Studies in Fiscal Federalism and State–local Finance series
Edited by Dick Netzer
Chapter 4: The influence of local fiscal structure and growth control choices on 'big-box' urban sprawl in the American West
4. The inﬂuence of local ﬁscal structure and growth control choices on ‘big-box’ urban sprawl in the American West Robert W. Wassmer 1 INTRODUCTION Though forbidden to raise property taxes, [California] city governments do get sales taxes from stores. Result: what’s called ‘ﬁscalization of land use’, meaning a wild scramble for retail base especially for mega auto malls and big-box retailers. The result’s not just more suburban sprawl, but real ugliness, what California urban planning expert William Fulton describes as ‘sales tax canyons bleak relentless [zones] designed not to encourage or facilitate community, but simply to empty passing wallets’. (Peirce, 1998) This quotation, by a newspaper columnist represents what some observers in California and other states believe is a cause and eﬀect relationship that generates profound social consequences. Municipalities that rely on local sales taxes for the provision of local services seek taxable retail sales not only for the consumption needs of their citizens, but also for the discretionary ﬁscal surplus it yields. Such local governments seek out new retail stores and draw retail sales away from central places in a metropolitan area where economics would have naturally caused such retail sales to occur were it not for local sales tax reliance. In policy discussions this issue has received increased attention due to the claim that this ‘ﬁscalization of land use’ contributes to urban sprawl. Salient to the motivation of this chapter is that all of this has occurred with little to no empirical evidence regarding the importance...
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