published in the Boulder Daily Camera, 5/16/08:
re "Boulder leaders shiver at retail sales-tax decline", Boulder Daily Camera, 5/14/08
To the Editor:
Boulder’s City Council may “shiver” at a likely decline in sales tax revenue, but I’ll bet you the tax on a free cup of coffee that they’ll never look to where much of the blame belongs…and they can find that answer by standing in front of a mirror.
Boulder does everything it can to antagonize upper-income people from moving here and new businesses from setting up here, so, in addition to overall economic conditions, it's no surprise that sales tax receipts might weaken. Look at some of our major local news stories in recent days: Boulder is considering taxing people who occasionally rent out their houses, as if they were hotels. Boulder has, and doesn’t seem inclined to get rid of, a tax on “complimentary cups of coffee and other freebies”…and at least one Councilman’s argument is simply that Boulder needs the money, ignoring how unjust and ridiculous the tax is. And under Boulder County’s new “BuildSmart” program, a thinly veiled extortion of upper-income buyers or builders of homes couched in feel-good junk-science, the cost of building will be substantially increased at a time when demand for housing is already relatively weak.
Environmentalist extremists may think that what Boulder needs is fewer humans and more prairie dogs, but most rational people don’t agree. While the City Council and the County Commission both claim to care about a long-term prosperous and sustainable future for Boulder, almost every action they take seems derived from a complete lack of understanding of economics and a misguided contempt for successful businesses and successful people. When Boulder’s economy begins to stagger, we should all remember who gave it the punch in the gut.
Update: One online comment in response to my letter said that my point about weak demand was wrong because it costs so much to rent housing in Boulder. Here is my response:
(from the author of the letter "Blame City Council for Declining Revenue", although I did not choose the title)
Several problems with your criticism of my letter:
First, you are talking about rentals where I am talking about interesting in purchasing property. Particularly as you look at sales tax income to the county or city, it's likely that home buyers would contribute more than renters, many of whom are probably college students on modest budgets.
Second, it's not about comparing Boulder to some other place. It's about comparing Boulder now (or in the future) to Boulder before now. If you had a Rembrandt, would you try to determine whether its value was going up or going down by looking at the prices of posters or ceramics?
Third, anecdotal evidence such as you attempt to offer is not data. The data supports my contention. For example, this Camera article says that recent building permit applications are the lowest in two years:
And I'm looking at statistics that show Boulder (city) real estate comparisons from the first quarter of 2007 to the first quarter of 2008. It shows the number of homes sold down 12% and the average sales price down 9%.
This is why I said demand is relatively weak, and it is. I did not say prices were low, but economics is all about the margin, so even if prices are high, if they're dropping that's not good for the local economy.
My point is that city and county government go out of their way to stick their fingers in the eyes of people who run businesses, or are thinking about moving here but realize they won't have any property rights.