Reduce Property Taxes by a Third: A Lesson from Australia

Article excerpt

Practicality And Good Business Sense Should Be The Motives

Is it really possible to cut property taxes by a third without losing any quality in local services? The answer is yes - if you are willing to try some radical solutions. That is what the citizens of the Australian state of Victoria have done. Victorian state government went from a $4 billion deficit in 1992 to a $1 billion surplus in 1996, with a net gain in total statewide employment, notwithstanding the loss of 75,000 public sector jobs during the same period.

As the manager of Canandaigua, New York, I went down there for three weeks this year to see how this was done. I was accompanied on the trip by Canandaigua author and journalist Jack Jones. Jones asked the state's minister for finance and local government if "economic martial law" was too strong a term for what Victoria had implemented. After pondering for a moment, the minister smiled and said that he didn't think so. Within four years of the start of the experiment, a stagnant economy had been revitalized, local government had been dismantled and reassembled, and the spirit of innovation and competition had infused every level of government.

After meeting with the state's top policymakers and spending time in communities much like Canandaigua, I came away convinced that North American managers could learn a lot from these colleagues working half a world away.

Shared Characteristics

Situated at the southeastern corner of the Australian continent is a beautiful and productive land much like western New York, where I work. Eastern Victoria has rugged mountains, some of them 6,000 feet high, and according to my fellow traveler, Jack - who has climbed all 46 of New York's high Adirondack peaks in winter - Victoria's mountains are much like those of New York.

To the west, much of Victoria's remaining land is cultivated in fruit orchards, a wide army of food crops, beef and sheep production, and a large and dynamic wine industry. Victoria's expansive south coast is a tourist's delight: a mix of rugged mountains with access roads carved into their sides and charming waterfront communities like Canandaigua.

As in my home state, one large city, Melbourne, dominates the urban scene, with 3.2 million residents. There is even a similar social and cultural gap. The area outside of Melbourne is referred to as "the Bush," even though it contains any number of urban communities comparable to or substantially larger than Canandaigua. But unlike New York City, Melbourne is clean and safe, a place where a morning jog or an evening stroll is not a risky venture. Melbourne also is a growing business hub, a major Pacific Rim port, and increasingly a repository for American investment.

The standard of living in Victoria also is comparable to ours. Neighborhoods share similar characteristics, with a full range of housing options, both apartments and single-family residences. Family farms dot the rural landscape, and judging by my own observations, public housing projects are tidy and well integrated into their communities.

Highways also are similar, except that there is no deep frost to levy its toll on highway users. The state maintains a modern system of divided, four-lane arterials and two-lane highways linked to local roads and streets. This fact does not mean that there is no challenge for Americans in driving in Victoria. I had to take care not to drive on the wrong side of the road (or worse, to step off the curb to cross the street and instinctively look the wrong way).

Children experience a comparable school environment, with buildings, grade levels, and courses of instruction much the same as ours, with of course some differences, such as the option of taking Indonesian in middle school as a second language. Interestingly, fewer high school graduates go on to higher education than in the United States. There seems to be more eagerness to get right into the workforce. …