Measuring the tax benefits of the fiscalization of land use: a case study of commercial vehicle services in the South Avenue Travel Center, Corning, CA

When California voters passed Proposition 13 in 1978, it limited property taxes to 1% of assessed value and greatly diminished local government’s ability to generate discretionary revenue. Local governments needed a source of revenue to pay for government services demanded by residents. The Bradley-Burns sales tax which returns 1% of taxable to sales to the point of sale is the mechanism utilized by local governments to make up for the lost revenue. Businesses that generate a high volume of retail sales or sell big ticket items such as automobiles are seen as advantageous to local governments since more tax revenue is generated by the business than expended on local services provided to the businesses. The City of Corning lacks the population base to attract big-box stores so an alternative strategy was used. In 1979, Corning annexed land along Interstate 5 at the South Avenue Interchange that contained a single truck stop. Due to the City’s control over land use policies three truck stops and additional commercial vehicle services were built to form the South Avenue Travel Center. This study examines the sales and property taxes generated by the South Avenue Travel Center to determine if the City’s strategy has paid off or if commercial vehicle services require more investment in transportation infrastructure alone than tax revenue produced.