2017/01/10: When we added up the replacement cost of all of the city's infrastructure -- an expense we would anticipate them cumulatively experiencing roughly once a generation -- it came to $32 billion. When we added up the entire tax base of the city, all of the private wealth sustained by that infrastructure, it came to just $16 billion. This is fatal.
It's obvious to me why this is fatal, but for those of you for whom it is less clear, let me elaborate.
To maintain just the roads and drainage systems that have already been built, the family in a median house would need to have their taxes increase by $3,300 per year.
Thus, Lafayette has a predicament. Infrastructure was supposed to serve them. Now they serve it.
The way this happened is pretty simple. At Strong Towns, we call it the Growth Ponzi Scheme. Through a combination of federal incentives, state programs and private capital, cities were able to rapidly grow by expanding horizontally. This provided the local government with the immediate revenues that come from new growth -- permit fees, utility fees, property tax increases, sales tax -- and, in exchange, the city takes on the long term responsibility of servicing and maintaining all the new infrastructure. The money comes in handy in the present while the future obligation is, well....a long time in the future.
All this infrastructure is a bad investment. America needs a different model of growth and development.