Cities score economic wins with public investments
As he advocates for a one-cent Measure U tax, Mayor Darrell Steinberg says he wants to use part of the money to invest in job-creating ventures like the new Aggie Square innovation campus planned by UC Davis for land in Sacramento near the UC Davis Medical Center. He says any investment by the city would need to be matched four-to-one by other partners.
Mayor Steinberg argues that in order to solve Sacramento's budget issues long-term, the city needs to grow its economy so it creates more revenue. Some other cities around the country have achieved substantial results with targeted taxes used to invest in partnerships with private industry or for civic improvements that produce increased economic activity.
Here are some of their stories:
Frisco, Texas is one of America's fastest growing cities. The Frisco Economic Development Corp. was created in 1991 when voters approved a half-cent sales tax to attract investment. Insight Research Corp. recently concluded that the agency had boosted the city's economy by $31 billion, attracting 345 development projects over 25 years. The city's tax base grew from $654.7 million in 1991 to $25 billion in 2015. The Dallas Cowboys recently built their new headquarters and training facility in the city as part of a district with shops and restaurants.
Frisco isn't the only Texas city to use sales taxes for economic growth. Nearly 600 Texas cities have passed sales taxes targeted for economic development or other improvements.
Oklahoma City was in decline when voters passed the temporary one-cent MAPS sales tax in 1993. It has since been renewed in various stages, to focus on different types of investments. The first five-year round raised $363 million and helped fund nine projects, including a grand central library, the Oklahoma City Thunder’s arena, a revived waterfront and a canal project lined with historic warehouses. The tax was renewed in 2004 specifically to improve school infrastructure and in 2010 for additional city infrastructure projects.
In all, the city has collected more than $1.8 billion from the various stages of MAPS. Those taxes have produced an estimated $5 billion in economic impact to the city. Oklahoma City has gained national recognition for its revival. A new quarter-cent public safety sales tax took effect on Jan. 1.
Brooklyn Navy Yard
Brooklyn's Navy Yard has been coming back to life as a technology hub after its closure as a military base in the 1960s left it a hollowed out shell. The city-owned property now hosts about 300 companies employing 7,000 workers.
In November, the city celebrated the opening of a 1-million-square-foot manufacturing hub inside Building 77, a former storage facility dating back to World War II. The city spent $185 million to renovate the building. By the time it reopened, the city had signed leases with 29 tenants to occupy 62 percent of the building's space, with more deals close to fruition. Building 77 is expected to house 3,000 jobs. A Food Manufacturing Hub on the first floor includes companies making salsa, bagels and beer.