"Two Fat Kids Fighting"

How unseemly has the competition for tax base gotten among cities? So unseemly that the mayor of Gilbert, Ariz., a suburb of Phoenix, said of one episode that it looked to him like "two fat kids fighting over a single piece of chocolate cake." And consider this: Gilbert was one of the fat kids.

Cities everywhere do this, of course — try to lure or annex developments that promise a boost in the tax base — but it seems to have gotten out of hand in the Phoenix area lately, as cities offer big incentives to Wal-Marts and strip malls to come inside their jurisdiction and bring their sales tax revenues. Phoenix Mayor Phil Gordon, for one, thinks it ought to stop, and he has a way of dampening the competition, by municipalities agreeing to share revenues. "The city that gets the retailer gets the overhead for police (and) fire, and then the rest of the money is split 50-50 or per capita," he proposes.

Some mayors agree. "I think (the tax-sharing idea) needs to be explored more," said the mayor of Chandler, the other "fat kid" in the dispute. "The need to do this and play down the competition is critical. It's getting to the point where these border battles threaten to undermine business." But the mayor of Gilbert is skeptical. "The question I ask is, with (whom) and under what circumstance do you share? It's way more difficult than it looks," he said.

Footnote: So what were the fat kids fighting over? A pair of auto dealerships. In the end, they agree to allow one dealership to be built in Gilbert, the other in Chandler. Posted 9/1/2004