To BID or not to BID
Government coercion no solution to downtown issues
by Tim Peck | Mountain Xpress | 8/21/2012
The basic idea behind the business-improvement district proposed for downtown Asheville is a good one: people working together to solve shared problems that tend to hamper or impede the conduct of business and peaceful living. Graffiti, vandalism, snow, trash, debris, crimes and misdemeanors are real issues — but solutions to these and other problems can be effected individually or cooperatively.
Individuals can re-paint exteriors, sweep and shovel sidewalks, install cameras and escort friends to their cars at a cost only to themselves. When a lot of people need to do many of the same things, however, cooperation is often the most effective approach. They can form associations, prioritize concerns, pool resources and take action at a lower cost, thereby freeing individuals from tasks extraneous to the primary focus of conducting business and living well.
But cooperative action should be voluntary. Instead, the current BID proposal calls for local government to use police power to lay a special tax on select stakeholders. The money would fund a nonprofit responsible for overseeing the delivery of special services within the central business district.
This proposal is legally authorized by the state constitution and the General Assembly. City Council, the law says, may implement a special tax in a designated area by majority vote. And if it does, it can either provide the specified services itself or contract with some other entity — whether governmental, nonprofit or for-profit — to do so.
This organization’s continued funding would be contingent upon its fulfilling the stated mission, as determined by some as-yet-unspecified measure. The current proposal includes a role for a corps of so-called “ambassadors” whose function appears vague, dubious and a stretch of the definition of “improvement.”
My reading of the legal authority for a BID tells me that it is entirely a creature of government. Accordingly, it should be subject to North Carolina’s transparency laws (open meetings, public comment and local-government oversight) similar to how the mismanaged, now-defunct public-access group URTV was treated.
The alternative, coercive method is, of course, to expand local government, hire dedicated staff and increase taxes citywide to benefit a minority interest. This solution would likely meet with even greater resistance than the smaller-scale proposal now on the table.
In a free society, voluntary association and freedom of contract are the proper means for supplying a public good. For a community of people seeking harmonious resolution of commonly identified issues, involuntary association and coercive taxation should be adopted only as a last resort, if ever.
Critics of this kind of voluntary approach often cite two principal concerns: 1) the risk of an ongoing funding shortfall; and 2) the problem of the "free rider" syndrome.
A funding shortfall emerges when some stakeholders fail to see the benefit and decline to contribute, thereby frustrating success. This could be due to the typical problems that attend the use of persuasion. Or it could simply be an accurate perception of an unfavorable cost-benefit ratio: Those who opt out are voicing their skepticism.
The "free rider" objection is a flawed and ultimately unsupportable argument. The fact that an unsolicited benefit accrues to some nonparticipants is insufficient justification for resorting to wholesale coercion to supply a public good. If we wish to live in a free society, we must contribute to the existence of such a society by avoiding the use of force against our neighbors. This is a non-issue, because: 1) free riders don’t prevent participants from gaining the intended benefit; 2) free riders haven’t asked for the alleged benefits; 3) free riders’ nonparticipation doesn’t violate others’ rights; and 4) a nonparticipating beneficiary risks condemnation, isolation and potential material losses. For example, if free riders do reap any unearned benefits, they could quickly lose them due precisely to their nonparticipation. And informed, activist consumers could stop patronizing those businesses, thereby precipitating a loss of both profitability and social acceptance.
Do our central planners really expect residents and entrepreneurs to stick around for a tax increase when they can scarcely lay a finger on any advantage in it for them? And when advantages are evident, there’s no shortage of people working together voluntarily to do what is actually in their shared interest. The Asheville Grown Business Alliance, Asheville Independent Restaurant Association and the Coalition of Asheville Neighborhoods are just a few examples.
I am confident that Asheville has the wherewithal to develop working models for filling service gaps without government mandates. Let's find out if the downtown business-improvement idea is indeed a good one by advocating voluntary solutions before rushing to impose mandatory ones — and risk driving out some of the very people who give our city its special character.
Libertarian activist, blogger and former City Council candidate Tim Peck has lived in the Asheville area for 10 years.
“If we wish to live in a free society, we must contribute to the existence of such a society by avoiding the use of force against our neighbors.”