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Want to Bankrupt Whatcom County?  Vote Yes on the Jail Tax.

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Key data:

Here are the numbers to help you make your decision on the county’s proposal to borrow $110 million to build a new jail:

Amount borrowed: $ 110,000,000

Annual Interest Cost: $ 4,950,000 (Based on 4.5% coupon)

Total interest cost over 30 year bond term: $ 148,500,000

Total Whatcom County Incarceration Expense:

1998 (actual): $ 4,996,850

2017 (budget): $ 14,501,238

Avg. Annual Whatcom County Incarceration Expense Increase, 2006 to 2016: 5.6%

Avg. Annual Whatcom County Sales Tax Revenue increase, 2006 - 2016: 2.02%

Projected Annual Incarceration Expense:
(including bond interest and jail expense inflation of 5.6%)

2028: $ 30,568,242

2038: $ 49,124,000

2048: $ 81,120,169

The graph at left shows the result of jail costs increasing by 5.6% per year funded by sales taxes that are only increasing by 2% per year – a massive funding gap which, by the time the bond is paid off in 2048, will be almost $60 million. The only way to cover this funding gap is to either further raise taxes or to cut other areas of county expenditures.


I’ve spent my 30-year career as a plant, division, and business unit controller. Evaluating capital projects was about 25% of my job. As a taxpayer in Whatcom County, I would like the county administration to be properly evaluated and held accountable. So as a public service, I’ve put together these projections of county jail expenses and sales tax revenues for the 30-year term of the debt the county administration is proposing we taxpaying citizens approve.

All the figures I’ve used are authoritative – see end notes for references and links. County jail expense figures are from the county’s website. They are actual audited figures up to 2015, and from 2016 to 2018 I used the county’s budget figures. I calculated the average annual increase in actual jail expense from 1998 to 2016 - that number is 5.6%, which is about twice the rate of inflation. I used that 5.6% rate of increase and projected from 2019 to 2048. Similarly, I calculated the average jail sales tax increase using actual figures for Whatcom County from the Washington Department of Revenue. From 2006 to date, the period the last jail sales tax has been in place, revenues have increased at 2.02% per year. I used this rate of increase to project sales tax revenue on the proposed jail tax from 2019 to 2048. Finally, I used crime figures from the FBI, and population data from the U.S. Census and the state Office of Financial Management. All my data and projections are available in tabular form on request. I’d be happy to review them with anyone who has an interest.

Since 1998, the county’s incarceration expense has increased at over twice the rate of inflation. It was just under $5 million in 1998, but the county budget projects it will be just under $15 million by 2018. Our incarceration costs will have tripled in twenty years. However, crime has decreased in absolute terms – from 2,261 incidents in 1998 to 1,192 incidents in 2015. After factoring in population increase, the crime rate, measured in incidents per thousand population, has gone from 14.1 in 1998 to 5.7 in 2015. That is a reduction of 60%! I am not an expert in criminal law or incarceration, but I do know numbers – and it seems to me that when crime is 40% of what it was twenty years ago, yet we are spending 300% more on incarceration, Houston, we have a problem. How is it possible that jail expenses are high and increasing at a time when crime is down? Further, it doesn’t appear the county has made any attempt to reduce costs - except by deferring maintenance on the existing jail - or explain why incarceration costs have increased so much relative to inflation. This jail tax proposal requires a detailed audit.

In the face of this fiscal and statistical paradox, instead of trying to reduce expenses to a reasonable level, the county proposes increasing our expenditures by locking us into a massive expansion of capital costs and the attendant facility and transportation charges. They have already signed a $7.1 million contract with an out-of-state consultant (DLR) to design a Cadillac jail. They have purchased land on LaBounty Rd. for $6.1 million, which appears to be about four times the assessed value.

To finance this new jail they propose a tax increase that will use 100% of the available taxing authority for Public Health and Safety – leaving precisely zero for fire, EMS, emergency preparedness, addiction counseling, or public health nurses – it will all go to building up the incarceration-industrial complex in our county – and even that won’t be enough to cover these grandiose spendthrift plans. The county plan suggests we spend as much on annual bond interest every year for the next 30 years as our entire cost of incarceration in 1998 - just under $5 million per year.

Extrapolating the numbers over the term of the proposed bond, using actual rates of jail expense inflation (5.6%) and actual sales tax revenue inflation (2.02%), reveals a horrifying outcome: County taxpayers will be on the hook for $15 million in 2018, ten years later, by 2028, that amount will have doubled to over $30 million, and by the time the bond is paid off, jail expenses will be running at over $80 million per year! This is the power of compound interest, a calculation our county’s administration does not appear to have any familiarity with or understanding of.

Rarely have I seen such an extreme case of fiscal irresponsibility as the current proposal for a new jail. If we allow the sheriff and executive and County Council to have their way, this project will bankrupt our county. It really is that bad.

The Remaining Hurdle:

Our county government needs to get voter approval for the tax increase. This is where you, the voter, come in. Please vote for fiscal sanity. Please vote NO.


Financial Data: Whatcom County Finance Dept.

Audited Annual Reports 1998-2015; Budgets for 2016 to 2018.

Link: http://www.co.whatcom.wa.us/Archive.aspx?AMID=37

Jail Proposal from Whatcom County New Jail Facility Use Agreement

Link: http://www.whatcomcounty.us/1966/New-Jail-Facility-Use-Agreement

Crime Statistics: FBI Uniform Crime Reporting Statistics

Link: http://www.ucrdatatool.gov/Search/Crime/Local/RunCrimeJurisbyJuris.cfm

Jail Planning and Contract Information: Whatcom County Executive “New Jail Information”

Link: http://wa-whatcomcounty.civicplus.com/446/New-Jail-Information

Sales Tax Revenues – Washington State Dept of Revenue

Link: https://fortress.wa.gov/dor/efile/statistics/localtax

Population Data: Washington OFM:

Link: http://www.ofm.wa.gov/localdata/what.asp

Prepared as a Public Service by David M. Camp, cpa WA Licence # 30879

Underlying data available in tabular form: email david@highwaterconsulting.net

This article is copyright by the author under Creative Commons Licence CC BY 3.0 – Share with attribution.

About David Camp

Writer • Member since Jul 12, 2009

David Camp is a cpa who toiled thirty years in the corporate salt mines, counting beans and telling stories to the auditors and whatnot. Now he spends his time growing [...]

Comments by Readers

Doug Karlberg

Sep 11, 2017

David, thank you for your excellant work. You have done the taxpayers an incredible favor.

You have experiance with this type of finacial analysis, so I have a question. Why did the County not due a similar analysis? (or maybe they did) Shouldn’t any 100 million dollar investment include this type of analysis to make a prudent investment?

Thanks again.


David Camp

Sep 11, 2017

Doug - thanks! Yes this type of analysis should be prepared (in much more detail than my 50,000 ft. overview) for every such capital project. I don’t know if it was prepared in this instance - but I think the problem here is more managerial and philosophical.  Bureaucracies can morph into self-justifying entities and continue merrily along if we let them. In private industry, the discipline is in maintaining profitability in the face of competition. IN government, fiefdoms can grow and metasticize as long as no one is holding their feet to the fire. This is what our Councillors are supposed to be doing, right? But our politicians are often pleasers who go along to get along and this is a problem.


Tip Johnson

Sep 12, 2017

Looks like they will need to fill it up fast with the most profitable prisoners. Oh wait! Then their operating expense go up?


Doug Karlberg

Sep 12, 2017

Thanks David. I think the CFO for the Couty shoud come on this site a provide us with a critique of your analysis. Are your facts correct, and your analysis using accepted methodology. If the County cannot do this, then we should vote no.

Without this sort of analysis, then this looks like either gross negligence, or the County is hiding the truth from us.


David Camp

Sep 13, 2017

Doug - I’d like to see the operating budget the County has prepared for this project. Not just the capital budget - this is the cost to build the jail, and this is available online. But I can;t find anywhere an operating budget which shows how the County proposes to operate their proposed new jail - what are the staffing levels, transportation costs, etc. over the term of the bond they want us to approve. Perhaps it exists! ENquiring minds want to know!

And this thing is a pig in a poke - yes the County is insulting us by pretending that the tax increase is for public safety and divvying it up among the local governments while downplaying the fiscal nightmare their proposed new white elephant of a jail is in reality. 

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