Study after study over several decades has found that better infrastructure – like well-paved municipal roads - means better business for cities.
Yet the Hicks-Hudson administration last week recommended that Toledo City Council not consider an increase to the city income tax to help fund road repaving, instead urging council to put the city's temporary 0.75 percent income tax on the March, 2016, ballot for renewal.
Toledo's income tax has remained constant for 33 years at 2.25 percent.
Voters must renew the 0.75 percent temporary tax every four years. Increasing the temporary portion to 1 percent would generate another $16 million.
Janette Sadik-Khan, commissioner of the New York City Department of Transportation from 2007-2013, in a letter that prefaced a 43-page report on the “economic benefit of sustainable streets” declared “Better streets mean better business” and “attractive public space and better designed streets are not simply aesthetic or safety improvements.”
Ms. Sadik-Khan, and the report, said better streets attract people, activity, and strengthen communities and its businesses along with the municipal economy as a whole.
A recent survey of corporate real estate executives conducted by Site Selection Magazine placed “transportation infrastructure” third behind “existing workforce skills” and state and local tax scheme” as the most important location criteria for businesses.
Mark Arend, the magazine's editor in chief, said the top needs of companies varies.
“A number of years ago, energy was at the top of a lot of people's lists,” Mr. Arend said. “More recently, access to the right workers tends to be most important.”
The American Recovery and Reinvestment Act, the economic stimulus package signed into law by President Obama in 2009, was pushed as a way to improve America’s infrastructure along with increasing employment.
An Oct. 11, 2010 report from the Department of the Treasury said: “Many studies have found evidence of large private sector productivity gains from public infrastructure investments, in many cases with higher returns than private capital investment.”
But, in 2013 the American Society of Civil Engineers said enough had not been done – especially with streets.
The group's report that year gave American infrastructure overall a D+ grade. It found that the country needed another $3.6 trillion between 2013 and 2020 on infrastructure investment rather than the $1.6 trillion that would be spent.
The greatest need nationwide was with roads and the group said Ohio's roads were in poor shape.
“With over 125,000 miles of roads, Ohio has one of the largest and most utilized roadway networks in the United States,” it said. “Forty-three percent of Ohio’s roads are in critical, poor, or fair condition.”
Toledo Mayor Paula Hicks-Hudson acknowledged that something needs to be done about Toledo's roads and promised a plan to fix more roads.
At its current spending level, the city's roads continue to deteriorate more and more every year, said the mayor's top street engineer.
Doug Stephens, the city's commissioner of engineering services, said Toledo needs $1.1 billion over the next 20 years to fix all of its streets.
That comes to $55.5 million annually, but Toledo typically spends less than $20 million a year to maintain its streets, Mr. Stephens said, and about two-fifths of that money comes from state and federal sources that can only be spent on commercial roadways.
With that kind of money, the city is on a ''every-50-year replacement cycle'' when it should be on a 20-year cycle since streets typically last that long, Mr. Stephens said.
At the same time there has to be a balance with companies are weary of increasing taxes to maintain things like a city water system and roads, said Calvin Lawshe, Toledo economic development director.
“That is the great challenge of any city that has been around for any period of time,” he said.“Infrastructure is very important and cities likes Toledo, Columbus, Cincinnati, [and] Cleveland are all trying to keep up with that challenge,” he said.
Mr. Lawshe acknowledged increasing taxes for infrastructure costs presents a double-edged sword for cities.
True, the extra money could be used to fix more streets that might appeal to businesses, but the higher taxes might scare off potential business or even compel existing businesses to search for a township location with no payroll tax, he said.
“I agree that better streets make it easier to lure businesses,” Mr. Lawshe said. “Our ultimate goal is jobs and we need to assist new businesses and those retaining jobs here.”
Councilman Lindsay Webb, chairman of council's utilities and public services committee and also the District 6 councilman who represents North Toledo and Point Place, said she was surprised the mayor did not “change the status quo” of the income tax.
“I certainly think we should be strategic about the streets we prioritize,” Ms. Webb sad. “When there is major investment those streets should be in premo condition. Bancroft in front of the University of Toledo looks atrocious. It's a major institution that draws a lot people from outside our community and the streets in and around should be a priority.”
Likewise, streets around major institutions like hospitals should be in good shape, she said.
At the same time, Ms. Webb said she is lobbying to get residential streets in her district on the list of roads to be repaved or reconstructed.
Gbenga Ajilore, a University of Toledo associate professor of economics, said there the direct link between infrastructure and economic development that has been backed-up by numerous studies.
“That includes airports, business, roads, bridges, and it has impact on economics growth,” Mr. Ajilore said. “One of the biggest reasons why is because it helps in terms of being able to function and produce efficiently. This is well-known that spending on infrastructure has a boost on economic growth but the biggest issue is how you pay for it and that is is always where we get stuck.”
Contact Ignazio Messina at: imessina@theblade.com or 419-724-6171 or on Twitter @IgnazioMessina.
First Published December 6, 2015, 5:00 a.m.
