Monday, March 21, 2011

Which cities should go the way of the dodo?

As we're discussing overall tax structure and finance options for cities, I thought now was an appropriate time to post the following report. Strong Towns, a grassroots non-profit, writes on issues concerned with the way American, and in particular Minnesotan, cities have developed and grown. They write most specifically to issues regarding finance and land-use decisions. They present a balanced approach to issues, (as two of the primary staff "sit on opposite sides of the aisle") and raise some interesting questions on the sustainability of America's towns.

In their report, "Minnesota's Most Vulnerable Cities", Strong Towns rated Minnesota's cities regarding their reliance on local government aid and their "mix" of revenue streams. The report illustrates the following:
"If state and federal aids disappeared tomorrow, and citizens wished to maintain the same level of services, how large a property tax increase would be required? How vulnerable are communities to federal and state revenue reductions?"(1)

The list ranks cities in order of those that would have the most dramatic increase in property taxes, their primary source of revenue, and therefore, somewhat simply, showing which cities are most reliant on government aid.

From this discussion a fascinating question is raised: "Are there cities that should no longer exist?" There are cities that have "had their heyday" but are no longer productive, or serve the same industries on which they were created. (ie. some of the Iron Range cities, or, imagine if Minneapolis still relied only on milling for industry). Populations in many cities are declining, therefore so is the tax base, yet the cost of services continue to increase, as well as the quality and quantity of services expected.

With budget deficits rising and revenues falling, decisions more controversial than what services to cut or how much to raise taxes may need to be put on the table. To what degree will we, or can we, continue the level of subsidy to certain areas that is currently provided?

Info on Strong Towns below:

The mission of Strong Towns is to support a model for growth that allows America's towns to become financially strong and self-sufficient. We’re a nonpartisan, nonprofit organization advocating for a new model of development that allows America’s towns to become financially strong and self-sufficient. Visit Strong Towns online, on Twitter, and on Facebook.


  1. The list is striking! A number of cities will have to more than double their property tax rates to be solvent. The most extreme case, Landfall, will need to increase its property tax levy by more than 10 times.