Taxes are connected to growth
December 5, 2005
Frisco is engaged in a heated discussion about bringing a big box store to the town. Silverthorne has pondered “buying” a grocery store. Dillon is considering the annexation of the Fishhook property for an extensive commercial development. What’s going on? Publisher Jim Morgan has pointed out that these towns’ base their economies on sales tax revenues. The revenues from sales taxes pay for municipal services and various amenities. How much sales tax revenue does each of these towns actually need? Think of some extreme examples. If Frisco had 200 residents, as it once did, would it need any big box stores to generate the sales taxes to pay for municipal services? What if Silverthorne were to grow to 12,000 residents? How many big box stores would it take to generate the sales tax revenues to support the municipal services for this population? Town development cannot be separated from finances. Residential areas require more in services than they pay in sales taxes. Each town seeks to develop sales tax revenues from commercial activities that draw upon customers from outside their town. The sales tax revenues generated by out-of-town shoppers at Wal-Mart are essential to Frisco. The sales tax revenues generated by out-of-town shoppers at the Outlet Malls and Target are essential to Silverthorne. The Dillon Ridge Shopping Center sales tax revenues from out-of-town shoppers are essential to Dillon. The search for more commercial developments that will generate sales tax revenues is based on the assumption of extensive residential development. What are the assumptions for residential development that are driving the elected officials of these towns? How much residential development do they expect? How much tax revenue will be required to service that development? How many big box stores will be needed to generate those taxes? With this information, it might be possible to have a more informed discussion on whether or not a Home Depot, or another grocery store, or an indoor water park is desirable. Endless growth cannot happen. We call such growth in the body cancer. In particular, the economic model based upon sales taxes cannot accommodate endless growth. Only so many big box stores and shopping malls can be accommodated in the county. There are other limits to endless growth. How much residential and commercial growth can be accommodated before the assets that make Summit County and its towns attractive are lost? There is some tipping point where further growth will degrade our assets so that the county and its towns are no longer attractive for residents and visitors. Most residents and visitors don’t want Summit County to be like suburban Denver. How much more development can be done before we reach the point of urbanized sprawl? How much more development can be done before the sales tax economic model fails? We need to ask our elected leaders to articulate their vision for the future. What do they want their town or Summit County to look like and be like in 10 or 20 years? What kind of place do they want to leave to their children and grandchildren? If we understood their vision, it would be easier to decide upon the specific proposals they make. A Home Depot for Frisco, a grocery store for Silverthorne, an indoor water park for Dillon would be easier to assess if these developments were presented in the context of a long-term vision. I want to leave my children and grandchildren a place they will be eager to visit, a place they will consider living in. I want them to have the mountains, the rivers, the lakes, the ski slopes, the hiking trails, the bike paths that I have enjoyed. I want them to be able to go to the post office or the grocery store and know that they will meet friends and neighbors who love the community. Since I first came to Summit County, we have greatly improved the facilities for education, medical care, shopping and community activities. These improvements have mostly been beneficial. But there are limits beyond which growth turns into cancer. We need a community dialog about how much growth we want, and how we will pay for the services demanded by that growth. We need to have a community vision for the future. It should be our vision, not the vision of developers out to make a quick buck. I don’t know what the Frisco voters will decide about Home Depot. But I hope their decision, and future decisions in other towns, are informed by a long-term vision of what the town and the county should become. What kind of place do we want to leave for our children and grandchildren?