Thursday, April 14, 2011

The Small Business in the Low Tax Revenue Environment (and Why the Darjeeling Cafe Still Is NOT Open)

Lately, there's a lot of talk about how the city is gumming up the works in Staunton, VA. I don't totally agree. There's an issue that's got some people riled regarding the noise downtown after 11pm. City Council will vote on it tonight. About a hundred people claim to be attending. That's quite a bit for Staunton City Council.
The problem I have is that this is a non issue as long as there are not enough services downtown to actually provide a healthy environment to businesses. There will be no businesses downtown because there won't be anyone with any jobs or money to patronize them in a way that will keep them in business. And lowering taxes is not going to bring them back in a million years. Here's why:

The Darjeeling Cafe has been under construction for one (1) year. Part of the reason it's taken us about twice as long as everyone expected is due to the building inspector situation in Staunton. The building inspectors are good ones I think, but there are only two (2) of them. Now, two (2) might seem like enough, right? Well, you'd be wrong about that. What if one gets sick? What if one is on vacation? What if one gets sick while the other is on vacation? And that's where we are right now.
Two (2) building inspectors are not enough, and the only reason we don't have more is because everyone wants to keep taxes low. Everyone wants to keep business license fees low. Everyone wants to keep parking ticket fines low. The truth is that when you keep everything low, there's no money to pay teachers and garbage collectors and cops... but there's also no money for building inspectors, health inspectors, fire inspectors, and unless you trust businesses to always do the right thing, these people are necessary for businesses to exist. Right now, we're supposed to have five (5) building inspectors, and we only have two (2). Right now, the Darjeeling Cafe is waiting to open its doors and employ twenty (20) people, but it can't because there are only two (2) building inspectors. You see the problem? You see how easy the math is? Taxpayers keep a small number of people employed in order to encourage employment in the private sector. When cities cut their budgets, the dumb taxpayer thinks, "thanks, city hall," when what he should really be saying is, "will businesses be able to open in this town?"

The same thing goes for schools. If you don't have good schools, no one will want to live in your town. If no one wants to live in your town, no one will work in your town. No one will be able to sell houses. No one will be able pay real estate taxes. No one will get parking tickets. The city will be more on the ropes than ever... etc., etc., etc.

Some of you will say that there needs to be lighter regulation on businesses, but that's when people start burning alive in buildings, and no one likes that.
Some of you will say that low taxes will allow more businesses to come here because they won't have to share as much with the city, but that means waiting around more for people like sewer service people and the various inspectors I've already mentioned, and everyone knows that time equals money.

The tax-free or low-tax environment is a bad one for businesses and for communities.

No comments:

Post a Comment