In poll after poll, Americans express overwhelming support for protecting
green space. Yet, year after year, we pay developers to pave over these precious places.
Not only do we lose key habitat, storm buffers and natural places to recreate and relax,
but we're paying for it through higher taxes. In 1998, voters passed 70 percent of a
record 240 smart-growth initiatives on state and local ballots. That year, voters also
approved over $7.5 billion in new funding to protect open space. And this trend shows no
signs of dying out: In March, California voters approved the biggest open-space bond
measure in state history.
Many Americans would be shocked then to learn that as we fight to protect
these precious open spaces, millions and perhaps billions of dollars are being given out
by state and local governments to encourage their destruction. Why? Because state and
local governments are playing a cynical shell game of incentives to lure development to
It works like this: Big corporations promise towns and cities development
projects that will create lots of jobs. All the community has to do is pony up some money
in the form of undeveloped land, tax discounts, sweetheart utility deals, massive road
projects or even straight cash. And, since most communities feverishly compete against
each other in this giveaway game, companies shop around for the best deal.
All this would make sense if these pay-outs benefited our communities.
Unfortunately, this is rarely the case. Many times the promised jobs don't pan out. Even
if they do, the tax-breaks and incentives lavished on the businesses frequently undercut
any economic gain-especially in the case of subdivision development, which usually results
in a net loss of revenue for communities.
And then there are the environmental losses. Wetlands, for instance, store
and then slowly release flood waters, cutting the damage from massive downpours. Paving
wetlands over or plowing them under increases the risk of flooding. Floods have killed
almost 1,000 Americans over the past 10 years and damage has cost us an estimated $45
billion. Communities that preserve wetlands and flood plains tend to fare better during
Wetlands also act as natural filters by removing toxins from the watershed
before they reach streams and rivers. And they serve as habitat for a wide range of
species. Despite the critical importance of wetlands-and the economic benefits of
protecting them-we are still destroying well over 100,000 acres a year.
A recent U.S. Department of Interior report highlighted 42 federal
programs that subsidize wetland destruction. Just seven of these programs cost an
estimated $7 billion a year.
Other types of open space are also valuable. Forests cleanse the air and
soak up global-warming gases. Parks and open spaces provide aesthetic and recreational
benefits that are hard to calculate but easy to miss.
Unfortunately, not only are we losing these crucial open spaces and paying
a steep environmental price, in many cases we are actually paying developers to destroy
Paying to Sprawl
One of the most expensive cases of paying to sprawl is unfolding in New
Jersey's Hopewell Township. The Merrill Lynch corporation was promised well in excess of
$200 million in subsidies to help build a massive office park on mostly undeveloped farm
and woodland. This project, which will chew up 450 acres of open space, is inaccessible by
public transportation and far from shops, homes or stores. Due to its location in a mostly
rural area it is sure to increase sprawl.
The subsidies offered read like a sprawl wish list: $77 million for road
improvements and $24 million for an eight-mile sewer line-not to mention $135 million for
equipment and an $8.3 million dollar sales tax break. Yet all these subsidies haven't
guaranteed that Merrill Lynch will keep its workers in state. In fact, the company
recently announced plans to cut 800 jobs from its New Jersey workforce.
This is not an isolated case. Wisconsin's Commerce Department has more
than 50 incentive programs under its purview, and over the past 13 years has handed out
more than $1 billion worth of incentives. Breaking down these incentives geographically,
we find that Milwaukee's suburbs rank as the second biggest recipient of incentives at
Yet despite the billions of dollars communities spend trying to attract
jobs and businesses, these subsidies often play only a marginal role in where companies
choose to locate. When corporations decide to move, they tend to look more at factors like
the quality of the labor force and the region's overall quality of life. This is the
ultimate irony of the subsidy game: Taxpayers in existing cities and towns are paying
through the nose to attract or keep companies, yet those same companies are still likely
to thumb their nose at a community by moving elsewhere.
Chief executives and top managers at 118 foreign-owned companies with
operations in North Carolina were asked to rank the factors that influenced their decision
to come to the state or to expand operations. For the period between 1997 and 2006, North
Carolina has committed more than $1.72 billion in tax relief and business incentives to
attract and retain companies. But in the survey, executives said that the quality and
availability of labor and transportation, the overall quality of life and the general
business climate were the most important factors in their decisions. Tax incentives,
location assistance from government agencies, government financing efforts and state
marketing assistance ranked at the bottom. (27)
Despite this evidence, elected officials across the country describe
incentives as a necessary evil and make it eminently clear that they won't be the first to
lay down their arms in the competition for jobs and businesses. So officials in Columbus,
Ohio, didn't blink when asked to help finance the development of 6.2 million square feet
of retail space in outlying areas like Easton, Tuttle Crossing and Polaris.
Likewise, Jefferson County in Colorado didn't hesitate when
multi-billion-dollar corporate giant Gateway Computers asked for hundreds of thousands of
dollars - even though it would contribute to the sprawl already eating up the potential
host town of Lakewood. Charlotte, N.C., gave the nod right away to a demand for $161
million worth of tax incentives to build a new plant in a neighboring rural community.
(28) And, in Pennsylvania, Allegheny County officials are more than happy to provide over
$20 million in tax financing for Deer Creek Crossing. (29) This will facilitate the
construction of 243 acres worth of retail space on an undeveloped area that includes
almost seven acres of valuable wetlands.
There is an alternative. We must demand that local officials consider the
true costs of development deals and we must push for businesses to pay their full, fair
share of these costs. Only when we end the hidden subsidies that pay for sprawl will we be
able to break this destructive cycle.
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