A Regional Tax Base is the Solution to Townships’ Worries About the Allentown NIZ

Bernie O’Hare gets it almost entirely wrong in this post on city subsidies (how do putting the property-tax exempt Federal Courthouse in Allentown, or SNAP benefits, count as subsidies for urban living?), but we do agree on the last paragraph:

This discussion is not about whether an economically stronger Allentown is better for the region. Practically everyone agrees that a stronger Allentown benefits the entire Valley. The discussion is about the most effective ways to make that happen. It should not be a “them v. us” issue.

This is correct, but it’s important to understand why it’s correct.

Economic development is not zero-sum. A stronger Allentown economy is good for South Whitehall’s economy. More business growth in the city benefits all areas with convenient access to the city. It makes the whole LV economy more productive by increasing the size of the market, increasing the rate of job growth, increasing the variety of recreation and entertainment choices, increasing the value of land with convenient access to Allentown, etc. If Allentown becomes a jobs and entertainment cluster, that’s great for suburban areas too. Just as the Philadelphia suburbs are wealthy because Philadelphia is a big job cluster, the same will be true for Allentown’s suburbs. Proximity to a job center increases land values in the suburbs as well.

One thing to note about this is that the inverse is not true: while “practically everyone agrees” that growth in Allentown would benefit the entire region, there is no evidence that growth in the suburbs from the late 90’s to mid-2000’s has benefitted Allentown. That’s the simplest reason to prefer concentrated growth in office real estate to diffuse growth in office real estate.

So if “practically everyone agrees” that growth in Allentown will be good for the whole region’s economy, then why are the townships so opposed to concentrating most office construction there in the future?

It is because there are separate tax bases. While economic development is not zero-sum, competition between tax bases is a “them vs. us” issue.

When a business moves from South Whitehall to Allentown, it stops paying taxes to South Whitehall and starts paying taxes to Allentown. This creates a perverse incentive for South Whitehall’s government. Even though more growth and low rents in Allentown would be good for the economic prospects of their residents, it creates a problem for their government’s budget position.

If South Whitehall would merge its tax base with Allentown’s tax base, there would be no problem at all for residents of South Whitehall. There would be no need to raise taxes, or to cut public services. They would enjoy all the benefits of growth in Allentown.

The same is true for all the other municipalities. The only reason that low rents in Allentown pose a problem for them is that they want to keep their small political jurisdictions intact, and want to keep funding public services out of a small tax base.

This is what regionalism is all about. The answer to the problems posed by the NIZ for townships is not more inter-municipal competition, but fewer municipalities. Rather than working to stop a change that will be good for the whole region’s economy because it raises the cost of parochial governance (the definition of parochialism), townships should take this opportunity to weigh the considerable benefits of regionalizing the tax base.

Everyone can get in on the benefits of the NIZ if they are willing to regionalize the tax base at the County level. That’s clearly the best way to go. No tax increases, no public service cuts, and everybody shares in the upside – not just in their role as consumers and wage-earners but also as taxpayers.


  1. FutureDowntownArenaAttendee says:

    Jon, It is impressive that when you present facts in a post on Bernies site he responds with name calling. Sign number one that someone is losing the argument. His response of calling you an idiot, warped bastard and nuts is further proof that the man is reaching at straws at this point.

    • Jon Geeting says:

      What’s funny is that he seems to be coming close to understanding why this is a good thing. But the closer he gets to understanding the issue correctly, the more he resists that conclusion.

  2. FutureDowntownArenaAttendee says:

    What Bernie is doing is hedging his bet. When the lawsuit is “settled” or thrown out he will be able to go back and state that he agreed with the law in some manner.

    I particularly like his comment that you have no idea what is going on because you don’t attend meetings. That is hilarious in itself because 99% of the people who post anonymously on his board don’t attend meetings but you don’t see him calling them out for it.

    Two things are obvious about O’Hare. If you post anonymously and disagree with him with facts he will attempt to discredit you because you are anonymous…he really hates that. Second, when you make an intelligent and fact based comment he responds with name calling. He can’t respond with researched facts… just his ideological opinion.

    • Hi Jeff, how are ya?

      The lawsuit will be settled, it was always going to happen. It had to be filed to force Allentown and the state to take a regional approach instead of fucking over everyone in their path. Of course, you already know that but real good job playing the buffoon! Money well spent by Ed and JB.

      Jon, please stop treating those of us smarter and more experienced than you like we’re maroons. Regionalizing the tax base will result in funds flowing from the burbs to the cities, elimination of support and maintenance groups that focus on the burbs, the results of which will be cuts in service across the all the suburbs. You know it and you’ve advocated for it so please just stop already and admit it’s what you want.

      • FutureDowntownArenaAttendee says:

        Who the fuck is Jeff and why do you call me that name?

        • Because that’s either who you are or who you work for.

          Please don’t get upset there Jeff, you did a great job keeping your true identity under wraps and playing the buffoon for a long time now.

          Job well done!

      • Jon Geeting says:

        The distribution of services would depend on politics, just as it does with smaller tax bases. You’re always going to have some people who want more services and higher taxes, and some people who want less services and lower taxes. All that would change is that those decisions would be made on behalf of the whole region. I don’t claim to know what the outcome of that political process would be.

        Personally, I would be arguing for a more progressive distribution of services and taxation than what currently exists. But who knows if the people who agree with me on that would win a majority of the elections? It’s impossible to predict.

        • And with the NIZ fiasco, we’re supposed to trust who to provide this enlightened regional guidance that won’t screw us?

          Yeah, that’s a plan.

          You really do think everyone else is an idiot. Nice try there Junior.

          • Jon Geeting says:

            Elected representatives, of course: County Commissioners.

          • The same group that screwed the burbs on yard waste recycling?

            Filling me with even more confidence.

          • Jon Geeting says:

            That was a bad decision, but it was a political decision. Different politicians would have made a different decision.

          • It’s a good decision to make a commitment, and then break it?

          • Jon Geeting says:

            Apologies, it was a bad decision.

          • Jon Geeting says:

            Different politicians would have had different priorities. Says nothing about whether the institutional design is good or not. I’m for proportional representation in regional government. Whatever decisions come out of that are valid. I would personally try to elect at-large politicians that are more left wing and pro-city, but again, governments change and politics changes from election to election. Just as with federal and state government, the policies that government produces will be a function of how people vote in elections.

          • The whole point of ceding control to the county, and the opposition, is rooted in crap like this. And the NIZ just compounds it.

            In a perfect world you have a point. But the world isn’t perfect and you need to take that into account in your analysis.

          • Jon Geeting says:

            There is no such thing as a perfect world. It’s all just trade-offs. The question is, at what level should those trade-offs be considered? I say regional level makes more sense. It’s not *perfect* but it’s better.

            The political decisions coming out of a regional body would be just as messy as anything coming out of municipal and County governments now. The difference would be that legislators would be tasked with governing the whole region, not just tiny parts of it, and trade-offs that are not considered now would have to be considered. Do the benefits of building subdivisions in Lower Nazareth outweigh the costs of flooding in Bethlehem? No political entity exists to weigh that trade-off now. And there are a million other similar trade-offs that are never considered because each municipality is only considering its own immediate interests.

          • It’s better from your point of view. It’s not from the suburbs’ point of view.

            Until the powers at the city and county level show they can be trusted, no dice.

            I’d rather pay higher taxes and keep what I know I have than cede control as you’re advocating. And most of my neighbors and friends who live in the burbs feel the same way.

          • Jon Geeting says:

            Ok, but see that’s your choice. You could share in the upside of the NIZ in your role as a taxpayer, but you’re choosing not to. You think it would be better for Emmaus to raise taxes or cut services in response to the NIZ than to regionalize the tax base and share in the upside of the new development.

          • There’s no benefit to the NIZ that I’d get by regionalizing that I’m not getting already though – what benefits are you referring to?

          • Jon Geeting says:

            30 years of high-rise construction on 130 acres in Allentown is going to produce a ton of real estate tax revenue for public services, meaning that the city will not have to raise as much from residential homeowners. They will raise most of their real estate tax revenue from very expensive buildings, which will enable them to fund public services with a lower millage rate. I would not be surprised if the millage rates in Allentown went lower than the township rates at some point over the next 10 years. That would be another competitive advantage for the city in attracting development.

            The other benefit is less of a benefit than simple harm avoidance. If people really believe that Allentown’s going to poach a bunch of businesses and push down commercial assessments in the boroughs and townships, then it makes sense to merge tax bases and avoid that harm.

          • Jon,

            I think you aren’t looking at the whole picture. Emmaus, or South Whitehall, residents may think it is worth paying more for having locally-controlled police at a locally-determined cost to meet locally-determined standards. Just because something is “regional” or even “cheaper” doesn’t mean people will be satisfied with it, if commonly agreed standards aren’t met.

            Of course, if everyone ate at the same restaurant it would be cheaper for everyone, but maybe you want something different.

            That’s why I say that for regionalism to work Allentown has to solve its public-management perception/issues. Other communities right now are not interested in joining a team that allows “injured” public safety workers to play golf–and then they win their appeals.

            Using the NIZ in the argument is part of the problem. If the state wanted to say that all EIT go to place of employment, that would be one thing, but to do it for just one municipality makes it a slap-dash piece of political pork. I don’t know why anyone expected the reaction to be any different.

          • Jon Geeting says:

            Hyper-local governance and public services are more expensive than regional governance. It’s fine if people want to pay more for hyper-local control (although I’d be hard-pressed to identify any value in it other than pure sentimentality), but the trade-offs should be made clearer to people. I am hopeful that the NIZ will start a much-needed debate over inter-municipal competition, municipal finance, and regional tax bases.

  3. Anonymous says:

    O’Hare’s post about the supposed losses at Reading’s Hockey Arena is quite misleading: The “$700,00 operating loss” he trumpets at the “hockey arena” includes a $500,000 investment in the purchase of a half-interest in the hockey team, and the remaining $200,00 operating loss includes not just the arena but also the off-site theater, the Performing Arts Center. Read the story in trhe Reading nespaper for the real facts.
    But I suppose it’s easier to call someone names than actually make an honest argument.

    • I guess the question is–why is a municipal authority buying half of a hockey team? The answer probably is that the hockey team is losing money staying in Reading, so now the authority is on the hook for half the operating losses. That might be a question worth exploring!

      The plan to do better by “doing better” isn’t very inspiring from a policy standpoint. There are clearly a lot of needs in that arena and not enough money to pay for the upgrades, and without more people buying a lot more hockey tickets and buying more food, it won’t change.

      The numbers on Kansas City’s arena are correct. its “operating profit” is far lower than the cost of construction bonds. Which just goes to say that these “sure thing” developments are far from a sure thing. Yes–you have to take a look at the whole picture of downtown Kansas City, but that’s not a sustainable economic plan.

  4. Jon,

    Most people living in South Whitehall live in South Whitehall so that they’re not in Allentown. It’s not a sustainable political solution to say, “merge your tax base with them,” when these people specifically don’t want to be there. Sure, there are a lot of services that would be better off at the county level, like policing, but this idea that political subdivision is arbitrary and should be eliminated so the city can grow is dangerous and unworkable. South Whitehall, Bethlehem Twp, Palmer, Hanover, these aren’t small little townships, these are old, big townships, with established infrastructure in almost all of their areas. They’re not going to merge with someone else now, why would they? There’s more people in these places than the three cities. This means they have to get at least equal accommodation.

    • Actually the tax revenue from NIZ real estate taxes won’t be as high as you might think – $5 rents don’t translate well into valuable real estate. Add to that the deep holes Allentown has (pensions, obsolete infrastructure, ongoing expense items that were grant-funded with grants ending, continuing bad contracts, a waste/energy contract that is just terrible, a school district that has been so poorly run for decades and has unique challenges on top of that, etc.) – they’re going to need every nickel and then some, so much so that I think it’s still a net loser for the suburbs is we regionalized.

      Poaching also remains a problem even with a regionalized base – if Allentown is successful at sucking the business life out of Emmaus, how does regionalizing make for a better Emmaus? It’s just a deep a hole.

      • Jon Geeting says:

        Emmaus is going to continue attracting residents and businesses because it is already a very nice area. If tax rates are equalized throughout the region, I think you would expect the places that already have natural advantages like Emmaus and Bethlehem to see more demand. The exurbs that exist mainly because they were able to lure people with ultra-low teaser tax rates are going to be worse off in the short term, but as the bills for infrastructure maintenance come a cropper, it’s a good deal for them. Ultimately, I would expect Lower Mac infrastructure maintenance to be a bigger drag on the regional tax base than Allentown’s legacy obligations. It’s all a big mess. Better to pool the risk, get the better bond rating that would come with a bigger tax base, and start acting like a region.

      • Jon Geeting says:

        Also, it’s not like it’s going to be $5 rents forevermore. At some critical mass, the demand is going to be organic and self-sustaining, and they won’t need $5 rents to lure business tenants. The cluster itself will do the luring. At some point rents are going to rise as vacancies decline after the initial round of construction.

  5. Jon,

    Your argument makes no sense. There are plenty of reasons why a person would want local governance. Here’s one: if the citizens of a small town like Emmaus pool resources to get a few policemen (say a force of 15 for a town of 11,000) and they pay a police chief to make sure those policemen patrol the town–they can assume that they have excellent responsiveness (small land area) and high accountability.

    If they would send less money to a “regional authority” headquartered in Allentown–maybe they get the same level of policing, but maybe they don’t. And they certainly don’t have as much of a vote in where they go and when. And when Allentown is perceived to be run by a bunch of self-interested empire builders, you can see why towns aren’t lining up to “trust” the big boys.

    Maybe Lower Mac’s infrastructure costs will be higher, but since Allentown has infrastructure too, I kind of doubt it.

    I think you have a puzzling idea of what motivates people. I think many Americans are very motivated to buy a house at an affordable price–taxes are a part of the equation but not the decisive one. We can argue about the merits of that kind of lifestyle, but it seems sometime like you just want to label your own economic preferences “logical” and consign everyone else to “illogic” I guess. That’s not a way to win an argument.

    • Jon Geeting says:

      That’s a good description of why the concept of hyper-local policing is politically popular with voters, but I think it’s wrong on the policy merits for several reasons.

      One is that it’s more expensive to have more than 55 municipal police departments in the Lehigh Valley than to have 2. Consolidating back-office administration is a no-brainer.

      Another is that criminals don’t respect municipal borders. Having so many departments creates information problems, prevents better use of statistics and data to fight crime, and generally prevents better coordination between police departments in different jurisdictions.

      Lastly, a bigger department would achieve more professionalization. In a larger department, officers can pursue more specialization in their areas of interest, there are more opportunities for promotions, they can take more time off for training without anyone having to worry about the department being short-staffed, and most importantly, a larger department is going to be better at deterrence.

      From what we know about how deterrence works, I do not even think Allentown really needs the 300 officers that people are saying it needs. It probably needs 300 officers *for a few weeks* to flood the zone, ratchet down the number of offenses, and tip the city to a low-offense equilibrium which can then be sustained with a smaller number of officers. But currently, there is no one with the power to send 100 more cops into Allentown for a few weeks and tip the city to a lower crime rate. That kind of coordination does not exist.

      So I think there isn’t really a question as to whether one or two regional police departments would do a better job of actually controlling crime than 50+ small police departments. The issue is politics. I am sure that many voters are telling themselves the same story about response times and local accountability that you are telling, but I think that story is wrong. I also think the idea that voters, not criminal justice professionals, know best how many police officers should be in their borough every day is mistaken. How many officers are in the borough should depend on how many crimes are being committed there. What voters are really paying more for with these hyper-local police departments is a very expensive security blanket. It doesn’t really work, but it feels good.

      That is why I am arguing that hyper-local governance is a luxury that needs to be reexamined in a time of tight budgets and tougher competition from low rents in Allentown. Wasteful and redundant “feels good” policies have become a lot more expensive, and I hope that we will see municipalities abandon them in favor of regional options.

  6. Did you all see Allentown countersued Atiyeh?

  7. First, unlike many, I don’t think Allentown is going to siphon many businesses from the suburbs. If you own a medical office building, for example, you want to be near your customers. For now, populations in the suburbs remain stable and wealthy, and why would medical professionals want to move away.

    I do think Allentown will become a more competitive market for firms that, for whatever reason, want to be in a city–at the expense of Bethlehem and Easton.

    I guess I don’t see your idea of representative governance. We have independent communities established within Pennsylvania law. Some choose to have and pay for their own police departments, some cities between 106,000 and 107,000 people choose to build hockey arenas with tax dollars. What’s not to like?

    Of course people want an “expensive security blanket”. That’s a primary reason they pay taxes. Cops don’t just arrest people, but their patrolling and visible presence help deter crime as well. Or perhaps you’d prefer to live in a community where the cops don’t respond to robberies unless the thieves are still in the house. It might also be cheaper to have a “regional fire department” until its your house on fire–then you like the idea of “wasting” money on a local fire department.

    Please do cite for us the “criminal justice professional” who believes a few-week police operation will “ratchet” down the problems of center city (the appended article is not convincing in its use of the thesis statement “cuz I say so”). Please. And why exactly is the “response time” angle wrong? Are you disagreeing that vehicles move a shorter distance faster than a longer distance? Please explain.

    I’m very pro-Allentown and want to see this city come back, but this argument makes no sense at all. It is ALLENTOWN that can’t pay for its police, but Allentown doesn’t have to do anything to lower its costs because that would violate the “rights” of a police union or affect its ability to pay for a hockey arena. Instead, the communities that CAN pay for their own police and DO should give up what they have because of “cheap rents”???

    • Jon Geeting says:

      “What’s not to like” is that it’s a bad value. A regional police department could provide the same services at the same quality for cheaper, but people like the more expensive way because it makes them feel better – even though voters have no specialized knowledge of policing or crime control.

      Here’s another article on my point about deterrence, and another. You should also read Mark Kleiman’s book When Brute Force Fails. Hawaii has applied Kleiman’s model with great success, and now several Republican governors are pursuing similar changes to their criminal justice systems.

      The response time issue is silly because of how small the communities are. There’s no reason you need a Nazareth police department right next to Bethlehem Township’s police department, right next to Bethlehem’s police department, right next to Freemansburg’s police department. My personal preference would be County departments, but I see no reason that response times would suffer with a Greater Bethlehem police department. It’s not like all the cops are going to sit in an office in Bethlehem waiting for people to get robbed. You’re just going to have more cops near where most of the crime happens, and other cops will continue to patrol as usual. If people really want a security blanket, they could pay more taxes for additional beat cops, which they could afford because they’d be saving money with the regional department.

      Please explain what you think Allentown could do to lower its costs. I have yet to see you grapple with the structural problems PA’s municipal finance system creates for all older cities and boroughs.

      • Jon,

        You still aren’t answering the key question, which is accountability. For good reasons or bad, people trust their boroughs and townships. Is it worth a premium to get “local control” over police–some would say yes? Especially when control of the force would be centered in the city (with a “county” force or not)–it is likely that the votes of your Emmaus or Northampton borough voters are going to be severely diluted.

        Neither of those articles really address why a smaller community in Pennsylvania would or would not want to have its own police force. I got it–partnering with the population in high crime areas is what works. To my knowledge, Newport News and Boston didn’t take the police of small suburban towns to make their efforts happen. So why should Allentown?

        You simply state that “a regional force could provide the same services more cheaply” but offer no evidence but your assurances. Since obviously some “overhead” is going to be cut, and since you state that “resources” would have to be moved to higher crime areas, it might be logical to assume that ‘resources’ will be moved from the boroughs and townships to cities. And maybe that’s not what people want.

        We had politicians and journalists pushing for the construction of a baseball stadium (no proven economic impact) because it would support “civic pride” but when folks say they’d like to have a controlling vote in what their local police are up to or how they prioritize their activities this is just pointless “feel good” stuff. That I simply don’t understand.

        What can Allentown do? Well, googling “Allentown Police Union Contract” indicates a particular problem with how civic unions put a stranglehold on city budgets. Allentown might want to see if its balance of pay, longevity, and pensions is the right mix to staff its force. Allentown can revisit the standards of work and appeal in the contract. And maybe Allentown could pay for neighboring communities to police farther flung areas of Allentown so that the force can concentrate on the center city area–which removes the need to blow the pension budget hiring a relatively small number of cops. None of this the police union would like, which would suit many just fine.

        Would Northampton and Catty perhaps benefit from sharing services? Perhaps–but these are adjacent communities of similar size

        • Jon Geeting says:

          Ok, but that’s my point about the trade-off: paying a premium for hyper-local control vs. cheaper regional services and ducking any problems with the NIZ.

          You still aren’t addressing the points Gerald Cross makes in the testimony I linked you to. It brings up key questions about regional economic justice that I do not think you are understanding. His point is that there is a predictable *structural* decline in core cities’ revenue all throughout PA that has less to do with market choice than bad institutional design.

          How much value should we assign to a township’s “choice” not to share police revenue with Allentown, when we know that the townships have more revenue in large part due to the state’s institutional design of municipal finance? The state creates municipalities just as it creates political districts for Congress. We should be looking at the state level to see whether the municipal finance institutions are producing an economically just outcome for marginal populations.

  8. I don’t really know how you weigh risk vs. gain. I’m not denying that regional policing would be cheaper, what I’m saying is that some folks/communities would prefer the tradeoff. This isn’t just a symbolic choice but one that has real ramifications for communities. So paying more may “cost” more financially but could lead to the results desired.

    I thought the testimony was fine. Sharing services where possible is a good idea. However, to give a sense of what the real problem might be I would highlight this statement:
    “Expenses tell another side of the problem, when adjusted for inflation, spending in the cities and boroughs nearly doubled since 1970, expenses in the townships of the second class rose nearly over 330 percent.”

    This strikes me as a classic misquoting of statistical data. If you have a second class township that was 3,000 people in 1970, but is 15,000 people today (of average or above-average tax paying ability), tripling your expenses is both expected and reasonable. However, few of the cities in Pennsylvania have grown at all, and none have doubled, yet–after inflation is accounted for–real spending has doubled. So why exactly is that?

    I try to avoid terms like “economic justice” when discussing policy matters because such terms tend to indicate a desired policy choice rather than a desired outcome. In your case, you want money to flow to Allentown without any oversight or accountability in a tax arrangement unique in the Commonwealth. I would say the proper focus is lowering expenses commiserate with revenues and working to raise the tax base.

    • Jon Geeting says:

      I think the safety and economic gains to cities would far outweigh the small increase in risk you think there would be in the townships. The trade-off needs to be evaluated at the regional level, not the municipal level.

      I would guess that one of the main reasons spending in cities doubled is because as those areas’ tax bases were gutted and they became worse places to live, they absorbed more high-need residents who used more social services. They also had to repair older infrastructure, which migrants to the suburbs made use of when they lived in the cities, and then left those cities with the cost of maintenance – again, paid for with a smaller tax base of lower earners.

      Bad labor contracts is another problem, but I wouldn’t name that as the major contributor. I’m all for less generous public sector benefits and pensions, but a lot of it is legacy costs that you can’t reduce without breaking contracts. Should the current residents have to bear the brunt of those past decisions alone, or should the region pick up some of the tab?

      That’s where politics comes in. This isn’t some clinical policy discussion. Whatever you think the merits of little box government may be at the micro level, I think its clear that this policy framework has left a lot of people out of the benefits of the macro region’s growth. That’s a political problem and it requires a political solution. But the current political institutions do not have the capacity to address regional problems, and suffer from both Prisoner’s Dilemma and Principal-Agent coordination problems that could not produce a more equitable outcome even if voters wanted that.

  9. The problem with this approach is that it presupposes that the entire challenge is money–so given proper input “X” from the suburbs (who have somehow unjustly gained from “subsidies” at the expense of cities, who apparently get no “subsidy” at all) problems will be better.

    Time to get to brass tacks, I think.
    1. The expected Allentown civic pension contribution for 2015 is 20 million dollars, a full 25% of the city’s budget–which the mayor called “burdensome” and “crippling”. The civic workers of Allentown are working for an entity that in the private sector would be going out of business. Do I think that the contracts should be broken? For a city in severe financial distress, I would say probably yes! What’s the “regional” component of this? Why don’t we take a look at the pay and benefits of public safety workers in the region and see if Allentown is getting value for dollar. If not, first move to Allentown.

    1a. I would also point out that if your “regional” model were to take effect with Allentown’s pay and benefits as the baseline, everyone would be going bankrupt.

    2. Allentown’s own EIT has not gone up much over the years, and remains lower than Easton’s. So why are you taking other city’s money? Oh right, for the “regional benefit” of minor league hockey.

    3. If you want to do an experiment with an NIZ, and the state makes up the EIT payments to the towns, that’s one thing, but the way you advocate for this makes it seem like a punitive crusade. But the idea that there wouldn’t be a regional economy without a large Allentown pushes credulity.

    4. I don’t think your regional approach answers much. Countries that do have regional planning and/or centralized budgeting like the UK, France, and Germany all have similar challenges as Allentown’s with mid-sized cities with declining cores, impoverished populations, and continued loss of commerce. They’ve tried fancy building projects too, and sports stadia, etc. Maybe the problem is the very nature of post-industrial mid-sized cities?

    • Jon Geeting says:

      I would say that most of the challenge has to do with money, yes. I think conservatives have elevated the “can’t just throw money at the problem” talking point to a religious truth, where no problems can ever be caused by too little money. Sometimes the problem is not enough money!

      If Allentown had more money, they could afford to hire more police, provide more and better public services, etc. I really do think the primary problem is state municipal finance laws that rob core cities of a more equitable share of the revenue produced by the *regional* economy. Whether the problem is money or public services, but at base, cities don’t have the resources to deliver the public goods and services that would help them compete with suburbs for wealthier residents.

      I agree with you on pensions. If there’s a legal way to break legacy contracts for distressed cities, I’m all for it. In a regional tax base, pay and benefits would of course be left up to politics, but I’m closer to your position on this than some of the liberals who seem to think enriching service providers is the be-all-end-all of the local level progressive agenda.

      • I don’t doubt that Allentown could use more prosperity, but I’m not sure about the money.

        Back-ended compensation deals are the bane of civic finance, because they allow today’s politicians to lie at the expense of tomorrow’s taxpayers. Hiring more cops at today’s prices actually makes tomorrow’s problem worse by expanding the pension bill

        I’m not an expert on public service pensions, but I seem to recall Allentown kicked the can down the road on starting defined contribution pensions. As a distressed city, they do have some latitude to break some of these deals, but I don’t know how much.

        A brief look at the budgets would indicate that in 3 years Allentown will probably spend more of its money on pensions then all of its major road maintenance projects combined (they do get money from State and Federal sources). So while you are right that some things in Allentown suffer from lack of money, the lack is caused by spending too much money on the wrong things.

        EIT on the whole just seems too small-bore to really make much of an impact, but when the city is diced up in several different tax-relief schemes, instead of having low, consistent, uniform rates citywide, they don’t have many options.

        • Jon Geeting says:

          Yes pensions are a big deal, but even without the pensions obligations, Allentown is clearly not receiving an equitable share of the revenue produced by the regional economy.

          Look no further than Parkland School District and Allentown School District. That’s a pretty extreme example of segregation within a region, immorally so in my view. That’s a clear case where a more progressive distribution of taxes and public services within the region would have a real impact on higher income white people’s willingness to live in Allentown. The fact that the segregation exists tells me that the current municipal finance system, and the small political jurisdictions that justify it, is morally unacceptable.

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