(March-April 2010 GroundSwell)
By Frank de Jong, Toronto, Ontario, Canada
The City of Toronto plan to levy
billboard space is a creative way to help finance city services without
negatively impacting the city's economy.
The fees, which will range from $850
to $24,000 a year depending on the size and type of billboard, will return to
the city the unearned income that accrues to billboards (and other desirable
finite assets), known to economists as "economic rent".
Economic rent is the windfall profit
-- above a healthy business profit -- that results from monopoly control of
assets like billboards, locations (especially land near water, parks, transit
stops, hospitals, schools), parking spaces, taxi licenses, oil, the EM
spectrum, some generic internet domain names...
By this astute action, Toronto City
Council will return $10.4 million a year of the publicly-generated wealth that
flows to billboards, back to its citizens to whom it rightfully belongs,
instead of allowing it to be pocketed by billboard owners.
Repeating this example, cities and
towns everywhere could untax businesses and buildings, reduce transit and
recreation fees, and instead finance transit, culture, recreation, police and
fire by collecting the unearned economic rent that accrues to land, public
infrastructure, billboards, taxi medallions, attractive locations, access to
roads, parking.
Unlike job-killing taxes on
productive businesses and user fees on quality of life activities, economic
rent is an ideal source of city revenue. Since rent is unearned income, those
asked to pay it cannot pass it on to other citizens. Additionally, rent
recovery is a politically attractive, free market mechanism that improves land
use and housing stock, creates jobs, and provides an incentive to new business
start-ups.
- Australia has been collecting
billboard rent for many years, with some prominent locations producing $100,000
pa per year.
- 17 million people yearly pass the
billboards at Dundas and Yonge.
- Alternatively, many feel billboards
should be banned as in Vermont, Alaska, Hawaii, Maine.
(Editor's note: Frank de Jong may be emailed at <fdejong@sympatico.ca>)<<