Taxes versus services: Municipal service provision in growing rural communities

Abstract

Planners and administrators in North American rural communities proximate to cities have struggled over the last decade to cope with expanding populations. Amongst the questions posed by this population growth, those associated with the municipal provision of services are considered to be of paramount importance by many commentators. This article examines conventional wisdom on the service-provision implications of rural population growth in light of evidence gained through surveys of rural residents in an urbanizing region of Southern Ontario, Canada. A trade-off game is used to produce budget-constrained community preferences on priorities of municipal service provision; preferences are shown to be more complex in their relationship to residents' characteristics, such as length of residence, than is often suggested in the literature. Moreover, when asked to indicate their preference concerning the broad trade-off between service levels and taxes, 41 percent preferred the status quo and 40 percent opted for increased services and taxes, whilst only 10 percent preferred to save on taxes by sacrificing service quality. It is suggested that policy makers consider carefully the design limitations of survey instruments prior to phrasing policy on service provision. In situations like those created by Proposition 13 in California and Proposition 2 1/2 in Massachusetts, the implications of budget cuts became apparent to residents only as services seriously deteriorated or disappeared altogether. By conducting a trade-off game or some suitable alternative, the implications of tax changes for service provision became apparent to residents without the changes having to occur in reality.