Blaming the Victim: An Examination of the Life Cycles of Local Governmental Units and Their Relation to Urban Sprawl

Abstract

This paper is an examination of the life cycles of local governmental units and the role of urban sprawl within the cycle. The study area for the project is a 14 county area in Southwest and Southcentral Michigan, including a deeper case study of the Kalamazoo area. As seen in the background section, much has been written - both good and bad - about urban sprawl as well as the problems that central cities face, but little has been done to systematically determine how sprawl affects local governmental units and where the blame should lie for central cities' problems. This paper is in response to that void and will examine the interaction between urban sprawl and local governments. The first analysis of the paper is a regression that models the tax rate of a governmental unit as a function of its percent change in population over the previous four years, percent change in density over the previous four years, and the difference in the commercial to commercial plus residential SEV ratio over the previous four years, as well as city, central city, and charter township dummy variables. It is expected that population will have a positive relationship to the tax rate, while density and the ratio will have negative relationships. Additionally, the dummy variables are all expected to have positive relationships. The justification for these expectations is that as population increases more services must be provided, as density increases economies of scale are realized and tax rates decrease, since commercial properties have fewer costs associated with them as the proportion of commercially developed land relative to commercially and residentially developed land increases the tax rate will decrease, and the nature of the dummy variables indicate a higher tax rate. After running a regression analysis, all variables are significant and related as expected with an R2 value of. 7662, making it a relatively good fit to the data. These results show a system of local finance that provides incentives for sprawl while the tendencies of urban sprawl such as lower densities in central cities and commercial development taking place in the suburban areas are undermining the fiscal situations of central cities. The second analysis is a case study of the City of Kalamazoo, the City of Portage, Oshtemo Township, and Texas Township. The first topic examined is the growth rates of their total expenditures. Nominally they all show growth; however, when viewed in terms of real dollars the growth rates are much lower or stagnant. The critical piece of this analysis is the introduction of a theoretical growth path of the expenditures of local governmental units experiencing growth that follows the pattern of urban sprawl. This theoretical model is supported with evidence collected from the four municipalities of the case study. The results of the analyses of this paper show a clear incentive for urban sprawl in the structure of local financing system as well as clear indications that the central cities are often not to blame for the problems they face. Furthermore, the case study advances and supports a theoretical growth path for local expenditures. The hope of the paper is that these analyses will show that sprawl is damaging to central cities and actually causes many of the problems they face while providing insight into the evolution of local governmental units under the pattern of urban sprawl type growth.