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June 2000 Planet Main
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The Planet
How Taxes Subsidize Sprawl

By Nicholas L. Cain

Imagine wanting to move. You find 450 acres of prime open space in a beautiful, rural area of green meadows and rolling hills. To sweeten the deal a wealthy friend offers you almost $200 million to help you ease in to your new surroundings. Would you make the jump?

Of course you would. And so did Merrill Lynch, who was recently given such a deal - courtesy of state and local taxpayers - to stay put in New Jersey and build a new campus in an undeveloped area.

Most every time a new, sprawling development is built, taxpayers pay the price," noted Deron Lovaas, the Sierra Club's Challenge to Sprawl representative. "New Jersey has sworn to fight sprawl and grow more intelligently. Yet Hopewell Township, where Merrill Lynch is building its new office park, is a symptom of a bigger problem: We are subsidizing sprawl as we try to fight it."

Most Americans have become well-acquainted with the effects of poorly planned growth: endless traffic, polluted air, tainted water and lost green space. What few people realize is that sprawling development is not only destroying the environment, it is draining pocketbooks and raising taxes.

A new report by the Sierra Club, "Sprawl Costs Us All: How Your Taxes Fuel Suburban Sprawl," details the way sprawl is subsidized throughout the United States.

"It's like trying to slow a car down with one foot stomping on the gas and the other foot tapping on the brake," said Kathryn Hohmann, director of the Sierra Club's Environmental Quality Program. "We are subsidizing sprawl both through government spending on things like highways, and as part of the development process itself. Not only does this cost us money, it tilts the playing field to encourage more irresponsible development."

When a new residential or commercial development - like the Merrill Lynch campus - springs up outside of an existing community, roads, sewer systems and water lines have to be extended. As the development expands, it requires schools and emergency services. In most cases, neither the developers nor the new residents pay their full, fair share - the rest of us must make up the difference.

A small county in Arizona presents a stark example. According to the report, Pima County allows "wildcat subdivisions" - where builders are subject to few regulations - to be built almost anywhere. Each new home built in a wildcat development costs the county $23,000 for things like sewer service and police patrols, while contributing only about $1,700 in property taxes. Not surprisingly, this is adding up: Wildcat subdivisions are estimated to cost the county $35 to $55 million a year.

Unfortunately, the subsidies built into the development process aren't the only way the public pays. Federal, state and local government programs also end up subsidizing sprawl.

At the federal level, taxpayers spend over four times as much on new highways than on public transportation. And the billions poured into these roads is all too often an excuse to build, rather than an authentic response to transportation needs.

At the state and local level, the competition to attract business and development - again, like Merrill Lynch's office park - often results in tax-credits and other subsidies that needlessly encourage sprawling growth.

A recent survey found suburban sprawl tied with crime as one of the top national concerns. So why do we keep sprawling? As the Club's report demonstrates, haphazard growth is being fueled by billions of dollars in government subsidies.

Fortunately, there are other options: Cutting the subsidies that feed sprawl to ensure that the costs of growth are fairly shared and employing tested smart-growth techniques. A study of Virginia Beach found that smart-growth planning that protected open space and channeled development into existing communities could save well over $300 million in infrastructure costs while conserving farm land and cutting air pollution by half.

"The environmental effects of suburban sprawl are pretty clear. But the subsidies that encourage it are a largely hidden side of the story," summed up Hohmann. "The good news is that by cutting these subsidies we can protect the environment while saving money and lowering our taxes."

See the full report.

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