Economic Development Often Is About Interjurisdictional Tax Revenue Competition

June 1, 2010 at 10:55 am Leave a comment

Competition for tax revenues by units of government is a reality of economic development. This is especially the case in tough economic times. Click here to read a recent Herald article about the Cities of Edmonds and Lynnwood are working to secure a larger share of local vehicle sales taxes, which typically the state government has had the biggest call on.

“The Legislature has robbed cities of their gas tax monies to help fill out their budget but gave us an opportunity to impose taxes through the license fee or (create) an additional sales tax,” Lynnwood City Council President Ted Hikel said.

While cities battle with their state governments and other cities for tax revenues, some governmental units have been worked to head off this zero-sum game practice and work instead on tax-base sharing within counties and regions. Click here to read about regional tax base sharing in areas like Minneapolis-St. Paul, Minnesota.

As Snohomish County leaders move from the more traditional zero-sum model of economic development to the newer positive-sum model of economic vitality, tax-base sharing and other innovative strategies should be given some thought.

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Entry filed under: Interjurisdictional Tax Competition, Local Government Fiscal Conditions, Regional Tax Base Sharing. Tags: , , , .

State of Metropolitan America & Implications for Snohomish County Create Change, Starting With You

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