Comment on this story

That’s us, folks; it’s where we’ve been hiding

The tax situation in Tennessee in general, and in the Knoxville area in particular, is a bit paradoxical, as Mike Gibson’s cover story in this issue illustrates.

While we don’t like taxes, we want a high level of services from our government at all levels. That’s a universal given. What’s odd here is that we pay among the lowest total tax rates in the nation in terms of combined state and local taxes and still tend to look askance at any tax increases. We’re fourth from the bottom in those total tax bills. Do we get a good deal for our money? Yes, if you listen to people from other areas of the country who have been moving here in droves. No, if you’re a native East Tennessean or have been around here for a long time.

Setting education aside for a second, we’ve been getting an extremely high level of state and local services for what we’ve been investing. The same could be said for education, except that our expectations for educational quality are—and should be—higher than for any other public service. From the ways we treat our public schools establishment, our expectations are not all that high. We just get by on what we spend. It’s evident that that’s what we do. It’s also apparent that we get away with it to some extent.

Besides learning once again this week that we’re a low-tax area, we find ourselves high on the list of large markets (metro areas with populations exceeding 500,000) best suited for relocating families. In a survey conducted for the relocation specialty consultants Primacy Relocation and the Employee Relocation Council, the Knoxville area came in third out of 50 possibilities. We rank behind only the Austin, Texas, area and the Middlesex, N.J., area. We’re well above Nashville and many other seemingly appealing places. The reasons are the usual, the ones often cited in such studies as Money magazine’s “Best Places to Live” and the Places Rated Almanac to rank Knoxville highly. Tax rates are included, along with other factors, such housing costs and values, local services and amenities, recreational opportunities, and crime rates. For the relocation survey, such family concerns as ability to qualify for in-state college tuition and the local level of volunteerism were added. We did well. But remember, we often win out over other localities because of the scenic beauty of our area, all other things being equal.

So, we get by on our school spending. That shouldn’t be enough to satisfy us, but it seems to have been so for decades, and it hasn’t yet crippled our ability to attract new people and investment to our area, but it will in the long run, looking ahead into the 21st century’s requirements for Americans if they want to stay apace with the rest of the world.

There is great anxiety in America today about the exportation of jobs in computer technology to India, for example. That is not simply a function of lower costs, even though that is important in a free economy. What makes the difference is that great numbers of young people in India have the education level and the training in computer skills to perform the jobs well at a lower cost. If we wish to retain jobs in the tech sector, our education and training levels must rise, absolutely.

Some improvements are already being financed here by the state, with its community college system and its new, lottery-driven wider opening of the doors to higher education. All well and good. We’re doing less than ever in the way of preparation of our children for those challenges by scrimping on K-12 schooling expenditures, and we cannot continue to stay on the cheap and hope to keep our young people at home and bring in new business and industry.

Our low overall tax bills are not a bad thing. They give us the window of opportunity we must have to raise the revenues we need at the local level to bring our schools up to par, at least to the levels already attained by neighboring Maryville and Oak Ridge.

We can’t get by on our good looks forever.

June 17, 2004 • Vol. 14, No. 25 © 2004 Metro Pulse