The logic behind the plan is that poor urban centers and towns are a cancer that spreads across a region. By pooling tax revenues, weaker cities and towns can reduce costs and fund needed improvements. Strengthening the poorer communities reduces sprawl and makes for a healthier regional economy. A stronger regional economy enables the area to better compete for and retain businesses. More businesses mean more jobs.
More jobs mean more tax revenues.
And more tax revenue means more money for police, schools and roads. In Minnesota, tax sharing has worked so well that the city of Minneapolis went from a receiver of funds to a giver. The diverse economy is home to more than a dozen Fortune 500 companies. The population is expected to increase from 2.4 million to 3.1 million by 2020. Despite strong opposition, the tax-sharing plan helped strengthen the entire region, said Myron Orfield, a Minnesota state legislator and nationally recognized urban scholar.