There is no question that the baby boomers are beginning to reach retirement age. Over 300 Americans turn 60 each hour of the day. So what does this mean? Should we fear the increasing over 65 population and the potential costs this will create for government? John B. Shoven, an economics professor at Stanford recently explored the potential affect this aging population could have. Shoven (in a recent article published by Foreign Policy) writes:
There is a looming catastrophe stalking the developed world. It promises to devastate the global economy, overwhelm hospitals, and decimate armed forces. What is the calamity that promises such misfortune? Not a killer virus, deadly terrorist attack, or natural disaster. It’s the aging of the world’s baby boomers, the coming tidal wave of senior citizens who will live longer, consume more, and produce less, seriously challenging societies’ ability to care for their graying ranks.
This is the sentiment that is presented by a number of policymakers. However, Shoven argues that the way we measure age is flawed. Specifically, a 65 year old today is not the same as a 65 year old a few decades ago. In fact, according to Shoven’s numbers, a 65 year old man in 1940 could expect to live 11 more years. Today a 65 year old man has a life expectancy of another 17 years. Or a 65 year old today is the equivalent (according to mortality rates) as a 59 year old in 1970.
Does this mean we should up the retirement age? I’m not necessarily advocating that…but this does add an additional factor to our discussion of dependency ratios and aging demographics. While it is true the baby boomers are coming, it sounds like 65 may soon be the new 55.
Did you know that Mesa, Arizona is now larger than Miami or St. Louis? Or another suburb of Phoenix, Peoria, is now larger than Peoria IL? The population growth in America throughout the last few decades has largely occurred in the suburbs, or the “Boomburbs” according to Dr. Robert Lang. Lang was in Salt Lake City yesterday to present his research regarding the trend of boomburbs across the nation and the population growth of the west. Recently Lang’s book Boomburbs: The Rise of America’s Accidential Citieswas published by Brookings (I blogged about the book a year ago: here). Lang’s afternoon lecture at the U of U and evening forum at the SLC Library raised a number of important questions related to our growth here in Utah. A few issues were especially relevant:
- How does a city transition from it’s “cowboy” or country heritage to an urbanized environment? Meaning if we are going to add 1 million more residents to the Wasatch Front (by 2060 Salt Lake County is projected to be over 2 million in population) how will this increased density reshape our notion of community in the suburbs? We are beginning to see this already with sleepy suburban communities now growing to over 100,000 in population.
- How can cities incentivize significant economic development? How important is transportation infrastructure? Or a walkable space that residents enjoy? These are few issues addressed by Lang.
In addition to the presentation from Dr. Lang the evening forum also included the perspective of three panelists: Soren Simonson (Salt Lake City councilman), Rick Horst (South Jordan city manager) and Mike Coulam (Sandy City community development director). These three officials all contributed to an interesting discussion. Thanks again to Dr. Lang and our panelists (and KCPW for broadcasting the forum).
You can listen to the KCPW podcast here: Dr. Robert Lang Forum
The debate over sales tax driving economic decisions (or the “zoning for dollars”) has been an important discussion for local officials for years. Despite the years of debate it isn’t exactly clear how much sales tax revenue dictates local land use decisions and more importantly to what extent the economic development incentives of the state are different than the economic development incentives of cities and towns. We know that cities have a large dependency on sales tax. However, the state frequently pursues higher paying jobs than retail (which does not provide immediate financial incentives to cities). However, the puzzle of economic development is complicated…sales tax is also important to the state (generating nearly $2 billion and over 34% of the GF budget) and high paying jobs are key to the quality of life of cities and towns. In my opinion the economic development decisions are not singularly dictated by tax revenue incentives. Not to mention other factors such as demographics, infrustructure, and quality of life factors that may play a more important role than tax structure on business decisions.
Anyhow Utah Foundation explores these questions in an interesting recent report: local-economic-development-utah-foundation
The sales tax may actually be a more balanced economic incentive than it seems at first glance. Many retailers prefer locating in a city with good jobs and well-to-do residents, creating an incentive for cities to pursue balanced development to foster strong retail sales.
Property taxes are frequrently cited as the most hated tax, partially because they are also the least understood tax. One reason property tax is more complicated is because of the various tax entitites and their differing tax rates (as illustrated with this picture). However, property taxes can be explained in a relatively direct and simple manner….which we have sought out to do.
Property Tax Myth #1: Cities receive more money when home values increase We have found through our trainings of newly elected officials that there are a number of misperceptions regarding property tax revenue during times of increasing home values. Even among many elected officials there is this perception that cities recieve a windfall of revenue every time the homes in their community appreciate in value. However, truth-in-taxation prevents exactly this from taking place. Instead truth-in-taxation creates a brake on revenue windfalls associated with increasing property values.
Roger Tew and I recently presented a basic outline of how truth-in-taxation works to our city officials across the Wasatch Front. You can access the presentation here: ulct-property-tax-forum3
There is no question that the baby boomers are beginning to reach retirement age. Over 300 Americans turn 60 each hour of the day. So what does this mean? Should we fear the increasing over 65 population and the potential costs this will create for government? John B. Shoven, an economics professor at Stanford recently explored the potential affect this aging population could have. Shoven (in a recent article published by Foreign Policy) writes:
