Revisiting the land value tax in Lancaster
For some years, the visionary Mayor of Lancaster Pennsylvania Rick Gray has worked tirelessly with his team to return one of the oldest and most distinguished of American cities to its rightful place as a muscular economic and cultural hub of Lancaster County and Amish country.
Mayor Rick Gray: I've got an Idea.
Mayor Gray has also been a firm advocate of land value tax, yet peculiar valuations imposed on the city by Lancaster County have been a political barrier. Also, new and expensive developments of commercial property at the city's edge were ascribed little land value, a common problem in most jurisdictions. (Why? A commercial owner wants as much of his property to be depreciable for federal tax purposes.).
Urbantools has conducted several LVT studies in partnership with the city, including the study of an alternate form of land value tax, which would provide massive property tax relief for low to middle income neighborhoods and small business, using a strategy of exempting improvements from property tax by a fixed dollar amount.
A terrific article in the May 15 Lancaster Online written by Gil Smart clearly explains what land value taxation is, and its place in American social and economic history. Mr. Smart also writes about Mayor Gray's idea to revive a power once widely used by Pennsylvania cities: doing their own property valuations.
The idea makes sense, as city officials would have local knowledge and the motivation to keep values up to date. Also, from Urbantools' 60 years of experience in these issues, competition between Pennsylvania cities and surrounding counties have led to urban areas consistently getting the short end of the stick, even though most economic activity is generated by the city, and not the sprawling suburbs.
As Americans realize that a safe urban streetscape is a wonderful place to live and work, Lancaster beckons with beauty and many amenities. Having a tax system that encourages capital investment in sweat equity will assist the city in making sure it's many quality of life enhancing projects pay off for taxpayers.
"North Duke Street Lancaster" by Scanlan - Own work. Licensed under CC BY-SA 3.0 via Wikimedia Commons -