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Thursday, July 26, 2012 01:14 am

Fiscalizing land use policy

Good for the City of Springfield, yes, but for the city?

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“People,” goes an old political adage, “vote their pocketbooks.” That goes for people in elected office too.

A diligent reader attended a Springfield Park Board meeting at which the Griffin Woods decision was discussed. She noted that none of the officials involved seemed to want to stand in the way of the new Schnucks store on that site, because it is seen as an opportunity for Springfield – even though very few people in that area need or want another strip mall or another grocery store. Whence this contrariness?

I know what I see when I see a strip mall, but I suspect that to many an alderman it looks like a goose sitting on a nest of golden eggs.

Springfield’s aldermen are not, in the strictest legal sense, servants of the people of Springfield. They are servants of the corporate City of Springfield, of which they are financial stewards. As such the aldermen generally do their job more responsibly than most citizens do theirs. By that I mean that voters want services but refuse to pay the taxes needed to pay for them. So intractable is the resistance to higher property taxes that an aldermanic candidate would rather promise to impose sharia law inside TIF districts than agree to raise taxes on real estate.

Over the years successive city councils have shifted the fiscal burden of municipal government away from property taxes toward fees and taxes levied on things other than real estate. The single biggest source of money for the city’s general-purpose or corporate fund is the city’s take from the Illinois Retailers’ Occupation Tax of 6.25 percent of retail sales. Of that, 5 percent goes to the state and 1 percent gets kicked back to the city in which purchase are made; the City of Springfield also takes advantage of the law that allows municipalities to impose their own taxes on retail sales. The city estimates that the city’s sales tax and the city’s share of the state sales tax in FY 2012 will bring in something like $52 million, while the haul from the property tax will be only a bit more than $20 million.

Given how dependent the city treasury is on sales taxes, it is little wonder that aldermen are keen to see more things being bought and sold within city borders. They do this by making land use decisions involving retail developments not according to what each might add to the community, but according to how much each might add to the city treasury. There’s a name for this, coined in the 1990s I think by the then-director of the California Research Bureau: the “fiscalization” of land use policy.

It’s rather nice, getting shoppers from small towns for miles around to pay for Springfield’s sidewalks and health clinics. The problem is that, overdone, fiscalizing land use policy becomes little more than subsidizing retail businesses to boost a city treasury. Which is why Springfield is so egregiously overzoned for commercial land uses.

Readers with long memories know that Springfield has always been badly zoned. Planner Myron West justified adoption of Springfield’s first comprehensive land use plan in 1923 as a means to restrain aldermen of that day from allowing some uses “to spread out indiscriminately and without a definite purpose in view.” These days, allowing retail and office building uses wherever developers wish to put them has a very definite purpose in view – paying the city’s bills.

What has been good for the aldermen and the City of Springfield, alas, is not always good for the city of Springfield and the people who live in it. This is the city government version of the principal-agent problem – the interests of the people’s agents who run city government are not aligned with the interests of the people who are served by it. The courts have generally held that departures such as spot zoning from a city’s comprehensive land use plan – which plans are presumed to have been drawn up to serve the larger interest of the community – are illegal if they are done merely to confer a benefit to the affected property owner. The courts have not, so far as I know, considered whether spot zoning is also illegal if it compromises the larger public interest merely to confer a benefit to the spot zoner – that is, the members of the city council in their roles as fiduciaries.

Sadly for those citizens who do not thrill to the sight of a freshly striped parking lot, municipal officials in Illinois are immune from liability for the consequences of official decisions not deemed malicious or malfeasant. As long as the money goes into the city’s pocket and not their own, aldermen who vote to sell the public realm to any and all buyers cannot be guilty of any crime.

Contact James Krohe Jr. at KroJnr@gmail.com.

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