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jencoleslaw

question about math

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here's a quote from the journal regarding the quonset gateway project:

The project is expected to generate 750 construction jobs and 1,400 permanent jobs, in addition to $1 million in tax revenue for the town and at least $9 million for the state.

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if there's currently a lack of stores in a certain area, people are less likely to say "screw it, i'm not driving to warwick, i can do without [insert item here]" because there's a store closer to them now. so there will be a net gain rather than no change at all.

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if there's currently a lack of stores in a certain area, people are less likely to say "screw it, i'm not driving to warwick, i can do without [insert item here]" because there's a store closer to them now. so there will be a net gain rather than no change at all.

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You're probably right about sales tax, to some extent, but wouldn't some of that $9 mil be increased property tax on the improved property, income tax on the 1,400 new jobs, and other such taxes?

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You're probably right about sales tax, to some extent, but wouldn't some of that $9 mil be increased property tax on the improved property, income tax on the 1,400 new jobs, and other such taxes?

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The State of RI owns the land where the Quonset Gateway will be built. The owner is the Quonset Development Corporation, which is part of RIEDC, a state agency. Therefore, the State will either receive lease payments of $9 million over a certain period of time as a result of this development or it will receive a lump sum payment in this amount if it is selling the land to a developer. That's my guess.

PS. The quote implies that the State will collect tax revenue in this amount but it might just be inexactly worded (if it's from the Projo I wouldn't be surprised), which leaves open the possibility that we're not dealing with taxes but payments.

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I find it hard to believe that the folks in davisville/quonset simply have been doing without stuff for all these years.

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There was also a RIDEC open house tonight,

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to follow up on this question which no one has actually been able to answer, i'll ask another one that i've asked many times and never gotten an answer:

What is the proof that a development "will lower taxes" for a community? That line is always trotted out and yet after it is there there's never any talk about lower taxes. Are there really communities that find that their taxes are lower because they granted something a bunch of variances and allowed it to be built there? Can anyone actually point to a community or a city or state where the residents benefitted by lower taxes as promised?

I wasn't involved in planning or politics so much when the mall was built but i'm willing to bet one of the positive spin sound bytes was that a development this size would lower taxes--has it? (don't get me wrong--i love the mall i have no beef with the mall except the parking garage is criminal) but i am merely using it as an example. Perhaps that wasn't one of its selling points, but i certainly hear a lot about how big development lowers taxes for residents, but i'm not sure i've ever understood how and if that actually happens...

thoughts?

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to follow up on this question which no one has actually been able to answer, i'll ask another one that i've asked many times and never gotten an answer:

What is the proof that a development "will lower taxes" for a community? That line is always trotted out and yet after it is there there's never any talk about lower taxes. Are there really communities that find that their taxes are lower because they granted something a bunch of variances and allowed it to be built there? Can anyone actually point to a community or a city or state where the residents benefitted by lower taxes as promised?

I wasn't involved in planning or politics so much when the mall was built but i'm willing to bet one of the positive spin sound bytes was that a development this size would lower taxes--has it? (don't get me wrong--i love the mall i have no beef with the mall except the parking garage is criminal) but i am merely using it as an example. Perhaps that wasn't one of its selling points, but i certainly hear a lot about how big development lowers taxes for residents, but i'm not sure i've ever understood how and if that actually happens...

thoughts?

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i think there's also the argument that a good development can raise taxes by increasing property values...

i think the idea that a development will lower taxes is that it's paying a lot more taxes than the neighbors so the town can reduce taxes for everyone because of the extra income. i think it's only temporary, and unlikely to happen to begin with (like the whole casino thing, i'd say property tax relief was highly unlikely to ever be seen in large enough quantities to even matter).

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Surely if there were any kind of relief on the tax burden the municipality or the state would find some way to spend the money before it got to us. And in a city like Providence where we're going to be spending the next decade (at least) trying to catch up on decades of neglect we have no chance of seeing reduced taxes any time soon. I would hope for stability, not decreases.

At least as a result of developments. Now if the city and state would find ways to spend our money more wisely, then maybe we could see some reductions.

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i just would like to be able to say (or not!) that there is no proof that developments or grand projects like the casino or the mall or quonset gateway or whatever, lower taxes.

does anything lower taxes? i mean, more residents don't lower taxes do they? What about more business? What is the math on the drag on services that more people bring vs the "more people to spread around the burdon" line?

My history says that taxes only go down when the mill rate goes down, and that only happens, usually, after a revaluation when everyone's house values go up, and in some cases not that much, so when the mill rate goes down, those people benefit. I suppose at some point income taxes could go down and that would benefit everyone in the state, but has anyone ever tied income taxes to development?

where are all the libertarians mathmagicians when i actually want to know the answer to some things?! hmm?

:rolleyes:

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i just would like to be able to say (or not!) that there is no proof that developments or grand projects like the casino or the mall or quonset gateway or whatever, lower taxes.

where are all the libertarians mathmagicians when i actually want to know the answer to some things?! hmm?

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I'm not a mathmagician but I did go to the Geeks dinner last night.

I think the short and literal answer is no, none of these things directly equate to a lower tax rate. The only way to lower the tax is if the governing body acts to lower the tax. We could have a hundred 1,000 foot buildings and if the city did not act to lower the tax rate to reflect the windfall of new income, then the tax rate would not go down. At best unless tied to legislation that specifically states the tax rate will go down, no development directly equals a lower tax rate, it simply provides additional income which the governing body may decide to pass onto the taxpayers in the form of lower taxes. In a nearly bankrupt city like Providence, and state like Rhode Island I think we're very unlikely to see those reductions.

And I never believed for a second that the casino was going to lower anything, except maybe our collective IQs.

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I can't believe that no one has ever done a study on it

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I'm sure everyone who has attempted to do such a study is now living comfortably at the bottom of the Providence River. :whistling:

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I'm sure everyone who has attempted to do such a study is now living comfortably at the bottom of the Providence River. :whistling:

I would love for the city/state to try to quantify the real benefits. Maybe someone should start a group that tries to educate people on the real benefits of development in the city.

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JCS,

You might be interested in researching Cost of Community Services (COCS) analysis. Municipalities and open space conservation organizations frequently commission economic development planners to conduct COCS studies to evaluate fiscal impacts of various scenarios.

I used to work for a conservation organization and we would sometimes commission a study to show what the municipal service costs and the projected tax benefits would be of preserving a piece of land versus building X number of houses. When you hear a conservation org arguing that it is more fiscally prudent to spend $X million to preserve X acres than to allow X houses, X school children etc etc it is because someone has conducted a COCS study.

Similarly, now that I'm a private sector planner, municipalities will hire firms like mine to evaluate the projected tax revenue and projected service costs associated with various development schemes. The better the assumptions built into the model, the better the projections. This is key. For example, by manipulating the assumptions casino people on both sides of the debate can manipulate the numbers to demonstrate their arguments. If a casino proponent doesn't assume crime will increase, then it won't factor in the cost of increased policing.

A limitation of a COCS analysis is that it is project specific. It isn't designed to evaluate how a project will affect the fiscal picture of a whole town. A COCS study will nearly always demonstrate that it is cheaper to conserve land than to develop it with housing on that particular parcel (unless it is really, really expensive housing). But, the COCS doesn't take into account that if every parcel of land is conserved in a town, then land for housing becomes so expensive that the only housing that is cost effective to build is McMansions, if any. COCS usually conclude that people are a fiscal negative.

A google search of Cost of Community Service analysis would give you various methodologies, assumptions etc. Be wary when someone uses a COCS study to extrapolate beyond the project itself to the fiscal impact on a town/region/state. A good study will describe the assumptions that were made and will be cautious about making projections beyond the scenario that is being evaluated.

oak

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Oak, that is very interesting--do you think there is any language in the comp plan or development review regulations or any other ruling book of words that we use in PVD that gives us the power to ask for one of the COCS? it might be a good thing to add if we don't have one. It is sort of like a traffic study, but for money!

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Oak, that is very interesting--do you think there is any language in the comp plan or development review regulations or any other ruling book of words that we use in PVD that gives us the power to ask for one of the COCS? it might be a good thing to add if we don't have one. It is sort of like a traffic study, but for money!

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Maybe I'm misinterpreting something, but what exactly are we hoping to accomplish with this? You guys already complain about how shortsighted the average Rhode Islander is. As far as I know Joe Sixpack cares about two things: resisting change and keeping money in his pocket. And now you're advocating that these COCS thingies be done for each new project (at taxpayer's expense)?, and Oak's basically said they all come out saying new development costs more than it saves. He also said the results can easily be skewed one way or another.

The people who post here on UP are not representative of the norm, that is Joe Sixpack is a lot less likely to swallow the news that he has to pay more now for potential intangible city-wide betterment later. Seems to me that unless you're planning to cherry pick which projects you think warrant one of these studies, no development would ever get off the ground. Why waste the money on the study if we already know the answer? Let the developers use their funny marketing. If you have a real problem with the project I'm sure you can find other ways to attack it. I don't know, like I said maybe I'm misinterpreting something...

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Maybe I'm misinterpreting something, but what exactly are we hoping to accomplish with this? You guys already complain about how shortsighted the average Rhode Islander is. As far as I know Joe Sixpack cares about two things: resisting change and keeping money in his pocket. And now you're advocating that these COCS thingies be done for each new project (at taxpayer's expense)?, and Oak's basically said they all come out saying new development costs more than it saves. He also said the results can easily be skewed one way or another.

The people who post here on UP are not representative of the norm, that is Joe Sixpack is a lot less likely to swallow the news that he has to pay more now for potential intangible city-wide betterment later. Seems to me that unless you're planning to cherry pick which projects you think warrant one of these studies, no development would ever get off the ground. Why waste the money on the study if we already know the answer? Let the developers use their funny marketing. If you have a real problem with the project I'm sure you can find other ways to attack it. I don't know, like I said maybe I'm misinterpreting something...

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