If you don't get it you don't get it (a short lesson in public finance)
At the macro level, yes Washington is one region. At the micro level, especially in terms of property and income tax revenues, the Washington DC region is a vast collection of individual municipalities and other governmental jurisdictions.
So yes, if jurisdiction A has X entity which generates revenues, or if jurisdiction A has a different cost or demand structure vis-a-vis other jurisdictions, it makes a difference financially. In economic development, it's why jurisdictions want office buildings, which cost only 45% of total property tax revenue to service, and big box retail, which generates sales taxes and little cost relatively (if no new infrastructure is needed), vs. residential housing which costs 90% to 125% (or more) of each tax dollar to service. (DC makes more revenue than the other jurisdictions because it also collects income tax.)
Similarly, I say that while it's great that DC proper does better economically than say Detroit, Cleveland, Pittsburgh, or Baltimore, it doesn't matter, because at the micro level, DC competes for businesses, residents, and jobs vis-a-vis other jurisdictions in the region, in particular Arlington, Alexandria, Fairfax, and Montgomery Counties.
So yes, it does matter if DC gives hundreds of millions of dollars to a particular economic entity, which then takes some of this money indirectly, and spends it elsewhere in the region, not in DC.
And yes, it does matter in terms of developing a streetcar implementation plan that DC focus on maximizing the financial return to DC, not to other jurisdictions, which is why DC shouldn't be too concerned about extending the streetcar system to National Harbor at this time, especially if National Harbor/Prince George's County doesn't pay for the expansion.
Just like DC Government is justified about the Washington Nationals thing that Steven Pearlstein discounts in today's Post, in the piece "A Broader View of Home-Field Advantage," Prince George's County is upset that National Harbor seems to be marketing its proximity to other destinations in the region, rather than working on intensifying the positive economic development of Prince George's County proper. See "Marketing effort leads tourists past Harbor," subtitled "Project’s access to Virginia and the District raises concerns that visitors will overlook Prince George’s," from the Gazette.
Labels: economic development, Growth Machine, public finance
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