Voting with Our Feet, Part 2: It’s the Taxes, Stupid
NOTE: Though this post is specifically about the Greater Cincinnati area, I believe that similar posts could be written about population trends in other metro areas around the nation.
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A couple of weeks ago, I reacted to and commented on a blogpost by Jeff Sinnard, who ran for Congress as a Democrat in Ohio’s 2nd District special election and lost to Paul Hackett, who ultimately lost to Republican Jean Schmidt.
Jeff is a reasonable guy, and had a reasonable post about how Hamilton County’s commissioners had “fired” (if this is properly using the word “fire”) all but one of the volunteer members of a Tax Levy Review Committee (TLRC), whose primary assigned task was to keep tabs on overall tax increase requests and make sure that in total they weren’t outpacing general inflation. The trouble, regardless of how you see the politics, is that they failed to do that:
The result: a 7.7 percent increase in 2005 property taxes.
Hamilton County has the third-highest tax bill when compared to Southwest Ohio and other large, urban Ohio counties, something that encourages people to leave, Heimlich and DeWine believe.
Jeff was wondering how members of an “independent” committee can get terminated, and it’s a legitimate concern, though I’ll point out that “independent” outside auditors like Ernst & Young or the unfairly-departed Arthur Andersen (read first item at post), who are considered “independent” even though they are paid by their client companies, often get fired by those same clients.
The much bigger question is whether high taxes “encourage people to leave.” Well, look at these total population statistics:
Hamilton County (000s) –
1970 - 924
1980 - 873
1990 - 866
July 1, 1994 - 873 (peak population year in the 1990s)
Apr. 1, 2000 - 845
July 1, 2004 - 815
Greater Cincinnati Metro Area (000s) –
(Metro Cincy including Northern Ky.; Hamilton-Middetown; Total)
1970 - 1,442; na; na
Apr. 1, 1980 - 1,467; 259; 1,726 (link is to a PDF, go to Page 72)
Apr. 1, 1990 - 1,526; 292; 1,818 (same PDF link as 1980)
July 1, 1997 - 1,607; 327; 1,934 (same PDF link as 1980)
2004 - na; na; 2,039
Hamilton County’s population declined steeply during the 1970s, stabilized during the next 14 years, and has declined dangerously (roughly 7%) since then. Meanwhile, during this entire period, the population of the whole region has moved inexorably upward.
Why is that? The usual culprits (as long as the areawide economy is stable or growing, which it generally has been) are crime, education, and taxes. Cincinnati (Hamilton County’s county seat) has had big problems with all three, but I don’t have any reason to think that crime or education have been big negatives in the rest of Hamilton County, at least until very recently. So all things being equal, you would expect those leaving Cincinnati (the subject of a future post) because of proximity alone to move elsewhere within Hamilton County.
But they haven’t. It’s difficult to reach a conclusion other than that people have in essence voted with their feet to leave Hamilton County for the one reason that remains: Taxes. The TLRC’s failure to do its job has hurt the county. The “firings” were justified. The tax-and-spend trend has to be reversed, or the exodus will continue.
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Nov. 26 Wizbang Weekend Carnival participant.
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Other “vote with our feet” posts:
- Part 1: What Thanksgiving Is Partially About
- Part 3: Walking Away from Academic Excellence
- Part 4: Leaving Cincinnati (and Other Ohio Cities)
- Part 5: Willisms Looks at State Migration Patterns
- Part 6: Losing the Very Rich
Be careful that you do not confuse “taxes” with “unbelievably large plots of land on which to build cheap and also unbelievably large homes”
Don’t believe me? Go to http://maps.google.com and search for Cincinnati. Change to the satellite view and compare the modern housing developments in N. Kentucky compared to the dense housing of Hamilton county.
Comment by Kevin Irwin — November 27, 2005 @ 4:54 pm
#1 Good point, up to a point. But I believe there’s still a pretty decent amount of open space in Hamco, especially west and northwest, that I would think would be better from a commuter convenience standpoint, except that taxes and red tape are too high.
Comment by TBlumer — November 27, 2005 @ 5:02 pm
I am having a little trouble following your numbers. Here are the numbers I found from the US Census Bureau.
Hamilton Co. Change
1900 409,479
1910 460,732 51,253
1920 493,678 32,946
1930 589,356 95,678
1940 621,987 32,631
1950 723,952 101,965
1960 864,121 140,169
1970 924,018 59,897
1980 873,224 -50,794
1990 866,228 -6,996
2000 845,303 -20,925
2004 814,611 -30,692
You said, “Hamilton County’s population declined steeply during the 1970s.†It looks to me that it peaked in the 70’s, with dramatic increases in the 50’s and 60’s. Look back at the 1960 number. Even after the “steep†decline of the 70’s we were still on an upward trend until 1990. What are the 14 years you are referring to? Sorry, this is me being an engineer. I am building a spreadsheet to analyze the numbers and want to compare apples to apples.
As far as conclusions, I think you need to establish causation. Actually a good first start would be to show correlation. Do you have historic tax rates? I have been looking but to no avail.
I did notice one number I find interesting from 1993 to 2003 Hamilton County lost 45,805 manufacturing jobs. I don’t know about you but about half of the moves in my life involved changes in employment. I doubt that the 1,150 laid off workers at GM’s Moraine Assembly plant are going to leave Montgomery County because of the taxes.
I am looking forward to your take on the decline of Cincinnati’s population. Especially when you consider that if you look at the County exclusive of Cincinnati there has been an increase in population.
You never know, you might be right, you just haven’t convinced me yet. I might be less cynical if every action of the County’s Republican commissioners wasn’t because they were “hoping to reverse population lossesâ€. I was almost convinced it was the taxes until I learned it was because of the City’s management of MSD. It would help if they keep to one mantra at a time.
Enquirer article
Comment by Jeff Sinnard — November 27, 2005 @ 8:27 pm
#3 Jeff, had to be away for a while.
Anyway, I reformatted your comment and changed the Enquirer article to a link because a long URL makes the blog wider (have to figure out how to fix that). No substance was changed, and the Enky link still works (it bombs my computer in Firefox, but it works (grrr).
Now to substance:
- The 50,794 pop drop you show took place from roughly April 1, 1970 to April 1, 1980, i.e. “during the 1970s”
- The “hold steady” period on my list is from 1980 (873K through 1994 (873)–I picked 1994 because it is when the pop peaked as indicated during the 1990s.
- The 6.6% drop from 1994 to 2004 is the immediate topic of discussion. Why did it happen?
I theorized three reasons, tried to eliminate 2, and backed into the third (taxes). It’s not the most elegant, but to me it gets the job done, along with the “third highest” statement in the original Enky article.
I don’t have the historic tables or whatever to support it. It’s not an unreasonable request, but this is a blog, not a research study. I will remind you that the Hamco sales tax increase for the stadiums was passed in 1995 or 1996, a sales tax not present in any other county, and that perhaps that was a tipping point, because it automatically made every other county look a bit more desirable. Also, only speaking for where my mom lives, the tax increase requests in the northeast Cincy suburbs (e.g., Sycamore) have been relentless.
Plus, over time, every little Cincy suburb has made sure to enact their little income tax, and most, if not all have made part of the tax non-reciprocal. Years ago, it used to be that you never needed to worry about paying your own suburb’s tax if you paid Cincy’s 2.1% (that was known as reciprocity), but over the years most of the suburbs have decided that you have to pay 0.5% - 1.0% to them over and above the 2.1% you pay to the city, whittling away at the reciprocity. The absolute tax rates, and the non-reciprocal percentages, have been creeping upward over time. So people who work in Cincy and live in most municipalities in the suburbs are paying combined city taxes of maybe 2.6% - 3.1% (perhaps higher in some instances).
Meanwhile the vast majority of areas in Clerco and Warren do not have any kind of city income tax, so they end up paying city tax only where they work, if it happens to be in an area city.
I’ll also note that the 7.7% increase noted in the article is double inflation, and an indicator that the TLRC, which may have nice enough people on it, wasn’t doing their primary assigned task.
I’m going to have to admit I’m not certain about the MSD situation, simply because I don’t know for sure how the costs are paid. If it’s part of the water bill, I would say it’s irrelevant. If it’s an element of property taxes that they need to control (which I “think” it is), then if it’s not run well it IS really part of the tax problem. It also appears from reading the article that the county may not have any or enough control over where new sewer lines go, and if that is preventing new home construction within the county because the city-run MSD is dragging its feet or doesn’t want to work with the county, that’s just dumb.
Now, I’m going to look at Cincy to give myself a head start on the next post and address your contention that all of the county pop loss occurred in the city. 2000 and 2003 are from a census bureau page, and 1990 and prior are from here, which I haven’t verified but which looks dead on (I’ve followed these types of things for years):
1960 - 502,550 (almost the same as the 1950 peak)
1970 - 452,524 (10% decline from 1960)
1980 - 385,457 (14.8% decline from 1970)
1990 - 364,040 (5.6% decline from 1980)
Cincy 2000 - 331,285 (9% decline from 1990)
Cincy 2003 - 317,361 (4.2% decline from 2000)
I couldn’t find year-by-year data during the 1990s for Cincy like I could for Hamco. Cut me some slack here and let me assume that Cincy’s pop was 350,000 in 1994, which would assume steady decrease throughout the decade. The pop declined during the next 9 years to 2003 by roughly 33,000–so for comparability let’s assume another 4,000 moved out in 2004, leaving Cincy with 313,000, or a decline of 37,000 during the decade. Hamco’s decline during the same decade of 1994-2004 was 58,000 (873-815). So about 64% of Hamco’s pop decline (37/58) occurred in Cincy, and the rest (36%=21/58) occurred in the remainder of Hamco.
So the rest of Hamco has indeed been losing population in the last 10 years, not as fast as the city but still significant (about a 4% drop during that 1994-2004 decade, 21 divided by roughly 500,000 non-Cincy Hamco residents), which I trace, but admittedly not scientifically and more by process of elmination, to taxes.
Comment by TBlumer — November 27, 2005 @ 11:45 pm
I realize this is a blog, not a research study, so I am more than willing to cut you some slack on the numbers. But I do have a criticism. By comparing 1994 to 2004 you are forced to assume some of the numbers. (We all know what happens when you assume.) The “real†numbers from the census are at the decade points. If you look at the relative decline between the County and City for years that we have real numbers the City has posted larger losses than the County. So that between 1970 and 2000 the county lost 78,715 while the City lost 121,239 or 42,524 more than the County.
It would seem that as goes the City, goes the County. I look forward to your views on flight from the City. I personally suspect it is in part items 1 and 2 from your list with a lot of “unbelievably large plots of land on which to build cheap and also unbelievably large homes†as Kevin stated above.
Comment by Jeff Sinnard — November 28, 2005 @ 12:12 pm
#5, Jeff, i think 20 years is too long a stretch for a lot of reasons. Looking at decades only except for 2003, which I looked up for county (2003 pop–822,610) to finish this (an Excel file that has to be downloaded from here:
1970-1980 — City down 67K, entire county down 51K, rest of county gains 16K
1980-1990 — City down 21K, entire county down 7K, rest of county gains 14K
1990-2000 — City down 33K, entire county down 21K, rest of county gains 12K
2000-2003 — City down 14K, entire county down 9K, rest of county loses 5K
2003-2004 — City not known, entire county down 8K, “guessing” that half of loss was city, half rest of county.
Your premise holds on even decades until 2000, then the county starts losing too. But as noted, based on census annual estimates, it really started after 1994. Revising my previous comment to 1994-2003 instead of 1994-2004, the city (”assuming” 350K in 1994) lost 33K, the entire county lost 51K, so the rest of the county lost 18K.
The out-migration from Cincy to the rest of Hamilton County hasn’t ever been 1-for-1–far from it, but instead the big gains were in the outlying counties and Northern Kentucky. The out-migration from the rest of Hamilton County in hte last 9-10 years is undeniable.
I don’t doubt that land is part of it, but people also want to live reasonably close to work and shopping, etc., unless there’s a compelling reason not to (i.e., crime, education, and taxes in the city, taxes in the county). The shopping didn’t follow the people out to the outlying counties in Ohio until at least the early 1990s. The jobs leaving the city and coming out to places outside Hamco has been happening for decades, but I don’t have any numbers.
Comment by TBlumer — November 28, 2005 @ 12:26 pm