Such public-private partnerships are powerful tools for economic development when done right and the stars align in the form of a good idea coupled with good execution. Whether we're talking about funding basic research or revitalizing faded neighborhoods that nevertheless retain some potential for future growth - or fixing infrastructure like a functionally obsolete traffic intersection - public money, once you have it, can be more "patient" than private capital and doesn't have to make a positive return to investors perhaps quite so rapidly. In the case of the roundabout, we've seen a "return on investment" remarkably quickly. The point is that there are some socially desirable outcomes that are inherently too risky for private investors to take on. Once a foundation of sorts is in place, and some certainty established around an idea, neighborhood or piece of infrastructure, the gates open for private investment, which hopefully leads to growth and jobs.
This lubricating role is one that the public sector is well-equipped to play, although it's worth bearing in mind it comes to us courtesy of public taxpayer dollars. Sometimes that summons the required scrutiny; sometimes not so much. So it was with interest we tuned in to an idea floated during the most recent planning commission meeting about financing more civic improvements downtown, possibly financed by levying a special assessment on downtown businesses, or all businesses, or all residential and commercial properties. The goal, as we understand it, would be to acquire a fund of local money to be used as a component to trigger a much larger sum of state and federal money to upgrade that which needs improvement. Much will hinge on what those are and what those benefits are expected, or hoped to be. So will the size of the proposed tax. It's no secret that many local businesses are struggling and working hard to make ends meet. That could be said of almost every town and state in the country. Any idea that relies upon increasing on an inelastic tax like that on property should be entered into very carefully. The individual dollars raised may not seem large, but right now, every dollar counts, especially for smaller, family-owned businesses.
Another approach might be to raise the funds through a sales tax, or even better, some form of a value-added tax. Tacking it onto the local option tax might be one way, if the rate can be adjusted. Had there not already been enough pressure on money derived from the local option tax money, we'd argue for that approach, but there's only so much you can put on that. Others will complain that sales taxes are inherently regressive, hitting lower-income folks harder than wealthier citizens, as well as making retail businesses less competitive. But at the same time, civic improvements, whatever they turn out to be, will benefit everybody, not just nearby property owners and businesses, if they are worth doing in the first place.
It's an interesting idea, and much will hinge on the specific facts, but a cautionary yellow flag deserves to be waved also. Manchester may have a relatively low municipal tax rate compared to comparable communities elsewhere in Vermont, but taxes, like the cost of living here, are not insignificant. If it is eventually passed, a "sunset" or expiration date should be part of the deal. Once in place, taxes are hard to get rid of. There's always another intriguing sounding project lurking in the wings, and whether it passes the public-private partnership test is often another question worth exploring.
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