The thousand acre dilemma: Part 1.6 – How the temporary Greenways Levy became a permanent tax
If you pay taxes in Bellingham, prepare to be screwed… again. The city’s Parks Department and Planning Commission have recommended a new Park Plan that will require raising taxes by at le
If you pay taxes in Bellingham, prepare to be screwed… again. The city’s Parks Department and Planning Commission have recommended a new Park Plan that will require raising taxes by at le
Here’s some background:
In 1990, the city adopted its original Greenways Levy, a $7 million tax on existing property owners to expand the city’s park system to accommodate growth.
In 1997, the city adopted the Beyond Greenways Levy, a $20 million tax on existing property owners to expand the city’s park system to accommodate growth.
In March 2006, the city adopted the Greenways III Levy, a $44 million tax on existing property owners to expand the city’s park system to accommodate growth.
Do you see where this is headed?
Each of these Greenways ordinances contains a comparable Whereas clause that states, “…it is necessary that the City institute a levy and use the proceeds of a temporary increase of the regular tax rate” to fund an expansion of the city’s park system.
Let’s see, over the last 18 years, the city has adopted three temporary property tax increases totaling $71 million, the last of which is set to expire in 2016. Not!!
In fact, the 2008 Bellingham Park Plan that Council will be asked to adopt requires taxpayers to approve a fourth property tax increase beginning in 2017. If the Greenways IV tax levy is not implemented, the plan will be short $29 million. But that’s not all. The plan entirely ignores the impacts of inflation. If the costs of acquiring land and park facilities increase by just 1% more per year than tax revenues (a virtual certainty), the budget shortfall grows to $41 million.
So much for a temporary property tax increase!
How did we get ourselves in this mess?
The short answer: The city has utterly failed to adequately plan for the long-term financial implications of growth. Several statements in the 2006 Greenways III Levy ordinance shed some light:
“WHEREAS, Bellingham continues to grow at a rapid rate…”
“The general fund of the City of Bellingham does not have sufficient resources to provide for the acquisition of additional greenways, open space, parks, and trails…”
“The City Council finds and declares that an emergency exists…”
Based on these statements, it is clear that city officials understood – more than two years ago - that funds were not sufficient to expand the city’s park system to accommodate growth, and that an emergency existed that required taxpayers to temporarily increase their property taxes to pay for these costs. Presumably, the same exact emergency existed in 1990 and in 1997 as well, and will occur again in 2016!
I’m sorry, but only the most incompetent planner in the world could fail to sufficiently address the same emergency after 18 years, know that it will occur again in 8 years, and do nothing to prevent it. Either that or it’s a case of the most deceptive planner taking advantage of the most gullible group of taxpayers.
Let’s see if we can figure this out together:
1. The city is planning to grow.
2. The city will need to expand its park system to accommodate this growth.
3. The city will need to raise funds to pay for this expansion.
4. The city has two primary methods of raising these funds. It can:
a. Charge adequate impact fees on those who create the need to expand the park system; or
b. Increase property taxes on existing taxpayers who already have an adequate park system, which would not need expansion except to accommodate growth.
Based on the plan proposed by the Parks Department and recommended by the Planning Commission, it’s clear how the city plans to raise these funds.
Are you prepared to be screwed… again?
(For more info on the 2008 Bellingham Park Plan update, see The thousand acre dilemma Parts 1 and 1.5. under the Related Links section below.)
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Comments by Readers
g.h. kirsch
Oct 03, 2008Mr. Horowitz should be commended for continuing to direct our attention to the implications of growth planning goals for taxpayers. Parks are his particular interest, and the Greenways levies his immediate focus.
I would like to generalize the situation a bit more. Our development community wants us to believe that growth is inevitable. At this very moment they are doing their best, or worst, to influence planners and electeds countywide to choose a new growth projection which will then be the rationalization for yet more expansion of our cities and small towns, and more windfalls for speculators.
If we accept this uncritically we must be prepared to accept the associated tax burdens that will arise from innumerable demands for government services, not just parks. Growth may be able to pay its own way, but to date, the development industry has managed to make themselves profitable by saddling us with its costs.
At the state level that lobby is able to influence growth projections that are then allocated to counties, and subsequently from counties to cities and towns. This then becomes the premise for their argument that growth is inevitable and we must, by law, accommodate it.
May I suggest this argument is flawed. GMA has other requirements. When accepting growth, levels of service must continue to be met. And when growth is taking place, the associated services must be provided concurrently.
When existing taxpayers are unable or unwilling to accept these increasing tax burdens, will not elect those who would increase taxes, or out and out revolt, as they did in California, and by initiative stop this taxation, where will the money come from to subsidize growth?
Whatcom County, after operating in the red for several budget cycles and drawing down its reserves, facing a substantial shortfall before the recent economic downturn, is going to be reeling in the coming budget cycle.
Pete Kremen is out of smoke and the image in the mirrors is the unattractive naked truth: he has for years been subsidizing development at the expense of environmental programs, by misdirecting monies intended for other purposes, and burning through our reserves.
The time has come for taxpayers in Bellingham and Whatcom County to revolt against this process and support those who are struggling to stop another cycle of growth and its subsidization.
Larry Horowitz
Oct 04, 2008Personally, when I read an article or a letter in which the author complains about their government, I always wonder whether he or she even tried to do something about it before complaining. In case you?re curious, before writing this article, I attended 4 Planning Commission meetings on the Park Plan over a 4-month period, and I submitted 5 detailed comment letters to the Planning Commission and City Council. Of the 43 comments tracked by staff on the Park Plan Comment Tracker, I am responsible for 17 of them, or 40%.
I didn?t disclose this information in the article because I don?t want to discourage others from participating in the public process. Unfortunately, my personal experience is that the public process is broken, especially at the Planning Commission level.
If you think about it, why would a planning commissioner who also builds homes agree to increase the park impact fee that he?ll have to pay on the next home he builds? Why would a planning commissioner who is an architect and makes a living in the building industry agree to increase impact fees? Why would a planning commissioner who is also a developer agree to do so? And so on.
When a majority of planning commissioners profit from growth, is it reasonable to expect them to make decisions that might adversely impact their profits?
Is it reasonable to expect citizens to participate in a public process that is clearly broken?
Is it time to change the makeup of the Planning Commission?
Another item I didn?t mention in the article is the lack of disclosure regarding the need to raise taxes. In fact, one of the planning commissioners (who also participated in the Park Plan Steering Committee meetings) did not even realize that the plan being proposed by the Parks Dept - and being recommended by the Planning Commission - requires another tax levy to cover expenses. Just before the final vote, this planning commissioner commented that the recommended plan does NOT require another Greenway Levy. Thankfully staff corrected the PC member and confirmed that ? in fact ? the plan does include another tax increase.
It?s hard to blame the planning commissioner because staff hid this fact by lumping the new tax with the old one. At the same time, my comment letters made it pretty clear that the recommended plan requires a tax increase. Just another example of a broken system.
Is it time to fix the system?
Mayor Pike and City Council: are you paying attention?
Jack Weiss
Oct 07, 2008Larry,
It is important to other readers that at least you are more accurate with the facts.
Fact: All levies are “temporary.” That is State law. Our community has supported these three levies with successive “yes” votes of 71.8%, 58.4%, and 58.8%. This additional tax is by the will of the voters of our community. Nobody is “screwing” anybody, unless you were part of the minority and feel that living by the results of democracy is somehow against your personal interests.
Fact: Levy amounts through the years have reflected real estate market prices and voter desires. Yes, they have gone up, but not as much as what was proposed in a competing effort that you worked on. Larry, I have a spread sheet table you sent me in 2005 proposing a $88 million levy over 20 years with a 2% escalator. Your group finally settled on $60 million. To criticize a $44 million voter-approved measure rings hollow. You should, instead, be complementing the City for financial restraint in not going after yet another $16 million.
Fact: To the point of ?The general fund of the City of Bellingham does not have sufficient resources to provide for the acquisition of additional greenways, open space, parks, and trails?? - no the City does not. What you fail to mention is that because of Tim Eyman initiatives, the City’s general fund is severely limited to provide additional City services. Again, the Bellingham voter’s “chose” to increase the tax rate in response to these statewide voter restrictions. Our voters want and have prioritized these services and are willing to tax themselves to get them knowing the constraints of the general fund.
Fact: This ordinance was adopted by the then City Council on a 7-0 vote and, yes, it was declared as an emergency. The inside baseball of that is because the deadline of the May 2006 election was bucking up against all of the pre-levy bickering of two proponent groups and a divided Council. Yet, there was a Council agreement that it was too important to wait for a future election. To label it an emergency, gave the entire Council the opportunity to have one vote on one night instead of the normal two votes on two meeting nights. This allowed for it to meet the deadline set by the Auditor. While this procedure is not used very often, all parties of influence agreed this was the best approach at the time.
Fact: Plans are roadmaps, not contracts. It is presumptuous to think that projections 15-20 years out will be spot-on. Larry, back in 1988, did you know what your personal income and asset levels would be in 2008? Plans are best guess estimates and because of required updates at regular intervals, these estimates can be refined. Plans give general direction and intent such as what is currently being discussed with revised County growth projection numbers. Some (including me) will call for a different intent even though planned growth numbers have corresponded fairly well with actuals so far. I digress.
If you are so concerned about a fourth levy as a source to deal with a funding gap, you should be really concerned about the current lack of construction and real estate activity on the revenues for parks. Real estate excise taxes (REET) and park impact fees (PIF) have tanked in the last two years and there is little optimism these levels will return anytime soon. For the community, it means delays in implementation and more creative ways to search for revenue opportunities. That is what we have - how much meat can you pick off a bone? As these numbers are known over the next few years, adjustments will have to be made in the next plan update.
As a side note which you are aware of, I have been a strong advocate of raising PIF to a more appropriate level.
As another side note, I have not seen the most recent drafts of the parks plan. My last version was a number of months ago when it last came to Council and financials were still being worked on. My comments to you are more general in nature and not wanting to pick apart details in a plan I have not seen.
John Watts
Oct 07, 2008I strongly agree with all the points that Jack Weiss has made!
As a member of the City Council during the time the Comp Plan was updated and the Parks Plan incorporated into it as an additional element, I can also appreciate that such matters ought to always be considered as works in progress. They are planning tools developed because of State requirements, which are always subject to periodic revision and updating to fit evolving conditions.
This lack of solidity does tend to make some folks uneasy, including me in certain matters. But, this is the system we have and it has -and does- work pretty well.
I was also directly involved in the last Greenways levy debates, which narrowly escaped being held hostage to the desires of some individuals who acted much more concerned about their personal wants than the overall best interests of our community.
Mr Horowitz was insistently, and persistently, among that group in my recollection, and he still acts as if he continues to resent not getting his way in forcing the City to acquire the entire Chuckanut Ridge property. Because of that demonstrated attitude, I would not be surprised if Chuckanut Ridge were not the [not very secret] central argument in most of his latest published rants.
If this is true, it would certainly explain his continued animus toward ‘the City’ on issues related to all manner of growth, parks, funding, taxes, public trust and related issues. Maybe this is overstating what seems obvious to me, but I don’t think so.
Regarding Mr Horowitz’ remarks about the Planning Commission, he needs to be reminded they are also appointed volunteers selected from multiple facets of our community who spend countless hours studying and considering important issues that most people can’t find the time to fathom. The PC’s recommendations to the Council are also advisory in nature, although often they are highly valued for the real public input and careful thought they embody. Of course, the PC’s activities are also facilitated by the City’s professional Planning Dept, which is charged with following both the law and City policy.
It’s easy to sit back and criticize others for almost any reason. What’s hard is to spend the time to learn what is important to the entire community and then try to translate that into fair, consistent and prudent action that will benefit everyone - well into the future.
The system we have is certainly not perfect, but it does work pretty well. And, it has been working for much longer than I started thinking of living here - about 20 years ago.
I’d like to suggest that maybe, a less angry and more reasonable and honest approach might be a more effective tactic for Mr Horowitz, if he really wants elected officials to mold City policy differently. Otherwise, there does remain a significant demonstrated appetite for dissension to satisfy in our City of Not-so Subdued Excitement.
Larry Horowitz
Oct 07, 2008Jack,
Thanks for your comments. Clearly you have missed the intent of my article. Apparently I should have been more clear. When you actually review the most recent draft of the Park Plan, as I have, you will find the following facts:
Fact: The proposed plan, known as the ?Base Plan Option?, anticipates $150.7 million in revenues and $150.3 million in expenditures. These amounts are reflected in 2008 dollars. In other words, the impacts of inflation are ignored.
Fact: Of the $150.7 million in revenues, $56.4 million is generated by a 43% park impact fee (PIF). This amount assumes that all remaining projected growth between now and 2022 will occur in areas that are subject to the PIF and that none will occur in the PIF-exempt UGA. In the past five years, 19% of total growth has occurred in Bellingham?s UGA. Clearly the city?s assumption that no growth will occur in the pre-annexed UGA is erroneous and overstates revenue by as much as 19% or $10.7 million. Assuming that only 10% of the remaining projected growth occurs in the pre-annexed UGA, PIF revenue is overstated by $5.6 million.
Fact: Of the $150.7 million in revenues, $56.0 million is generated from the Beyond Greenways, Greenways III, and a yet unapproved Greenways IV levy. Although staff has not shown their work and separately identified the Greenways IV levy, it appears that amount is approximately $25 million between 2017 and 2022.
Fact: If the city raised the impact fee to 71%, then a Greenways IV levy would not be necessary. In other words, if the city acted in the best interests of its current citizens, then those who create the need to expand the park system would be asked to pay for it, and existing citizens would not be required to tax themselves again the maintain the Park level of service they currently enjoy.
Fact: By relying on another Greenways levy in the proposed Park Plan, the city no longer considers these levies ?temporary?. Tax increases (i.e., Greenways levies) have become a ?permanent component? of the financing plan to expand the city?s park system in order to accommodate growth.
Fact: I am not criticizing the Greenway III levy; however, I am criticizing staff and elected officials for not raising impact fees to an adequate level so that another tax increase is not needed. The Planning Commission recommended a 45% PIF in 2006. It is now 2008 and we still have a 35% PIF. In order to eliminate an unjustified growth subsidy, the PIF needs to be at least 71%.
Fact: I agree projections are roadmaps. The city?s roadmap requires taxpayers to approve another tax increase in order for these projections to hold up. The city could easily develop a roadmap whereby another tax increase is avoided by simply raising impact fees to 71%. Even at that rate, taxpayers are still subsidizing developers by 29%. While growth creates roughly 100% of the cost, it is currently only paying 35 cents on the dollar. Even at 71%, it will only be paying 71 cents on the dollar, a 29% discount. I don?t recall getting a 29% discount on my taxes. Perhaps if the city offered me a 29% discount on taxes, I wouldn?t feel the need to write these articles.
Fact: Regarding the Park Plan, the lack of construction is self-correcting. In a hypothetical no growth scenario, the existing park system would not need to be expanded to accommodate growth. Revenues and expenses would still match. So no, I am not concerned about the reduction in REET and PIF revenues. If we don?t need to spend money expanding the park system, we shouldn?t.
Larry Horowitz
Oct 07, 2008To John Watts,
There is simply no sense responding to your ridiculous comments and personal attacks.
In the future stick to the facts. Your opinions are tiresome and way off base.
Michael Lilliquist
Oct 08, 2008John,
I respect your experience and what you have to say, but I also believe you were unfair when you wrote:
“It?s easy to sit back and criticize others for almost any reason.”
Larry has hardly been taking the easy road of pot-shots. He’s been poring over documents and generating his own analyses. You may think he’s wrong, but I think you will at least grant that he’s not just “sitting back.”
To Jack,
You are of course correct that plans are more like road maps than they are like contracts, but they are also more than a bit like promises. They are promises that we can re-examine, as you say, and we can choose a new covenant to better suit changed conditions or new public priorities. But for the time being, and for outsider citizens, it’s about all we have to hang our hat on. We take them seriously, as I’m sure you do. Let’s not forget this “promise” aspect.