Ellen Smith for Oak Ridge Rotating Header Image

Where will the money come from?

citybillThe second question from the Progress PAC was about generating revenue for city services and schools.

Question: What is your plan to generate additional revenue to support or enhance city and/or school services? Give at least two specific examples.

My response:

1. At this time, it is critically important for the city to attract a new generation of residents to take the place of the city’s founding generations – and repopulate the homes and neighborhoods that they are leaving behind as they depart the scene. In particular, we need new residents who have both the financial capacity and personal interest to support our city services and our excellent schools. Success in this will require a coordinated strategy with many parts. To help ensure a successful strategy, I believe the city needs to get started with a third-party marketing study aimed at finding out what today’s younger generations are looking for in a community, why people who have located here recently have chosen Oak Ridge, and most particularly why some people who work here don’t live here. All of us have anecdotal information and pet theories on these topics, but I’m not aware that anyone has solid data. Consulting studies have a bad reputation (and, no, I don’t know where the money will come from to pay for this one), but I believe this is a study that we can’t afford not to do. It should go without saying that the community will need to follow up on what we learn from the marketing study, both with promotional efforts and with measures to enhance the attractiveness of the community.

2. User fees alone will not provide all the additional revenue we need, but they can help recoup the costs of certain city services. In particular, by asking people who don’t live in the city (or own businesses here) to pay higher fees for use of recreational facilities and services (such as summer camps) that are heavily supported by city property tax, the city could help people recognize the potential benefits of living here. (Note: User fees have been increased in recent years, and there are nonresident fees for some recreation programs, but the nonresident fees do not come close to compensating the city for the costs of serving nonresidents.)

3. I believe the city should renew its efforts to get the U.S. Government to fulfill its obligations to the community for the special burdens imposed on the city as an “atomic energy community.” Not only does Oak Ridge deal with the historical legacies of the Manhattan Project and Cold War, but it continues to host a huge industrial complex that pays very little toward the community services it depends on – much less the unique costs and burdens of hosting that complex. A new initiative to obtain more federal support is not going to be quick and easy – a meeting with Energy Secretary Ernest Moniz to ask for higher payments in lieu of taxes (as proposed by some Council members) will not accomplish the goal and might in fact prevent success in the long term.

4. Sooner or later (and probably sooner), the city will need to raise the property tax rate to help keep up with inflation. In view of the stagnation of middle-class incomes (real median household income, here and elsewhere, is still below pre-recession levels) and the adverse effect of the tax rate on marketing of the city, this won’t be an easy decision, but the city and schools can’t do more with less forever.

5. Oak Ridge should support federal and state initiatives to collect sales tax on online and mail-order purchases and distribute the proceeds to the purchaser’s local jurisdiction(s). As a customer, I don’t look forward to having sales tax added to the cost of my online purchases. However, I think this is needed for fairness to brick-and-mortar stores and I expect that Oak Ridge will benefit from the additional revenue.

6. Finally, the community (both city government and the private sector) needs continuous efforts to recruit new business and industry and to support the success of existing businesses that contribute to the local economy, as well as our tax base.

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  1. […] to stimulate investment in housing. The marketing study (and its followup) that I mentioned in response to question 2 is an important step toward building demand for housing in Oak Ridge. Increased investment in […]

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