Wednesday, April 18, 2012

Austin Keeps It Weird WithTax Policy

Okay, so this is the kind of thing that the local politicans do in Austin that really leaves me feeling frustrated.  Travis County approved an incentive deal for Apple Inc. this week, giving it a 65 percent discount on its tax rate over the next ten years without requiring the company to hire any Travis County residents for its new 3,635 employee facility (and this is in addition to the $21 million in state money that the company will receive for the project through the Texas Enterprise Fund).  Meanwhile, The City of Austin is contemplating an almost 2 percent increase in its property tax rates (which are already pretty high).
I recognize the fact that the city and the county are two separate governmental entities and that their taxes go to support different things, but the cumulative results of the "business friendly" approach taken by our local and state politicians continues to mean more and more money flowing into the pockets of Apple shareholders and executives while the typical Austin resident continues to bear the financial cost of keeping large corporations happy.
I understand the argument that we have to continue to attract strong, healthy businesses to our city in order to keep our economy thriving, and I actually give those arguments a fair amount of credibility and weight.  I acknowledge that we want to have powerful businesses in Austin in order to keep our citizens employed and our economy robust.
On the other hand, at some point I start to feel like we're a city that collectively suffers from self esteem issues when it comes to attracting industry.  At this point I feel like we're giving more than we're receiving, that we're failing to trust in the fact that we provide an extremely inviting business environment, even when we don't roll over and provide huge tax incentives to corporations.  The population of Austin, as a whole, is being asked to take on a tax burden that supports relocated businesses even when large parts of the population don't really benefit in any meaningful way from having these businesses move to Austin.  Huge parts of our city still don't get hired by or work for the same businesses and industries that receive these tax deals, but the citizenry still see their tax rates going up while corporations receive break after break.  In particular, wealthy corporations that can afford to shoulder their fair share of the burden seem to keep getting richer and richer (what's the value of Apple stock right now?) while many medium to lower income families continue to pay higher and higher taxes on the only real asset that they own (i.e., their homes).
I don't mean to just beat up on Apple.  Many other companies have similarly benefited from the naive enthusiasm of our local leaders while local taxpayers received no relief (remember when Travis County gave a huge tax break to the Formula 1 racetrack, zoning it as a wildlife area in order to help seal the deal on construction?), but the whole practice just needs to come to a stop.
We're not a small town anymore that needs to go begging on its knees in order to attract development.  In fact, according to Forbes magazine, we're already one of America's fastest growing cities.  Austin is a growing, medium-sized urban center with a high standard of living, relatively affordable housing (especially in comparison with California, Seattle, and other tech corridors), a well educated populace, and an established tech industry that provides a highly trained workforce and numerous opportunities for intra industry collaboration.
We ought to have enough confidence in the attractiveness of our city to realize that companies will come to Austin without our citizens having to pay out bribes.  New businesses pump money into the economy, but they also bring in new residents and put additional strain on the infrastructure (our roads are already extremely congested for a city our size, and in the midst of an extremely ealthy city the Austin School District has faced numerous budget shortfalls and school closures in the last several years). 
We don't necessarily need to be focusing on begging companies to move here.  If we want to continue to stay healthy and manage smart growth, I think we need to be trying to keep our existing businesses relatively healthy while also asking them to make a fair contribution to support the community that has helped to make them successful.  It's great to have a growing, thriving economy that makes part of our population (and nonlocal investors) quite wealthy, but not at the cost of failing to provide decent services to everyone else and not at the expense of having to ask the residential population to foot the bill.

Soooooo...  everyone not living in Austin who reads this and owns Apple stock needs to send me a dollar to put toward my property taxes!  ;-)  Sorry to vent. But I feel a little better.


The League said...

Yup. The Austin City Council often feels like they have a playbook that has about three rules, one of which is "we will do believe and follow the advice of whatever people from out of town tells us is good for Austin", and the rule "as long as there are construction cranes on the skyline, that means we're improving Austin's quality of life". Its not just the tax breaks, but the bending environmental regulations, and other boneheaded missteps like when they almost let someone build their hotel right out over the park on the river, which would have made the trail and path around the river unusable and basically cede a popular Austin park to a private company. Add in the BS about "affordable housing" that opened the door to condos only out of town millionaires could afford for their weekend getaways, and who are now pressuring live music venues to quit making all that racket...

I understand Austin needs growth, and I wanted Apple here. But we need more quid pro quo for guarantees of employment, and not just attracting more people to Austin. Especially if the City Council won't invest in transportation infrastructure as we head into DFW-like sprawl.

There. Now THAT'S a rant.

J.S. said...

Yeah, I try to be careful because I don't like being one of those people who always talks about how things were better in the old days, and, honestly, a lot of the change and growth that Austin has gone through has been relatively positive (there are plenty of other cities to hold out as examples where urban growth has been far more damaging), but Austin definitely needs to start engaging in some better long term thinking if it wants to avoid becoming a divided city with a very wealthy upper class and a struggling middle and working class. We need fair taxation across the board, from top to bottom, to help sustain our schools, roads, emergency servies, etc., etc.. We don't just need growth for the sake of growth (we can't keep enticing companies to come here by passing corporate tax burdens on to citizens, and luring companies here with limited time tax incentives doesn't guarantee that they won't pull up stakes and go somewhere else if they get a better deal 15 or 20 years down the road, anyway).

The League said...

Agreed. I want to type more to ensure my opinion is felt, but that more or less sums it up.

J.S. said...

I feel ya! By the way, here's a story about how Austin city employees are completely backlogged on being able to review and approve application for commercial development in a reasonable amount of time (because so many companies want to do business in Austin) and about how City Council is reluctant to raise Austin's fees to processing fees (to even match comparable levels in other cities) to hire appropriate personnel to process the paperwork.

Just sort of symbolic of how we're so afraid of deterring growth that we don't allow ourselves to marshall the resources to manage the growth that we already have...