Might as Well Face It; We’re Addicted to Growth
My hometown has been making international headlines lately. Colorado Springs has become the poster child for local governments slashing services in response to declining sales tax revenue.
The budget-balancing challenges facing Colorado Springs are worsened by the recession and by voter reluctance to embrace tax increases. But the real story is that of an addict crashing. Unable to get immediate gratification from a quick fix of the addictive drug, the addict’s life crumbles. It is painful. It’s destructive. And to the addict, the solution is obvious – another hit of that elixir.
ABC News, National Public Radio, CNN and even Canada’s National Post have provided the latest high-profile glimpses of Colorado Springs:
CNN: City Removes Trash Cans, Streetlights, to Save Cash
NPR: Facing Budget Gap, Colorado City Shuts Off Lights
National Post: Cut the Lights, Fire the Cops, Let the Grass Go Brown: One City Just Says No to More Spending
ABC World News Tonight: Colorado Springs’ Extreme Budget Cut
These stories focus on removal of trash cans from parks, turning off streetlights and selling police helicopters, necessitated by the failure of a tax increase in last November’s election. None of these reports get to the heart of what is going on. That’s important for cities around the world, because the rest of the world shouldn’t miss the opportunity to learn from Colorado Springs’ mistakes.
Reporters repeat the assumptions of city officials: the recession has kicked our butt. Sales tax revenue has dropped and housing construction is at a standstill. That’s compounded by the fact Colorado Springs voters have declined to raise taxes. The city is in decline because the majority of residents are tightfisted libertarians who want their streets plowed when it snows but do not want to pay for it. I repeat, these are the assumptions.
What has not been clear to ABC’s Diane Sawyer or CNN’s Jim Spelman is that Colorado Springs is a junkie. And it is not alone. Like our national and global economies, Colorado Springs is addicted to growth. The city has been engaged in a Madoff-like Ponzi scheme, depending on growth this year to pay the costs of last year’s growth. And we’d need growth next year to pay the costs of growth this year – if only there were any growth this year.
This growth-addictive prosperity strategy for Colorado Springs has been apparent to me for years, as the city has consistently funded utilities subsidies for new subdivisions and economic development incentives to turbo-charge growth, all the while digging itself into a financial hole. Today the public infrastructure backlog stands at over $1 billion. A tax averse citizenry is part of the story, but not in the way you expect. Voters have kept the city from raising taxes fast enough to pay for the costs of growth.
The folly of this strategy was never apparent to elected officials. They operated on blind faith. Faith that growth would be the financial salvation of the city. Growth would provide more tax revenue. Growth would create a “vibrant” economy (everybody wants one). Money would be flying around in such quantities, everyone would prosper and the streets would be paved with gold. Of course if this strategy worked, then tax increases would not be necessary and a $1 billion infrastructure backlog would never have developed.
The unfortunate truth is we have left the era of growth, the era of unlimited bounty which guaranteed economies of scale. We finally grew to the point that revenues from growth don’t keep up with the costs. And when growth one year did not lead to prosperity the next, the conclusion drawn was we didn’t grow fast enough, or didn’t grow in the right way.
This delusion – and the insidious, addictive mania it feeds – have been kept alive by the constant IV drip of growth propaganda from the pushers. These are the growth profiteers – developers, home builders, construction contractors, bankers and news media. The growth boosters made sure the headlines always had that pro-growth spin, and they dominated the lists of campaign donors for city council and county commission elections.
Like a Ponzi scheme, Colorado Springs was able to – for a time – stave off financial collapse, betting on construction sales tax revenue next year to pay for the tax and utilities breaks – and servicing – of new communities built this year.
This is globally instructive because it’s happening in most cities. We cling to the notion there is a pot of gold at the end of the growth rainbow. Most politicians, chamber of commerce officials, and even everyday citizens have been programmed to believe in the benefits of growth everlasting. So they’re certain today’s ills are caused not by the inevitable crash from a destructive growth-addicted high, but by inadequate growth today.
This attitude was clearly demonstrated in last year’s Colorado Springs City Council race (I was a candidate). During a debate, I made the statement, “Growth cannot solve the problems growth created.” My opponent, the pro-growth incumbent, replied “Yes, growth is the problem; not enough growth.” At one point he said, “A synonym for prosperity is growth.”
Instead of clinging to this mythology, we should be learning what Bernie Madoff now knows: a Ponzi scheme cannot grow on forever.
Now, the housing bust and recession have put local and state governments into a tailspin. The growth addicts have crashed. And like any addict, they’re convinced the world will be better if they can just get another fix. States like California and cities like Colorado Springs should be picking up the pieces and swearing they will not stay hooked on that destructive drug called growth.
Yet Colorado Springs does not appear to have learned from this painful lesson. The city today contemplates borrowing $100 million, not to water the grass in its parks, but to complete an expressway needed to seal a proposed shopping mall deal. Sadly, struggling in the skid row of budget-balancing hell, they are not inclined to think about the long-term benefits of getting clean and sober. They feel the need, the need for another fix. So they’ll try to shoot up right now, on another hit of growth. Sounds a lot like our national economy, doesn’t it?
Dave Gardner is producing the documentary, Hooked on Growth: Our Misguided Quest for Prosperity
Find out more at www.GrowthBusters.org
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