Photo by motograf on Flickr.
Many conservatives, especially tea party conservatives, strongly believe in removing powers and taxes from the federal government and transferring power to states and localities. At the moment, this view has strong support in Congress, especially the Republican-controlled House of Representatives.
Is this necessarily incompatible with the goals of urbanists, even progressive ones? In many ways, the two movements could find a lot of common ground if they can move past mutual distrust and some overheated rhetoric. To its credit, the tea party opposed Governor McDonnell’s plan to borrow to build more roads, for example.
Both DC and Northern Virginia counties pay taxes to a higher level of government which then returns significant amounts of that money directly according to a formula. Both also have limits put on their autonomy by that higher level of government; in DC’s case, it’s the feds, and for Virginia, it’s the state government. Much of the money that doesn’t come back to the locality turns into subsidies to other areas.
Tea partiers don’t like this because the state is telling local government what to do, and charging a lot of money; urbanists don’t like this because places which make efficient land use choices that minimize government spending on infrastructure just end up subsidizing places which don’t. Can both find common ground to reduce this practice and give local areas more autonomy?
One House Republican floated the idea of exempting District residents from federal income tax (though his spokesperson says it’s not on the table). A group of Republicans also proposed cutting off all federal funding for a variety of DC functions, which leaders say would be “catastrophic” for DC.
If combined, however, DC could raise its own income taxes to recover some of the missing cost. The Republican Study Group wanted to cut $210 million from DC-related spending plus the $150 million a year to WMATA, whereas DC residents paid $3.6 billion in taxes last year.
If both measures passed together and Congress didn’t try to stop DC from raising its local income tax to compensate, the District might be able to cover the $210 million on its own and even pay the federal share of WMATA’s capital contributions out of the new revenue, and still keep taxes lower on average.
Let’s also cut the National Park Service’s budget while also eliminating its authority over all parks in DC except for the Mall area.
The federal government also gives each state, including DC, money for Medicaid, transportation, and many other types of payments allocated by formula. Medicaid and transportation, in particular, come out of payroll taxes and gas taxes, and it’s not clear if the $3.6 billion number includes those. It can’t include everything, since one IRS list says total federal tax receipts from DC total over $20 billion. Brookings estimated that DC received $2.7 billion in formula money in 2008.
Would conservatives and tea party activists like this? Anyone who simply wants to see lower taxes might be somewhat but not entirely pleased. Those who want to give more power to lower levels of government, however, ought to find common cause with those who chafe at federal policies which deprive metropolitan areas of the ability to set their own priorities and the fruit of their own economic activity.
Similar principles apply in Virginia. The state government collects many taxes and pays them to localities by formula. The Dillon Rule limits the abilities of counties to set many of their own policies. If the Virginia tea party indeed wants to see counties and cities do more legislating for themselves, perhaps both urbanists and tea partiers can support repealing the Dillon Rule and those state taxes, and letting individual counties decide if they want to assess comparable taxes to cover those programs or not.
Virginia tea partiers likewise could support letting the Northern Virginia counties directly raise the money they pay to WMATA, instead of having the state collect it from Northern Virginia taxpayers, and to keep WMATA Board membership in the hands of local officials instead of state ones.
Likewise, Northern Virginia counties, working together, should set their own transportation priorities. Why not give each county or city its own share of the gas tax directly, and let them fund transportation improvements in their own areas or use that revenue in other ways as they see fit?
The Washington region would become much more self-sufficient, which is something tea partiers and urbanists should both be able to support. Liberal local governments might still choose to levy taxes to pay for various services, but shouldn’t that be a local decision? The federal government or state government in Richmond would be making fewer decisions affecting residents’ everyday lives, which is a good goal.