To the editor:
For more than eight years local government has provided economic incentives at an unprecedented rate. Incentive packages include a variety of tax reductions phased out over a period of years. When a new building is constructed the local community receives revenue through property and employment taxes that weren’t part of the incentive package.
Municipal bonds are issued on the basis of the projected future tax revenue. Bond proceeds are used to complete community development projects that may not be completed without the additional tax revenue.
Incentives were necessary to reduce unemployment after the Great Recession, and to offset lost revenue to municipal services due to property tax caps.
However, for many years unemployment has remained low and tax revenue is stable, but municipalities continue to incentivize businesses paying low wages. Economic development dollars should create higher wages that allow those working and living in the community to own a home and accumulate household wealth. This includes our teachers. A good job, good wage and home ownership were central to the American Dream and the primary means of creating wealth for the middle class. Now days, it seems that just a job and an apartment are all that our middle class should expect.
In 1995 the average wage for a forklift operator was $11.28. Today, the average wage is $17.44. That’s an increase of roughly 55 percent. During that same period of time the Consumer Price Index has risen more than 52 percent, and the average selling price of a new home has increased nearly 60 percent. Raising the mean wage in our community can have a significant impact. A higher wage allows households to buy necessary goods and services that otherwise may not have been affordable.
Wages above $24.50 per hour will lift families off public assistance programs, but may not provide the borrowing capacity to purchase a home in the community.
According to a 2018 report from the Metropolitan Indianapolis Board of Realtors, an attainable home for most of the population is below $200,000, while the average selling price of new homes in the region for 2019 is projected to be above $300,000.
Communities have been reluctant to approve new attainable single-family housing subdivisions due to the impact on support services such as fire, police and schools. Communities should look at ways to reallocate economic development dollars to support new quality single-family housing and rehabilitate older neighborhoods.
The quality of new homes could be subsidized by offering to extend municipal utilities through new developments and waiving sewer utility tap fees.
Our existing neighborhoods need support as well. There are many neighborhoods with private streets that aren’t being maintained and need to be rebuilt, but the homeowner’s associations can’t afford to absorb those costs.
When you vote, consider which candidate will think in terms of economic development that supports higher wages and individual and household wealth accumulation through home ownership.
Eric Harvey
Greenwood
