For Michael A. Pagano, local municipalities went awry in designing fiscal systems during the 20th century by fabricating what he refers to as “a crazy quilt of local revenue.” He proposes some possibilities for getting cities back on track.
From Boston to Cincinnati to Tulsa, cities depend to largely varying degrees on property taxes, income taxes, and sales taxes as a source of revenue. Historically, however, Pagano points out, “[i]t wasn't always like this." Municipal governments used to rely more heavily on property taxes and on taxing the rich. Since the turn of the 20th century, states went from raising 45 percent of their own-source revenue from the property tax, to only 3 percent in the post-World War II era, despite such taxes remaining "a dominant revenue source for decades to come."
No matter what the tax source, however, the past five years have had a huge impact on municipal revenues. “The Great Recession is just the latest challenge to cities’ ability to raise tax revenues from various sources,” writes Pagano. “Increased unemployment, declining consumer confidence and other economic trends associated with the Great Recession have had a substantial impact on all sources of tax revenue for the nation’s cities.” Yet as cities seek out new ways of raising revenues in the form of user fees, while also looking to cut spending, Pagano asks, “Is the current fiscal architecture of a city a good one?” One major problem he points to is the “free rider” economic structure of many regions in which employment centers fail to capture tax revenues from commuters despite the provision of city services “during their 9-to-5 lives.”
So, what is the solution? Pagano proposes taxation “at the place of employment” as a means of better “[linking] cities to their underlying engines of growth or to income and wealth, similar in design to what the property tax attempted to accomplish two centuries ago.” He pushes the reader to “imagine” how this could change the “decision calculus” by which individuals, households and users of city-government services choose where to work and live, while “paying their fare share.” Pagano concludes, “It could be revolutionary.”
FULL STORY: How Our Current Tax System Is Failing Cities

Rethinking Redlining
For decades we have blamed 100-year-old maps for the patterns of spatial racial inequity that persist in American cities today. An esteemed researcher says: we’ve got it all wrong.

Planetizen Federal Action Tracker
A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

California High-Speed Rail's Plan to Right Itself
The railroad's new CEO thinks he can get the project back on track. The stars will need to align this summer.

Santa Clara County Dedicates Over $28M to Affordable Housing
The county is funding over 600 new affordable housing units via revenue from a 2016 bond measure.

Why a Failed ‘Smart City’ Is Still Relevant
A Google-backed proposal to turn an underused section of Toronto waterfront into a tech hub holds relevant lessons about privacy and data.

When Sears Pioneered Modular Housing
Kit homes sold in catalogs like Sears and Montgomery Ward made homeownership affordable for midcentury Americans.
Urban Design for Planners 1: Software Tools
This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.
Planning for Universal Design
Learn the tools for implementing Universal Design in planning regulations.
City of Camden Redevelopment Agency
City of Astoria
Transportation Research & Education Center (TREC) at Portland State University
Regional Transportation Commission of Southern Nevada
Toledo-Lucas County Plan Commissions