Comment by scoofy
6 hours ago
I said general obligation bonds, not general liabilities. These technically are what makes this discussion so difficult.
My point is that much of what the city can tax has little to do with the city's GDP. Either the landscape of the city will have to change or the current taxation paradigm will have to change.
What they can tax does have to do with the GDP though. If they have a 1B deficit, they need to somehow tax <0.1% of activity (or cut services), whether through property tax, income tax, sales tax, corporate tax, or some other scheme. What they don't need to do is radically increase density, and since almost all of the costs scale with population, not area, density wouldn't even help that much (or might hurt if it leads to a lower percentage of net contributors).
Again, putting $1B in some perspective, the LA Unified School District budget (which is county-level, so not directly comparable to the city, but anyway) is just under $19B. Maybe someone else can ballpark how much of that is associated to the city. Or look the other things that scale with population: police, medical, waste, social programs, etc.
Again, they have $1B in the current deficit. The have $1B in outstanding bonds. They have myriad other outstanding obligations that won't show up on the balance sheet for 20+ years.
Strong Towns wrote an entire piece on this: https://www.strongtowns.org/journal/2025-10-27-ground-zero-l...