Monday, September 6, 2010

Subsidizing Rural Development - A blatant case study

Lummi Island - Providing transportation between a rock and a hard place

People who live in our county's cities are starting to learn the lesson that they are often called upon to share an increasing portion of their tax dollars to support services for those who live in the more rural areas of the county. For years the County through planning and zoning decisions has encouraged lot creation in rural areas, which in turn has encouraged people to “drive till they qualify” since cheaper housing has been available the farther you are willing to drive. Places like Birch Bay, Peaceful Valley, Sandy Point Heights, Sudden Valley, and Lummi Island were all places where families could find an affordable first home, and where lower income folks could more likely afford the rent.

Now we have thousands of people living in these far-flung areas, and while their homes may have been cheaper, providing them with county services is way more expensive. On top of that many of these rural residents seem to believe that the sheriff, the fire department, and the ambulance should show up in the same amount of time as if they lived on Maple St in Bellingham, and they want their roads to be wide and smooth so they can drive fast to get to town where they for the most part work and shop. Ironically, many of these rural characters are some of the most outspoken against any hint of raising taxes to pay for services, instead preferring to continue to allow services for the majority of taxpayers who live in urban areas to decline so their taxes can be used to provide “essential” services to these rural dwellers.

There is no place quite as easy to see and evaluate this problem as Lummi Island, and the current quandary regarding the lease for docking facilities with the Lummi Nation has brought it front and center. Without getting into that lease quagmire, and the increased costs that will have to be put on someone, lets just take a look at how much Lummi Island is already being subsidized by others in the county.

I believe when most people pay taxes to the County they believe that some small “fair share” of that tax money goes to support each of the services that the county provides. While not everyone might agree on the need for all the services, the services at this point include law enforcement, courts, roads, elections, controlling disease, planning, parks, protection of natural resources, economic development, a variety of social services, etc. So for rural residents of Lummi Island how much of their county tax dollar supports these services?
• In round figures the 2010 assessed value of all property on Lummi Island is $270,079,836. This equates to 1.08% of the total countywide assessed value of $25,077,540,196.

• The 2010 assessment for the Road Fund is $1.3361 per $1000 of value, so people on Lummi Island will pay $360,854 into the Road Fund. This equates to 2.12% of the total Road Fund collected countywide.

• The 2010 assessment for the General Fund is $1.02054 per $1000 of value, so people on Lummi Island will pay $275,627 into the General Fund. This equates to 1.08 % of the total General Fund collected countywide.

• The 2009 Lummi Island Ferry operating expenditures were $2,545,688. According to current county policy 45% of ferry operating costs are supposed to come from county taxpayers, and 55% of the costs are supposed to come from collected fares. In 2009 the taxpayers share was $1,145,560, which equates to $509,079 more than all the General Fund and Road Fund taxes that will be collected on Lummi Island in 2010. In other words all property taxes collected on the Island for the General Fund and Road Fund fall over a half million dollars short of covering the cost of just the ferry, and provide no support for other county provided services such as law enforcement, courts, road repair, elections, health department, planning, parks, etc. Of course property taxes only account for about 50% of the General Fund and 75% of the Road Fund, but it is clear that sales tax and other revenue sources paid by people on Lummi Island do not come near paying for the ferry, let alone a per capita share of other county provided services.
Now before my friends on Lummi Island go to look for their pitchforks let me be clear that I am not suggesting that people on Lummi Island should pay 100% of the cost of the ferry. Just like I am not suggesting that the people who use Mosquito Lake Road pay the millions of dollars recently spent to replace the Middle Fork bridge, or that people in the Deming area pay 100% of the millions of dollars that have been spent to protect their area from flooding, or that people in Columbia Valley pay 100% of the hundreds of thousands of dollars being spent to build them a Resource Center, or that the handful of families that live on Rutsatz Road pay 100% of the tens of thousands of dollars that was recently spent to fix their road from river damage. The theory and promise of government is that if we each pay our small fair share, that money will go much further to provide desired services and protect us all from catastrophic losses (violent crime, spread of infectious disease, flooding, loss of our homes or income source, pollution of our drinking water, etc) then if we each had to try to provide those things for ourselves.

Under current county policy the people on Lummi Island are not supposed to pay 100% of the ferry service but only the 55% that gets collected as ferry fares, and then their small percentage of the 45% of the costs that come from taxes. I was not arguing that they are not paying enough, but only using the Lummi Island example to point out that development in rural areas, wherever it occurs, rarely pays for itself and has to be subsidized by those in urban areas. My main point is - before we start arguing about the fairness of such subsidies we should at least stop making it worse!

Unfortunately it appears that some on the County Council, perhaps a majority, while apparently ready to throw the folks on Lummi Island under the bus on these rising ferry costs are also still in favor of encouraging more lot development in rural areas which will just continue to increase the same type of subsidies in other parts of the County. While a logical, slow, predictable correction of these subsidies may be valuable over the long run, it makes no sense to pull the rug out from under these communities after encouraging this type of development for years. But I am not sure any such correction is the plan of the current Council, instead I think those in urban areas better hold onto their wallets, and those in places like Point Roberts, Acme, Kendall, Lummi Island, Deming and Lake Samish better watch your backs because it appears the County Council is just planning to continue the subsidies by allowing services to continue to erode for most taxpayers and robbing existing subsidies from some to appease others. Dumb growth returns to Whatcom County.

It should also be noted that the people of Lummi Island did recognize the problems of such dumb growth and through their comprehensive planning efforts asked that Lummi Island be down zoned to protect their quality of life and their finite water source from being depleted through excessive development and drilling of more exempt wells. Exempt wells in areas where water is already over allocated is another dumb growth subsidy, but that rant will have to wait for a future blog.

So as the cries escalate for making folks on Lummi Island pay their "fair share" watch to see whether the underlying cause of such rural subsidies is going to be addressed, or whether appeasing the selfish grumblers by throwing one area at a time under the bus is a more politically feasible solution than acknowledging and correcting our dumb growth history.