Plans Propose, Markets Dispose - Or, You Get What You Pay For
by Jerry Parker
Special to the Green Pages
A potential environmental bombshell published in September by the Thurston Regional Planning Council carries a subversively mundane title: Region Wide Infrastructure Report 1997-2002. This ostensibly tedious compilation of tables and charts reveals in painful detail the extent to which the population growth in Thurston County is paid for and, therefore, promoted not by developers and not by the new residents but, rather, by the rest of us. Current residents who are experiencing traffic congestion, loss of open space, school crowding, and other undesirable consequences of this growth are, at the same time, expected to subsidize the major portion of new capital facilities required by that growth. In summary, we will be getting what we are paying for and what we are paying for is growth. Big time.
A recent review of the TRPC report by members of the Carnegie Group suggests the subsidy for just the capital facilities to accommodate both recent growth and that projected for the next six years will total $358 million or almost $600 per year per taxpayer over the next six years. This estimate does NOT include the projected costs of LOTT, the regional wastewater facility which must be upgraded to accommodate projected growth, and does NOT include the cost of operating the schools, jails, and other labor-intensive capital facilities required by growth. When these additional growth subsidies are considered, the increase in annual taxes and fees to pay for growth will likely exceed $1,200 per taxpayer per year.
Before examining the details underlying these conclusions and asking what these conclusions mean for local governments, businesses, residents, and the environment, some background on the report is in order.
In The Beginning...
The planned expansion of the LOTT wastewater treatment capacity provided the impetus for the questionnaire sent out by the Carnegie Group. Group members shared a perspective that population growth, as currently managed in the County, was degrading rather than improving the quality of life. Without LOTT expansion, the population increases projected in the comprehensive plans of local governments would not be possible. LOTT, therefore, was (and remains) a key to growth and to the possibility of improved growth management in Thurston County.
Less Growth Means Lower Costs
Second, through its questions to local governments, the Group emphasized the additional and even larger costs to governments of accommodating the population which would be made possible by LOTT expansion. The questionnaire asked for information on the costs of schools, police, fire protection, parks, stormwater management, and other governmental services required by the LOTT-facilitated population growth. It also sought to document changes in the level of governmental services in the decade between 1986 and 1996 and to relate the capital costs to governments during this period to such changes.
Subsidy Unites Diversity
Some members of the group question all growth because of its impact on the environmental qualities they value and which they see threatened by ongoing sprawl, pollution, and resource use. Others of the Group focus instead on the environmental standards to which growth should conform. For example, if population growth can increase the per capita ratio of park acres to people, then it is viewed by these members as "better," not just "more." Still others within the group are less concerned about the physical environment than the issue of fairness. They seek to ensure that those who benefit by growth pay for growth and that growth not force current residents to flee the rising taxes and costs required by current subsidies for growth.
Despite these different perspectives, members of the Carnegie Group agree that large public subsidies to encourage growth do not make sense and have, therefore, focused on the extent and consequences of subsidies for population growth.
"Catch-up" and "Capacity" Prove Key
The Carnegie questionnaire on the costs of growth was forwarded by local governments to the Thurston Regional Planning Council, a logical and appropriate response. A TRPC staff report to the elected officials who constitute the TRPC Board acknowledged that the TRPC work program did not include a cost-of-growth study. It recommended that staff develop a scope of work and cost estimate for such a study. In February of this year, a written response from TRPC to the Carnegie Group indicated TRPC was beginning to examine the financing of "region-wide infrastructure" and would integrate cost/benefit information requested by the Carnegie Group into such work. At first, however, the Council planned to simply identify all capital-facility costs over the next six years required to implement comprehensive plans.
In response to the possible limitation of the study to the identification of total costs to meet capital facilities included in comprehensive plans, the Carnegie Group stated that to have any public value, the study had to identify what portion of the projected capital costs was required by higher standards in the comprehensive plans and what portion was required by local governments just to stay even with growth. The Council reversed its earlier position and agreed to assign capital costs to one of three categories: "catch-up," keep up" and "capacity." "Catch-up" is the cost of achieving standards set in the plans. "Keep up" covers all the maintenance costs for capital facilities. "Capacity" is the cost of building new facilities required by growth. Without this key decision to break costs into one of these three categories, the entire infrastructure report would have been a depressing documentation of a seemingly unending demand for more, more, more.
Details - Briefly
The Carnegie Group analysis assumes that both capacity and catch-up costs reflect costs of growth. While some catch-up costs reflect costs of higher standards for public services, the local plans reveal that in some significant spending areas, levels of service will decline. The Carnegie review assumes these declines to at least balance any increase in levels of service. Consequently, the Carnegie review considers all catch-up costs to be the result of recent growth. When these costs are added to capacity costs, the cost of growth to be paid over the next six years totals $449 million. The Carnegie review then deducts from this total all payments which will not be paid by taxpayers, e.g., impact fees. These total $91 million or about 20% of the costs of growth. The cost to taxpayers, $358 million, is then divided by the estimated 100,000 taxpayers in the county to determine an average cost per taxpayer for each of the next six years. This annual average cost comes to $596.
The Carnegie analysis acknowledges that actual payment will be extended over more than six years and that the projected population increase will reduce the cost per taxpayer. However, the longer payment period will not change the total taxpayer burden. Moreover, so long as population growth continues, any decline in costs per taxpayer resulting from the increased number of taxpayers will be more than off-set by the continual need for still more infrastructure and taxes to pay for it.
Just Say "NO"
Onward - to Stability
Second, this work needs to be continued. It would be useful to determine more precisely what portion of catch-up costs results from higher standards and what portion is required as a result of recent growth. The report needs to be expanded to include projected operating costs, not just capital costs. Finally, TRPC needs to translate this cost information into tax burdens, based on the manner in which capital-improvement plans will be financed and on projected increases in tax revenues from population growth.
Third, local governments need to prepare their own interpretations of the cost information to determine the costs of growth within the separate jurisdictions. They then need to consider what, if any, subsidies for growth are justified and eliminate the rest.
Fourth, the costs over the next six years must be related to anticipated costs of growth over the foreseeable future. Will comparable expenditure be required every six years just for facilities and services to stay even with growth? If so, how will local tax burdens increase in the future?
Fifth, local governments need to consider how policies to shift all or most costs of growth onto growth will affect growth rates and, therefore, future capital and operating costs. Population projections based on fairness in financing rather than the mindless trend projection of the state will help us achieve a desired rather than an inevitable future.
Better? Yes and Maybe
Will this wish list resolve all land- use, environmental, and related social issues of local governments? Obviously not. In theory, by making new development contingent on environmental enhancement, growth could result in true development, that is, an improved quality of life. However, at some point, this approach generates a major social question: If all costs of growth were to be paid by growth, would Thurston County eventually become an elite enclave like Boulder or Telluride, Colorado? Somewhere down the road, responsible residents will need to consider policies to assure that opposition to formless growth, malls, and sprawl does not shut the door on the excitement and dynamism of economic and social diversity. Better, however, that the region get a handle on growth now so that when this fight is fought, we will still have an environment worth fighting over.
Jerry Parker is a Pollution Prevention Specialist with the Washington State Department of Ecology and an active member of the Carnegie Group.
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