Summer Reading Series: Special Taxing Districts

My summer reading recommendation is less of a "must-read" and more of a "must-watch," but relevant to economic development all the same. In our work, we frequently come across communities with complex patchworks of overlapping governmental jurisdictions—a multitude of special taxing districts depending on the service provided. A single municipality might fall within multiple school districts, fire districts, water districts, etc., the boundaries of which rarely coincide.

In this clip from HBO's Last Week Tonight, John Oliver tackles the complex issue of special districts. In many cases these districts can function as a sort of "ghost government"--public entities that are funded by taxes, yet are often subject to little oversight. Moreover, formal processes for establishing and/or disbanding special districts can be full of loopholes or non-existent.

So why does this matter? The fact that citizens may be completely unaware that they live in a special district leads to a lack of accountability. As John Oliver points out, voter turnout for special district referenda can be extremely low because people are simply unaware that such a vote affects them.

Besides issues surrounding accountability and public confusion, the profusion of special districts can create rifts within municipalities making it difficult to plan for economic development. A single town split between multiple special districts puts residents at odds, as they compete for investment in their part of town. This lack of cohesion creates challenges for establishing a unified sense of place within a town, which in turn impedes economic development marketing and branding efforts. Moreover, these often convoluted layers of government create added complexity and uncertainty for businesses seeking to invest in a particular place, and can act as a deterrent.

This is not to say that special districts do not serve a useful purpose. But as this clip points out, a lack of awareness about their impacts is a significant obstacle to government transparency, and ultimately, economic development efforts. It's a humorous take on an all-to-true reality--certainly worth a watch!

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