Is there a sweet spot of growth?

Bigger business means more customers, more revenues, more profit, more success, which leads to more customers or users and the cycle repeats. The same is usually said of cities and towns or any other organization, too.

I’ve always questioned that.

In the last two weeks there have been stories about Carmel, Fishers, and now Greenwood, Indiana, all considering levying a new tax through restaurants. The political debate around taxation aside, the purpose of the tax is clear: these cities need money to support their advancing cities and its infrastructure. All of these cities have grown rapidly and now they need money to support a variety of things – expanding infrastructure in under-developed areas and maintaing infrastructure in over-developed areas to name two.

During boom times these cities all attracted massive population growth. Fishers had some 600 people living in it back in the 70’s and now it’s at about 78,000 people. The reason was cheap taxes that bred cheap land and cheap housing where folks could spread out. Businesses followed the people and led to a great, affordable, place to live (I even used to live in Fishers and enjoyed it there). Thanks to the expanding tax base services were good, schools were great, and the money was available.

Now, not so much. These places are still flush with cash, but it’s almost as if there’s a sweet spot between being “too small to support anything” and “too large to support everything”. For a place like Greenwood, with a population of about 50,000 people, they’re trying to balance needs and desires, and trying to make sure they grow smart and making sure the city scales up with demand in a way that makes sense 20 years from now.

In May 2012, voters rejected a $30 million referendum that would have built a new Johnson County Public Library in Franklin. The measure failed by a 3-to-1 margin.

Greenwood plans to use the restaurant tax revenue on parks and public safety. Mayor Mark Myers said the city needs the money and has few options on how to raise it.

The parks budget has been slashed by $1 million since 2009; the city’s police department has the same number of officers now as 20 years ago, Myers said.

“We want to be a conservative town,” Myers said, “but at some point in time we have to do something to be able to afford those amenities that our people want.”

Their citizens are clear: we think we can have good things, but for a low price.

As a business, I don’t want to be too small to support anything, and I don’t want to be so large we have to constantly raise prices to support everything. If you asked me what my biggest concern would be now that I’ve got a team of people working together, it’s being able to ensure everyone can live comfortably.

But I’m obsessed with figuring out ways to make good design, something that either costs $200 from your neighbor’s 10-year-old nephew, or $20,000 from a big studio, into something accessible for everyone. Not because it’s easy to do  (it isn’t), but because it’s right and it makes the Internet a better place. People want nice things, and they want it for a really good price. There’s no room for fluff in government or business.

For my part, I’ve never wanted to live lavishly, just comfortably. But being able to scale up with clients and maintaing everyday low prices that the rest of us can afford is going to take some skill and hard decisions. Clearly it is, too, for cities and towns around us here in Indianapolis (which has the highest tax rate of the Indy metro area).

If there is a sweet spot of growth and affordability, I want to be right on it. And be nimble enough to stay there.

About the author

Justin Harter

Add Comment