Inefficiencies of Local Government

First of all, I would like to congratulate the golf course on two good days of business.

I wanted to have a discussion about the inefficiencies of the local government. It has long been the belief that local governments are best suited to provide local transportation infrastructure, sanitation, police, fire protection, and elementary/secondary education services. One prominent theorist (Tiebout) specializing in local government asserted that people will "vote with their feet" by moving to a locality that provides a better mix of taxes and services. Local governments try to keep people and attract more by offering attractive public services and amenities at reasonable tax costs. Of course, this theorist assumed that people can move to other localities without many burdens. Today, we know that some people cannot vote with their feet due to economic circumstances.

These local governments need revenue, and the biggest source of this revenue is the property tax. The main purposes behind local taxation is to provide services and create wealth. I believe all of us are very familiar with the providing services part. However, a local government should have policies that improve the well being of the local citizens. Also, there is a desire to increase the tax revenue of a community through business related decisions. However, it is paramount that these business related decisions lower the effective tax burdens on residents. Generally, the majority of the property tax burden falls on the residents of a community. This is because businesses usually receive tax relief as a carrot to come to a community.

Now to the inefficiency of our local government. Dayton has one of the highest property taxes in Webster County. Granted, some of this is due to recent infrastructure improvements. However, the golf course decision was a business decision that increased the tax burden on the residents of Dayton. As noted before, there was some questionable decisions that were made with regards to the golf course. First, there was no mention of possible private buyer. Second, the city could have gotten a much better deal than the $ 170,000 paid. Finally, the citizens are footed with the bill of the $ 107,000 loss last year. I would argue that some of these moves has hurt Dayton in being competitive with other communities. A golf course is a great asset to the community. However, other communities offer the same services at a lesser tax burden to their residents. This puts Dayton at a competitive disadvantage, which is part of the inefficiency of our local government.

We still have the full golf course season ahead of us to see how well the golf course does and what future decisions the Rec Board makes, as well as the City Council. In November, each resident will get to evaluate the decision-making of the Council and determine whether the Council made Dayton more competitive in the sense of offering the right mix of taxes/services.