Friday, November 04, 2005
U.S. Census Bureau Numbers On Commuting Could Fuel Payroll Tax Move
Every day, the population of Memphis swells by 102,743 people who flood into the city to work.
In fact, the percentage of population change that is due to commuting – 15.8 percent – is one of the highest for cities with populations of more than 500,000.
These are the first-ever estimates on daytime population changes compiled by the U.S. Census Bureau and released recently. They provide information on commuting patterns that are valuable in city planning and disaster planning.
The rankings of the nation’s largest cities (more than 500,000 people) and the percentages of their increased population every day are:
71.8 percent -- Washington, D.C.
41.1 percent -- Boston
28.4 percent -- Seattle
28.0 percent -- Denver
23.0 percent -- Portland, OR
21.7 percent -- San Francisco
21.2 percent -- Charlotte
20.6 percent -- Houston
19.5 percent -- Nashville
19.4 percent -- Austin
19.1 percent -- Dallas
18.7 percent -- Oklahoma City
15.8 percent -- Memphis
15.6 percent -- Indianapolis
14.2 percent -- Baltimore
14.0 percent -- Fort Worth
11.6 percent -- Columbus, OH
The data demonstrates convincingly that Memphis remains the economic engine of the entire MSA, and indicates that reports about the death of its dominance are greatly exaggerated.
Besides contributing to better planning, the data might also provide ammunition for the advocates of a local payroll tax. Of course, the key statistic for that tax proposal is the number of commuters traveling into Shelby County to work and that number is 61,398, which is a sizable number on which to base a plan to spread the local tax burden to non-residents who work here. Shelby County’s population grows by 6.8 percent, and that’s the sixth largest percentage of all of Tennessee’s 95 counties. In sheer numbers, it is second only to Davidson County, which has 113,710 commuters working there every day.
Over the years, the idea of a payroll tax has surfaced from time to time, but it has been torpedoed by various interests, normally led by major employers. With the deepening crisis in the finances of both Memphis and Shelby County Governments, it just may be resurrected again.
Projections distributed within county government by Commissioner John Willingham say that a 2.5 percent payroll tax would net $480 million. That new source of revenue, according to this particular plan, would allow for the wheel tax to be abolished; for the county property tax rate to be lowered by $1.04; and for the local option sales tax to be eliminated.
The proposal also calls for a 10-year freeze in the payroll tax rate and a referendum to approve any increases after that time; a 10-year freeze on the property tax rate; and a 10-year freeze on the sales tax rate. (It also proposes that all tax freezes under the PILOT program be subject to the approval of the county board of commissioners.)
The theory for the payroll tax is simple. It shifts part of the tax burden for local infrastructure and amenities to the 61,398 people who drive into Shelby County to work every day, and then drive back across the county line without investing in the infrastructure that keeps the regional economy strong.
In case you are wondering, the percentage change of the daytime population of DeSoto County is minus 18.8 percent, precisely because only 36 percent of the people who live there actually work there. (95.2 percent of Shelby County residents work here.)
Trends similar to DeSoto County’s also exist in Fayette County, where the daytime population drops 21 percent; in Tipton County, where the daytime population drops 20.7 percent; and in Crittenden County, where the daytime population drops 7.4 percent.
The new census estimates form a fascinating glimpse of Memphis’ magnetic pull to the region, but they may also form the basis of a fascinating political dance to pass a payroll tax.
Posted by Smart City Consulting at 12:47 AM