Rebuilding Place in the Urban Space

"A community’s physical form, rather than its land uses, is its most intrinsic and enduring characteristic." [Katz, EPA] This blog focuses on place and placemaking and all that makes it work--historic preservation, urban design, transportation, asset-based community development, arts & cultural development, commercial district revitalization, tourism & destination development, and quality of life advocacy--along with doses of civic engagement and good governance watchdogging.

Monday, December 08, 2014

A follow up on an earlier point about Houston and extractive economies

The earlier piece:  "I get tired of the articles that ascribe Houston's economic success to its lack of zoning."

A line of pump jacks in production for Fasken Oil and Ranch Ltd., near Midland, Texas. Photo by Jerod Foster, Texas Tribune.

It always bugs me when people ascribe success for a reason which is mostly extraneous.  In the case of Houston, Texas, while it is true that housing costs are lower because of sprawl, it's not becuase of the "lack of zoning" (which is often countered with a serious regime of deed restrictions), which is touted by people like Joel Kotkin.

Despite claims about small government and low taxes (e.g., "Everything is bigger in ... including job gains"), Texas' success has to do with its place in the oil economy in terms of production, processing, refining, and chemical manufacturing.  Houston is the headquarters region for the oil industry, and as the price of oil has increased, and as production from fracking has increased, the impact on the economy in Houston, Dallas, and other Texan cities has been significant.

Petrobuildings in Houston.

But the job growth isn't because Gov. Rick Perry is particularly noteworthy or miraculous ("Oops: The Texas Miracle that isn't," Washington Monthly).  He can thank George Mitchell and fracking for the big increase in US oil production, and for awhile the simultaneous rise in demand from Asia, countered by supply reductions due to unrest in the Mideast, which for awhile jacked prices significantly.

Now that the price is falling, depending on where the price levels off, states reliant on oil production, especially Texas, Oklahoma, and North Dakota, risk economic contraction.

From the Main Street article "Plummeting Gasoline Prices Can Wreak Havoc on Economy Short Term":
Lower oil prices will benefit the regional economies of the energy consuming states of New York and California, the East and West coasts and the industrial Midwest, said Kutasovic. In those states, lower oil prices act as an effective tax cut by boosting consumer discretionary income and at the same time lowering production costs for manufacturing firms. ... 
Yet the impact on the energy producing states such as Texas remains uncertain and depends largely on the magnitude of the decline in oil prices. If oil prices decline enough, exploration and production companies will cut both production and capital expenditures on new projects, resulting in significant job losses and a slowing in regional economic growth in these states, Kutasovic said.
cf. the Businessweek story, "The Petro States of America."

Interestingly, those of us in carless or car-light households that don't purchase much gasoline aren't seeing the same significant increase in disposable income that is currently being enjoyed by car-dependent households.

In high price of gasoline scenarios, we do better, disposable-income-wise.

Labels: , , , ,


At 7:01 AM, Anonymous charlie said...

The argument for higher gas taxes would have more staying more if we based it on price stability rather than "We don't like cars".

Being open to other revenue sources as well -- Virginia's tax on cars got way too high -- but a similar system would help.

The arguments for tolls/VMT are being driven by financial intermediaries who want to take 5% of the cut.

If you look at the history of texas railway commission and oil prices you can see such price supports would be popular -- although there are interests who want to tear that down.

At 9:46 AM, Blogger Richard Layman said...

1. yes. The point is not "war on cars" but yielding an optimal mobility system, and taxation is one element of it, which is clear in policies in Europe. The consequences of the lack of such coordination are very clearly illustrated by how we do things in the US.

2. yes, the VA car tax got too high, but a higher annual registration fee is in order. (Is that the same as a personal property tax on vehicles? I realize that a personal property tax on vehicles is not listed as one of the 25 options.)

3. very good point about what's driving VMT, the companies like Cubic, Xerox, and the various systems integration firms. cf. the parking meter and garages in Chicago, Morgan Stanley and their backers (from the Mideast I think).

personally, the reason "I like" the gas tax is that it's easy to collect, unlike the VMT which would require the creation of 100-200 million accounts, car by car.

At 10:02 AM, Anonymous charlie said...

RE: War on cars. We can argue until we are blue in the face on culture wars. That said, I don't many transit/optimalists talking about pro car measures (the abuse on red light cameras, highway speed limits, road quality, safety checks) that you have in Europe/Germany. See the EU directives for speed cameras which require masive signage warning you of cameras.

(My sister just got a job out west. 70 mile commute everyday. One way. Reminder that not all of us live in coastal cities)

But yes, at the end of the day we have plenty of room on the gas tax -- $4 or $5 gas is not that onerous.

the PPT is different than an annual fee. VA still has it for cars over 25K. And yes, for instance in DC we could 5x the fee to about 350 a year. That said the discussion here is more about "taxing the commuter" than rational policy.

Rational discussion is, for instance, basing the tax on weight/pollution/size -- so that your 15 old pickup is taxed more than a newer, ligher vehicle.

At 10:35 AM, Blogger Richard Layman said...

well, i'd argue it is rational, about funding the mobility system. The elements you mention like weight/pollution/size are additional data points on which to set the pricing schedule.

(And comparable to what I recommend concerning pricing parking permits, e.g., bigger cars should pay more.)

Hmm, since in VA the state pays for local roads, I guess the car tax was used for different purposes than for paying for local roads.

My conceptualization would be that it goes to paying for the mobility system.

Anyway, that kind of stuff should be coordinated as part of mobility planning, but it isn't.

Which is why mobility planning "doesn't work so good."

2. Similarly, the State of North Dakota shouldn't be in the position of coming up with the equivalent of national regulations on the safety of tank cars transporting oil to refineries, that should be a national function.

A different, not completely analogous example, but a similar example of disconnections in what should be integrated policy making.

At 2:11 PM, Anonymous charlie said...

yes. The old rule in VA was based on Byrd. Car tax was the primary revenue for most VA counties. Was replaced by a state grant.

Decent idea in the 1930s, not so great today.

At 3:13 PM, Blogger Richard Layman said...

by the by, I think it's better to do something like what Maryland does, where the "state" income tax is split between the county and the state, but with one collection system.


Post a Comment

<< Home