Gas and Cigarettes and Addiction Funding

25 05 2012

So here’s an interesting problem for students of how cities operate.

Public health and public transportation are two of the marquee issues for planners, and they’re intertwined. Land use planners have recently turned towards policies that encourage walkability, bikeability, and “transit-oriented development.” Mayor Emanuel’s administration is currently undertaking an impressive, ambitious plan to introduce more than 100 miles of protected bike lanes, of the type found on Kinzie Avenue between Jefferson and Wells. Decreasing reliance on cars is a public health issue because it makes it easier for people to be active, and decreases vehicle emissions that pedestrians encounter as they move around the city. Similarly, the Affordable Care Act had provisions for public/private community health facilities with a focus on patient outcomes rather than fee-for-service models that merely encourage remedial care.

Two of the main sources of funding for public transportation and public health (particularly as the latter is undergirded by state Medicaid) are gasoline and cigarette taxes, respectively. You can see the immediate problem; the better transportation and health systems are designed, the more they must compromise the source of their funding. With transportation, this creates the most immediate problem: with increased volatility of gasoline taxes and a sharp increase in ridership, ill-equipped public transportation systems need more and more money to handle the increase (the fares are never enough to capitalize increased infrastructural capacity).

A brief by the American Public Transportation Association touches on this problem; as public transportation ridership increases, capacity needs increase even while revenues drop. Because fares will never be sufficient for real expansion of capacity, there’s a systemic knot that can’t be untied without a federal-state-local approach to overhauling the funding system.

Obviously, there’s a similar problem with the vice-and-obesity taxes on things like cigarettes, alcohol, and fast and junk food. Where these revenues are meant to fund necessities–community health care in particular–the fact that the tax exists as a “disincentive” to unhealthy decision making implies the outcomes we want–healthier city living–are not really priorities. The addiction persists.

TIF for That: Comprehensive TIF Reform Coming to Chicago?

23 08 2010

State Representative John Fritchey, who will be giving up his seat in the state house representing the 11th District to replace Forrest Claypool on the Cook County Board of Commissioners (assuming he wins in November), is teaming up with the Chicago Teachers Union and the Raise Your Hand Coalition to push comprehensive reform of the tax increment financing, or TIF, program. The reforms could end the exploitation of TIFs by the Mayor’s office as a cudgel, and restore significant funds to taxing bodies–particularly the schools–that have seen billions of dollars disappear over the last couple decades.

Tax increment financing was created by state statute in the 1970s as a way to provide incentives to develop blighted areas. TIF areas are designated by municipalities; within those areas, property tax assessments are frozen at the level they were at when the zone was designated. The land is still assessed and the taxes on the increase are still collected, but they are diverted into a site-specific fund rather than being paid to the various taxing bodies that typically collect them. Those bodies are, primarily, school districts, counties, the municipality itself, and sanitation and fire districts, among others. The idea is that without the incentive, that tax money would never have been raised in the first place, and so those taxing bodies are not actually losing anything.
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