This is no secret anymore.
Fifty years ago, Charlotte and Norfolk were comparably the same size. Today? Charlotte has an economic impact over Norfolk by a factor of 20.
The secret? Regionalization…
“While some individuals apparently prefer to believe otherwise, Hampton Roads is an economically integrated and interdependent region,” said the study, written by Old Dominion University economists Jim Koch and Vinod Agarwal. “Like it or not, our cities and counties depend upon each other, complement each other, and feed off each other’s success.”
The report, citing Census Bureau data, said 65 percent of Hampton Roads residents traveled to another city for their jobs in 2013. That was up from 61 percent in 2009.
“We’re increasingly mobile,” Koch said last week. “We don’t pay nearly as much attention to our city or county borders as our elected officials do.”
Only 26 percent of people who worked in Norfolk lived there, said the study, titled “Our Jobs Are Also Your Jobs.” Virginia Beach was the only city where a majority of workers – nearly 55 percent – also were residents.
The lesson? Cities should work together – not compete against one another – to attract businesses, Koch said. Even if a company doesn’t set up shop in a city, that city will reap “spillover” benefits.
The entire Virginian-Pilot article (and the report itself) is worth reading in their entirety. Jim Bacon over at Bacon’s Rebellion has more insight on the matter:
What applies to Hampton Roads applies to every other metropolitan region in Virginia. Nowhere in Virginia do political boundaries coincide with economic boundaries. From a regional perspective, economic development is best pursued as a regional enterprise.
Koch and Agarwal highlight an important insight, although they do overlook a critical facet of economic development that will not change without a dramatic re-write of Virginia’s tax code: The locality where a new warehouse, manufacturing plant or corporate facility locates captures 100% of the property tax revenue. Because property tax is the largest single source of local revenue in Virginia, local governments are highly motivated to see to it that a particular project lands within their boundaries. Unless subsidies are offered to attract the investment, such facilities are a big winner for the locality in question because business operations require little in the way of public services. Indeed, the fact that 2/3 of a company’s employees are located outside the jurisdiction means the locality in question is saddled with the cost of providing educational and other government services to only 1/3 of the workforce. Thus, ironically, the more economically interdependent the localities of a region are, the more local governments are incentivized to capture the tax benefits of bagging a corporate investment.
The fly in the ointment has always been the threat of a “fourth layer” of government — regional authorities that are unelected and unaccountable, but in a position to levy taxes, fees, fines, and other levies.
The grand solution is to hold them accountable to elected officials in some manner, but then again, the devil is always in the details. The economic benefits would far outweigh the detriments, provided one can realize a way of creating more regional co-operation without surrendering the prerogatives of local government and the citizens of Virginia.
