Wednesday, July 20, 2005

Spring Hill Has Become Utopia (At Least Until It Becomes A Mirage)

Tennessee Tax Revolt (TTR) sent out an e-mailer yesterday trumpeting the Spring Hill, Tennessee Mayor’s decision to cut property taxes to zero. Rather than being satisfied with just celebrating that good news, they also used that information to connect, once again and erroneously, low property taxes in general to population growth and a town’s popularity.

I have cited evidence over and over and over and over again to argue that people are not primarily attracted to a community strictly because of low property taxes. Some people are. But lots of factors go into various decisions to locate inside and outside cities. I have certainly maintained with good reason that the high demand to live near Downtown Nashville, in spite of its property tax rate relative to outlying areas, shows that there is no necessary or general connection between property taxes and migration into or away from cities.

My guess is that, despite its growth, Spring Hill would not have the capacity to hold the sheer numbers of demands for places to live within the I-440 loop of Metro Nashville alone. If those demands dried up here and shifted to Spring Hill, that municipality might be overrun and services taxed to the point that avoiding tax increases would no longer be an option.

But how is it an option now for the Spring Hill exurb? Well, the TTR PR material is not entirely honest about the Spring Hill zero tax rate. Because of their growth (which may or may not have to do with property tax rate), Spring Hill qualifies for over $356,000 in state-shared revenues. “State-shared” means that the state is going to share Tennessee revenues collected from taxpayers statewide to further fund Spring Hill’s growth. Taxes are still going to bankroll services in Spring Hill; they just won’t fall exclusively on the backs of property owners there. Those revenues make up quite a chunk of $545,000 lost with the proposed property tax cut. The other portion of that lost sum is said to be made up by “fees” paid by developers and by private enterprise. Somebody in Spring Hill is going to pay.

Don’t pack up the wife and the kids to take that long, long drive to Spring Hill, yet. The jury’s out on how long it will be able to go without property taxes. Time and the shrinking state budget will tell whether the Spring Hill Mayor is using a little hocus pocus and smoke and mirrors or whether the utopian vision of a land without taxes can ever exist on this side of glory, let alone on the far side of Williamson County.

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