Monday, August 06, 2007
 
Ailing Retail Development Holds No Lessons
In St. Ann, a municipality in northwest St. Louis County, its sales tax mainstay is not providing the tax revenue it used to:
    When Northwest Plaza gets a cold, St. Ann sneezes.

    Northwest Plaza is ailing right now, and St. Ann's finances are following suit.

    The city depends on sales taxes from the shopping mall for a big chunk of its revenue, and sales at the mall have been on a steady decline since 2000.

    "We are extremely sales tax driven," said Mayor Tim James. "When that money goes on hiatus, which is what we are hoping, and not gone for good, it really shakes things up."

    Since 2000, the city has reduced its work force to 92 from 112 and has begun charging residents for garbage pickup that used to be free. But so far, the city has kept up appearances. Potholes are being fixed, and the streets are being patrolled.
Ah, yes, the facade of providing core government services instead of blowing scads of cash on a water park that won't break even on an annual basis (like so many of your neighbor municipalities are).

So what is the lesson about this that municipal leaders can learn? Partnering with land developers in crony capitalist schemes to increase your sales tax revenue and then spending that sales tax revenue as though it will continue to grow infinitely might put you into trouble when those sales taxes decline?

Nah; the lesson is thank goodness you're not fools like those people in St. Ann!


- posted by Brian J. @ 7:50 PM
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