Antediluvia

Tuesday, March 31, 2009

ANTEDILUVIA: Last May, before the bubbles burst and the economy crashed, Whatcom County Council members were handed a long, colorful document, a list of priorities for water resource protection—not just for Lake Whatcom, but for all the county’s bays, streams and shores. The 278 projects were ranked by relative importance and efficacy; and without them, council learned, water resources will continue to decline. Yet, for the most part, they’re each one stalled due to lack of funding.

County Executive Pete Kremen asked for guidance on establishing which of these 278 projects should receive funding, but by late September—with markets crashing and municipal budgets bombing—few looked to be moving forward in the next biennium.

In November, while most eyes were fixed on the Executive’s salary debacle, a council majority led by the capable Carl Weimer found the money to move some of these projects forward by strengthening the authority of the county’s Flood Control District Board of Supervisors. Freshly empowered, those supervisors proposed a property tax increase of $0.04 per $100,000 assessed value—about $1 per month for an average home—that would generate more than $940,000 per year for water projects, with about a third targeting Lake Whatcom.

Troublingly to a county that has not seen a property tax increase in 16 years, the flood levy represents a 31 percent increase over previous years. County Assessor Keith Willnauer, commenting on the proposal, called the deluge the largest single property tax increase in the county in two decades.

“The best property tax policy,” Willnauer advised, “is accomplished by providing articulate spending definitions… adequate administrative review, and maximum public involvement by voters.”

At least some of that is achieved through the flood tax increase, which seeks to fund catalogued projects Pete Kremen couldn’t quite bring himself to include in his phlegmatic budget. Other slopes are more slippery, including the fact that the flood district board of supervisors is, in a more flamboyant masked-and-caped costume, the Whatcom County Council!

The increase attempted a clever end-run around a tax-averse administration while providing council with a little shielding. Backlash was soon to arrive.

Brett Bonner—former KGMI-790 radio personality and COB mayoral candidate—is circulating a petition to restrict such cleverness in the future. Bonner’s proposed ordinance, framed as an initiative to county government, would demand “that total annual real estate property tax increases, including the use of banked capacity, shall be limited to 1 percent per year unless approved by a majority vote of the people.”

How very Tim Eyman of him.

“Whatcom County Council has increased taxes twice in the last 12 months,” Bonner explains, “one a sales tax increase [for mental health services] that is costing people over $3 million more a year, and another that increased the flood tax by over 30 percent. In both cases, the public was not given the opportunity to vote even though several council members and the County Executive had urged a public vote, even in an advisory capacity.

“This measure is not anti-tax,” explains Bonner, who in 2006 served on a citizen’s committee to study City of Bellingham finances. “It is pro-public input. Most people recognize that government serves a legitimate function, and that public services cost money. I have heard many folks say that they wouldn’t necessarily mind paying more for certain things, but they want the government to explain it and lay out the case. Then, people want the ability to vote on issues that impact their pocketbooks. This is what has been done in the past with the EMS levy, WTA support, and money to improve the jail (to name a few).”

Yet, as much as the Gristle admires public initiatives and the irrepressible populism that underlies them, there are thorny problems with Bonner’s proposal.

Governments are already limited to property tax increases of no more than 1 percent per year. And Whatcom County has avoided raising property taxes by even that amount.

“Banked capacity” refers to a provision established by the state Legislature in 1986 that allows local governments to choose not to collect property taxes without forfeiting the option to collect them later, if necessary. Revenues to which governments are lawfully entitled but do not take are “banked.” In practice, the option to “leave the money on the table” is a great tool of fiscal restraint and encourages behavior most voters seek from their governments: if banked capacity exists at all, it is because the original, lawful taxing authority was not used.

Consider the alternative laid out in Bonner’s initiative, where the county risks losing access to rainy day bank accounts, driving cautious officials to approve maximal tax increases they do not need but to which they’re entitled. “Use it,” they’ll understand, “or lose it.”

There’s another tool of fiscal restraint that deserves mention, and Willnauer knows it well: Properties are routinely assessed below their actual value, which is a great gift back to property owners.

Taken in tandem, county government is not only refusing revenues to which it is entitled, it is not even making that calculation at the full value of the property. These points at least deserve mention in any reasonable complaint about the relative “unfairness” of revenue collection in Whatcom County.