In theory, it could happen. Here’s Otis White:
[T]here’s no reason cities couldn’t have taxes as low as, or maybe even lower than, their suburbs. After all, most have ample tax bases (all those skyscrapers and other commercial areas) and fewer children per 1,000 population to educate. That they don’t have lower taxes is usually attributed to two factors: a needier population (although with gentrification this is changing somewhat) and more difficult municipal worker unions. But there’s another reason: In the past, big cities haven’t tried very hard to be efficient.
He points to New York’s Michael Bloomberg as a mayor who is applying some CEO know-how to city government in hopes of making it more efficient. His approach is a simple oneââ?¬â??measure government’s performance. There’s even a report that attempts to do this. It notes, for example, that
New York’s transportation department filled 190,626 potholes in 2004, up sharply from 101,280 in 2002, and that it now repairs 96 percent of potholes within 30 days of notification. You’ll also learn that autopsy reports are being completed faster (72 percent are issued within 90 days of the autopsy, up from 67 percent in 2002) but that death certificates are dawdling a bit (89 percent are issued within four hours of an autopsy, down from 93 percent in 2002 ââ?¬â?? and well below the goal of 95 percent).
OK, so score one for Big Apple efficiency, but take a step back and efficiency doesn’t look so good:
City-funded operating expenditures under the newly adopted 2005 budget were slated to increase by a record $3.1 billion, or nearly 10 percent, according to projections in the June financial plan. Excluding federal and state grants, the cost of running city government is growing from $31.9 billion to $35 billion. If this trend remains unchanged, the overall increase in city-funded expenses during Michael Bloomberg’s first three years as mayor will reach 21 percent – more than double the inflation rate. Relative to New Yorkers’ personal income, this measure of spending will reach its highest level in more than a decade.