Archives for December 7, 2012

Has Joe Kelly Heard of the Land Value Tax?

I’m a Joe Kelly fan but I’m going to have to pick on him a bit this morning:

“LERTA is the most fiscally responsible tool to redevelop underutilized properties and expand a community’s industrial tax base,” Kelly said.

Actually LERTA is the second most fiscally responsible tool to redevelop underutilized properties. The most fiscally responsible tool is the land value tax.

With LERTA, cities have to wait 10 years before the new higher value of a redeveloped property is fully taxable, since the higher assessment is phased in over 10 years.

With a land value tax, there’s no waiting for money. There’s no 10-year waiting period to collect the higher tax bill on the higher building value, because the building value doesn’t get taxed.

If Bethlehem taxed only the land value portion of parcels, everyone would get the same deal as real estate investors are getting with LERTA, only there’d be no higher tax bill at the end. This would not require Bethlehem to endure a drop in revenue or to wait to collect any revenue, since it would only be a shift in what is taxed.

Land values would rise as more people took advantage of the permanent tax abatement on improvements to improve their properties, and Bethlehem would collect more revenue from the higher land values.

It’s true that LERTA may be the most fiscally responsible development tool immediately available to Bethlehem, since instituting the land value tax would require Northampton County to conduct a reassessment, and then update assessed values every 3-5 years in response to changes in market values.

But the political difficulty of getting from here to there shouldn’t be cause for public officials to pretend that half measures are the best that can be done when there definitely are better tools available to them under state law.

Try PA’s New “Hot Spot” Policing Program in Response to Recent Violence

All the bloggers and columnists have been chin-stroking about the causes of the recent rash of violent crimes in the LV cities, but that’s kind of a dead end. We do want to know why it’s happening, but more importantly we want to stop it from happening.

I would argue it’s not necessarily important to know why people want to shoot other people. What we really need to know is how high of a risk of getting caught the would-be shooters think they are incurring, and how to make that risk higher.

The best strategy I think we currently know about is “hot spot” policing. Think of it as Broken Windows 2.0. Broken windows was the criminology idea that police need to try for perfect enforcement – even small unpunished crimes (broken windows) communicate a low risk of arrest to would-be criminals, so you have to go after every crime, no matter how small. In practice, perfect enforcement isn’t actually possible, but the 2.0 version of this idea is that you can get close to perfect enforcement for one specific crime, in one targeted area. Once you clear that area, you target another and another and so on.

The conventional wisdom is that this would just displace the crime elsewhere, but when you actually look at the evidence on this it’s clear that the conventional wisdom is wrong. You can read more about it at the link, but lawmakers in Harrisburg just passed a pilot program for Counties, as part of a bipartisan criminal justice reform package. LV County Execs and other County politicians should be first in line to test this out.