bQNs7mR

The advantage of these different tax mechanisms is that asset managers do not have to rely on an individual
income stream. Even when property values are falling, for example, revenue from sales taxes may still bring
in money.
The ability to vote on such mechanisms is valuable for its own sake and in helping to raise awareness. Most
mechanisms are introduced following a vote of residents, usually at the city-wide level but sometimes at higher
and lower levels. Votes on certain taxes attract attention and debate in the media. The DIA millage vote took
place when I was in Detroit and the buzz in the local media was considerable.
There is also a range of other tax-related mechanisms that allow local and state government to attract finance
to assets.
• Municipal bonds: These are bonds issued by local government to raise investment, which then pay back
the initial purchase price plus interest. States and municipalities have also financed assets through issuing
these — subject, that is, to the cities’ respective credit ratings. The city of Minneapolis government, for
example, took over four city theaters and, using bond money, undertook major upgrades and handed the
theaters over to a specially created trust.
• Tax Increment Finance (TIF): This is where a city secures investment in infrastructure through sale of
bonds or private investment, in either case repaying it through future tax growth in the area that had the
investment (a kind of localized bond). In Minneapolis, TIF was used to fund a 20-year Neighborhood
Revitalization Program that attracted awards and international attention for the way it galvanized
neighborhood activism across the city and proved very helpful in securing many new community assets.
• Tax breaks to donations to non-profits (including asset support groups). The state of Maryland gives such
breaks. Non-profits have to apply to receive tax credits from a pool that they (the non-profits) then give to
donors — so a minimum ($500) donation to a credit-holding non-profit would see the donor get $250 of
credits in return.
The toolkit offers a check-list of questions to ask when contemplating the introduction of any new tax
mechanisms. These cover the what, why, where, when, and how, addressing issues such as whether it will deliver
the desired funds, whether it will do so efficiently, and whether it will do so equitably.
Theme 4 — Local government can help assets by making the most of taxpayer funds
Local government asset managers have a range of efficiency measures they can try where improved efficiency is
defined as getting the same or more output for less input. Measures that aim to improve public assets’ operational
efficiency include “take-over” of a municipal library system by a surrounding county library system (as happened
to Minneapolis Public Library system a few years ago); self-service checkouts in libraries (as seen in Baltimore
County Library); shared services (as between Scott County and Three Rivers park systems in the Twin Cities
metro area); and library use of a fee-collection agency (as done by Detroit Public Library system).
Charges to hire items/equipment can show whether a particular service is valued. Typically, entry to a
community or civic asset is free and any entry charges that do exist are kept to a minimum. However, charges
are often applied to more intensive programming such as summer youth camps. Charges are also often made for
“extras” such as seeing a special exhibition, renting a video, or hiring a picnic shelter or kayak at a park with a lake.
Charges for extras are useful in that they require people to consider whether they value them. In turn, this signals
to asset managers that either something is popular or that the offer/price are wrong. Payment of something also
ensures that more specialized aspects not used by taxpayers are supported by those who do use them.
Summaries | 12