, it is the more conservative regions of the country that most benefit from taxes, but apparently take that for granted. In fact, if you look at Federal spending on a state by state level (using 2005 figures, the most recent ones available) in terms of the amount of money received by the states per dollar of tax revenue collected within the state you will find for example that eight of the top ten states in return per tax dollar voted Republican in the 2008 election* while all ten of the bottom states for federal spending per tax dollar collected voted Democratic this year. In fact, it is even more stark than that. Texas, which gets back $0.94 in federal spending for every tax dollar collected in the state, is the only state that voted Republican this year that does not get a net benefit from federal largesse. Georgia, which barely comes out ahead (at $1.01) and Utah ($1.07) are the only other 'red' states that even come close to breaking even, while every other Republican state gets back at least 10% more in federal dollars than they put into the till. Or put another way, if conservatives got their dream and eliminated the IRS and handed everything back to the states that is now paid by the feds, most blue states could maintain the level of services they have now without having to collect as much as the feds are now collecting, while most red states would either have to drastically cut services, drastically raise taxes even above what their residents are paying in federal taxes now, or possibly do both of those things. Yes, the gospel of anti-big government, from those who most depend on continued big government spending.

But there are still people who think you can get something for nothing, that they can have their cake and eat it too. And until that delusion is addressed and people understand the connection between taxes and the services that are provided, I think we will continue to see more situations like the unfortunate one that happened yesterday not in Gilbert.

*-- yes, the District of Columbia in 2005 did benefit from $5.55 in federal spending in the district per tax dollar collected in the district, but that is neither surprising nor relevant since the District is the seat of the government and most of this was spent on the operation of the federal government. I don't have a figure on just what was spent on programs directly benefitting the district and its residents per tax dollar paid but I suspect it's only a fraction of this.

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