It means that when you look at government revenue vs expenditure per square mile, urban dwellers are massively subsidizing surburbanites. It's mainly because maintainence of roads, parking, and utilities for a spread-out surburbia is vastly less efficient than it is for a tightly packed city.
And by people who live in urban areas who don't get the benefit, since they also pay property taxes that are sufficient to pay for their infrastructure. It's a subsidy for the suburbs.
I hear you, and I've seen these videos and claims around, but I don't believe them. They don't make sense. I've seen the public financial statements of my suburban county (which, again, has no big city in it), the average income and funding source of roads, schools etc in my county/state.
The numbers don't add up to the city subsidizing the suburbs - quite the opposite instead. The rich suburbs pay a TON in state, local and federal taxes. So while I suppose it's possible that the cities pay relatively more than they should in the road construction category, all other categories are subsidized by the suburbs on a per capita basis (roads are just a small fraction of overall state expenses, which are dominated by health services and other type of welfare vastly subsidized by the richer suburbs).
Interestingly, this just reminded me of the situation in a nearby county that includes both a large city in a wealthy suburb. The suburb at one point wanted to secede from the city and create their own county because of the massive transfer of funds within the county towards the city.
It's a subsidy for all mortgages. More people would rent if not for this subsidy. Also any roady that connect your suburb to anywhere are heavily subsidized, to the tune of greater than 60%. If your suburb build its sewers with bonds, they too end up receiving various forms of subsidy. It would be truly unique in the whole of the US if your community's property taxes covered the full cost of local services and weren't partially covered from the state's general fund.
The source of the surburban wealth is the city. Proximity to the urban core is the resource used to acquire that money. Those people work high paid jobs or own businesses in the city, then pay their local taxes to the surburb where they live. So the surburbs have better schools etc because of money extracted from the city.
> many area businesses are located in those surrounding suburban counties, with only small offices in the city
I understand why you'd have this impression and in some very exceptional cases it can be true. But look at the gross product of the different counties in your area, not personal income. I doubt this assessment holds up.
Who is doing the subsidizing? You hear about cities annexing suburbs to access the tax base. If suburbs were a drain, wouldn't they be doing whatever the opposite of annexing is?
There is an article someone wrote which roughly titled 'why your city is poor'. There answer was that the tax and service revenue needed to support the long infrastructure is about 20% of needed. And it's a big deal because families are paying $1000/yr when they need to be paying $5000/yr.
So suburban cities are living off depreciation of those long term public assets.
If state and federal governments didn't subsidize suburban infrastructure, cities would directly. The broader infrastructure network is vitally important for urban areas, and the suburbs especially are essential to retain the workers needed for productivity. Framing this as cities being exploited by greedy suburbanites is just wrong.
In America the "poor" inner cities often produce a tax surplus, which often subsidizes the "rich" suburbs infrastructure. Economic activity per public dollar needs to be a measure that we judge our cities by, not just total output.
The headline relies on a definition of "cost" I do not accept.
Cities will get less tax income, sure, but their outlay is also less. Their actual costs could be radically reduced by changing zoning laws to enable residents to live near their place of employment.
If the tax base is too small for parks, it's also too small to pay for the street/road infrastructure, and that's being subsidized by people outside of the community. If a community can't afford basic infrastructure (which should include parks), it isn't zoned to be dense enough.
I've watched that video and seen it quoted a fair number of times, but I don't see how it jives with the reality of tax collection and spending - at least in my area of residence (ATL). I'd love some hard data on how the city is subsidizing the suburbs.
Instead, the recent trend has been that wealthy areas near downtown (e.g. Buckhead) have been trying to incorporate so that they're no longer subsidizing the rest of the city.
Yes, a significant amount of tax dollars come from cities and are funneled to suburbs/exurba via "grants" and other subsidized funding methods, which urban areas don't get the benefit of receiving.
Show me the line item on a bedroom community city's budget that says "subsidy from self-righteous city dwellers who don't realize the employees of the companies that pay taxes to the city commute from suburbs".
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