Walter Johnson has an interesting article about Ferguson, Missouri, over at The Atlantic. In it, he explains why—despite the fact that the city hosts a multinational Fortune 500 company—it “relied on municipal fees and fines to extract revenue from its poorest residents.”
Johnson begins his piece by taking readers down West Florissant Avenue in Ferguson.
Head south of the burned-out Quik Trip and the famous McDonalds, south of the intersection with Chambers, south almost to the city limit, to the corner of Ferguson Avenue and West Florissant. There, last August, Emerson Electric announced third-quarter sales of $6.3 billion. Just over half a mile to the northeast, four days later, Officer Darren Wilson killed Michael Brown. The 12 shots fired by Officer Wilson were probably audible in the company lunchroom.
Outwardly, at least, the City of Ferguson would appear to occupy an enviable position. It is home to a Fortune 500 firm. It has successfully revitalized a commercial corridor through its downtown. It hosts an office park filled with corporate tenants. Its coffers should be overflowing with tax dollars.
Instead, the cash-starved municipality relies on its cops and its courts to extract millions in fines and fees from its poorest residents, issuing thousands of citations each year. Those tickets plug a financial hole created by the ways in which the city, the county, and the state have chosen to apportion the costs of public services. A century or more of public-policy choices protect the wallets of largely white business and property owners and pass the bills along to disproportionately black renters and local residents. It’s easy to see the drama of a fatal police shooting, but harder to understand the complexities of municipal finances that created many thousands of hostile encounters, one of which turned fatal.
Johnson said that the “familiar convention of the true-crime story turns out to be utterly inadequate for describing the social, economic, and legal subjection of black people in Ferguson, or anywhere in America.” He added, “Understanding this requires looking beyond the 90-second drama to the 90 years of entrenched white supremacy and black disadvantage that preceded it.”
In his article, Johnson talked about the findings of the Ferguson investigation conducted by the Justice Department. He said that the DOJ had traced the problems in Ferguson “to a lack of training, supervision, and oversight, exacerbated by shoddy record-keeping and clear racial bias.” Johnson noted, however, that there was one question the report didn’t address: “How can all this be happening in a community that is home to a Fortune 500 company? Why is the city government filling out its budget with municipal court fines when Emerson Electric is doing $24 billion a year in business out of its headquarters on West Florissant Avenue?”
According to Johnson, the city of Ferguson “is extraordinarily constrained in its ability to pay for the services that its residents require” because municipal tax revenue is limited by the Missouri constitution. He explained: “In 1980, Representative Mel Hancock—the founder of a group called the Taxpayer Survival Association—wrote an amendment that required any increase of local taxes, licenses, or fees to be approved by a citywide referendum, with very few exceptions. Along with gun-license fees, which are explicitly exempted from the provisions of the ‘Hancock Amendment,’ municipal fines provide Missouri cities with one of the few sources of revenue they can expand without a referendum.”
In his article Ferguson’s Fortune 500 Company, Johnson goes into detail about the city’s history of segregation, restrictive zoning, urban renewal (“black removal with white approval”), Enhanced Enterprise Zones, tax increment financing (TIF), municipal bonds, regressive taxes, government spending, corporate philanthropy, and the connections between race and real estate.
The story of Emerson Electric’s disappearing data center and the financial malfeasance of the Ferguson city government shows how tools of governance that were intended to harness the power of the market to advance racial equality have often had the opposite effect. In Ferguson, TIF bonds are serviced by regressive taxes and fines levied on black motorists. In Ferguson, commercial real-estate taxes are so low that a Fortune 500 company foregoes tax abatements in the name of fairness, while the city taxes the consumption of ordinary consumers to fill its coffers and those who cannot afford to pay their fines go to jail. In Ferguson, economic development has been collateralized by the citizenry.
Click on the link to read Ferguson’s Fortune 500 Company: Why the Missouri city—despite hosting a multinational corporation—relied on municipal fees and fines to extract revenue from its poorest residents.