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by xyzzyz
895 days ago
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> American cities and suburbs are so low density that they end up losing money because infrastructure is spread out over such a large area that taxes collected per square mile aren't enough to keep things working. This is very much false. I don’t know why this misinformation is so widespread, but even a glance look at the municipal budgets is enough to see the facts contradict it. The typical suburb only spends around 10% of its budget on infrastructure, and this spend is dwarfed by educational spending by a lot. |
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Newer areas do fine. Infrastructure eventually needs not just maintenance, but massive replacement.
Roads, bridges, sewer systems, all start to fall down. Ideally a city would estimate the worst cost of replacement at the time infrastructure is first built, and set aside money from year 1 such that the replacement cost is fully funded when the roads/pipes/bridges wear out.
If that ever does happen (and maybe it has happened a couple times in history) what will end up happening is some candidate for city council comes along and says they can reduce taxes, just vote'em in, and now all of a sudden the "50 year in the future replacement fund" is no more.
There is of course the economic argument that saving money in the bank with crap interest rates is terrible finances, and that it is in fact better for the city to just borrow 50 years hence, but the counter argument is that low interests were a recent anomaly in US history.
(The investment options cities have for where they can save money for 50 year later projects are fairly limited, which is another point against cities saving money up).
Now, a bit ironically, large condo and townhome associations in many cities are required to have savings sufficient for future expenses. These laws were passed because without the backing of "the city is making us" board members on HOAs will quickly get kicked out the second they propose a budget that actually covers future expenses. In cities that don't mandate responsible reserve funds on the part of HOAs, what you find is tons of complexes are underfunded because despite having a (mandated by law) prepared document of future expenses, the can is just kicked down the road.
(cities do have reserve funding, but rarely do those take into account all future infra needs)
> The typical suburb only spends around 10% of its budget on infrastructure, and this spend is dwarfed by educational spending by a lot.
I opened the budget for the city of Kirkland WA[1], which is obscenely well run financially (they regularly run a surplus despite Washington state having a law capping properly tax increases are below inflation levels, a law which has slowly starved many cities of funding), and capital projects are over 25% of the budget. Just water and sewer appears to be around 13% of the city's overall budget.
Looking at Seattle's budget, a city that other countries would call "low density" (and honestly, in some countries Seattle is small enough that it wouldn't even be considered a major city!) of a nearly 6 billion dollar budget, 2 billion is spent on utilities. As someone who lives in Seattle, I can attest that one of the current problems we face is our sewer system is way behind the times and needs lots of updating, but again, no money.
Shoreline WA [2], 22% of the budget goes towards utilities ($82.809m), about 38% goes towards capital projects ($136.065m).
Washington State is actually a bit odd in that district funding largely comes from the state, by way of property taxes, but even so let's compare the funding for schools to the rest of a city's budget.
Shoreline School District has a budget of around 160 million [3], which is less than the city spends on utilities + capital projects.
Is it a huge chunk of the city's budget? Yeah. But by no means do educational expenses dwarf other city expenses.
[1] https://www.kirklandwa.gov/files/sharedassets/public/v/2/fin...
[2]https://www.shorelinewa.gov/home/showpublisheddocument/57270...
[3]https://resources.finalsite.net/images/v1694655298/shoreline...