By Duncan Wilson, administrator, Town of Friday Harbor
Special to the Journal
Let’s face it, nobody likes paying taxes.
However, as noted (at right, by A. Vanderbilt), they are the lifeblood of government. Acceptance of taxes appears tied to keeping them fair, keeping them low, and spending them on only the most important plans and projects.
The Town of Friday Harbor enjoys one of the lowest property tax rates of all cities and towns in the state of Washington. In addition, we have no local business and occupation tax and are one of the few municipalities in the state without a utility tax. How can we do it?
One answer is that we run a pretty tight ship, and the other is that Friday Harbor is blessed with robust sales tax revenue, a product of a healthy tourist/visitor economy. A significant portion of our general fund operations are paid with these revenues. Sales tax revenue has a silver lining as well: it is “O.P.M.”... or Other People’s Money.
While town residents do pay sales tax, a large portion of our sales-tax revenue is paid by people living in the county or from visitors off-island. This is only fair as Friday Harbor has to build and maintain the streets, parks and facilities that they all use while they are here.
Why are we talking about taxes? As the town administrator, I have been meeting with the mayor, council and Public Works Director Wayne Haefele, to discuss the horrible condition of many of our streets. All of you have your favorite street or avenue to despise—pot holes, cracks, bumps and erosion make some of them a nightmare.
Public Works has undertaken a study to determine how much money we need to bring our streets back into repair and to complete the construction of sidewalks to improve our walkability. The cost is estimated at over $10 million, and we are just finishing a complete survey that will give us a much more accurate figure.
This is a staggering sum for a town of our size. In order to address the obvious deficiencies, I am proposing to the council that we adopt a “Transportation Initiative”; a plan to fund our transportation needs and return our streets to an acceptable condition over the next 15 years.
Two more questions arise at this point: Why have our streets become so bad? and are we the only ones facing this problem?
Let’s start with the easy question... we are not alone. The Association of Washington Cities, an organization that represents all 281 municipalities in our state, has done several studies and found the deterioration of infrastructure within cities and towns to be at epidemic proportions.
In a recent publication, AWC went so far as to declare our state’s infrastructure to be “in crisis”. Seattle alone, for instance, has 480 miles of street with no sidewalks. In a companion piece entitled “DANGER: Rough Road Ahead”, AWC identified the problems of growing costs and shrinking revenues. Every city and town is falling behind.
The harder question to answer is why the roads became so bad in the first place. AWC identifies several reasons in its publications. These include: drastic transportation funding cuts from statewide initiatives ($1.2 billion); discontinuation of small-city paving program (impacting 157 cities and towns); a 40 percent decrease in per capita state gas tax distributions.
As revenue was lost following state initiatives, cities began to look for ways in which to balance their general fund budgets. Police and fire are a significant portion of all budgets, but citizens are not happy with any loss to these essential public services. The natural place to balance the budget was to defer maintenance and construction of transportation improvements and repairs.
The “Great Recession” further impacted revenues and compounded the problem. We are currently paying the price for these long-term maintenance deferrals, but we can reverse the trend and begin the long “road” to restore our infrastructure.
Our proposed first step in this new transportation initiative is to ask the town council to create a Transportation Benefit District (TBD). Once formed, the TBD can call for the vote of the citizens of the Town of Friday Harbor on whether to increase the sales tax by .2 of one percent (which would raise our in-town sales tax from 8.1 to 8.3 percent).
This new sales tax would result in approximately $220,000 of new revenue annually to the town and is exclusively dedicated, by law, to paying for transportation infrastructure; streets, sidewalks and trails. This sales tax will not be enough, by itself, to fund the entire transportation initiative but it is a great first step.
The benefit of a sales tax increase is that it is paid by everyone who purchases in town, including tourists and county residents. In this way, it removes a significant portion of the burden off the Friday Harbor resident taxpayer.
If you buy $5,000 worth of taxable goods in town each year, you will pay an additional $10 annually (no sales taxes on food, prescriptions or gasoline). However, with everyone paying the new sales tax the burden will be shared by all of those that take advantage of our transportation system.
In the Journal of the San Juan Islands editorial on Feb. 19, the paper asked for public discourse over the purpose of taxes and their justification. The town, as a governmental entity, is often painted with the broad brush of dissatisfaction reserved for the federal government.
We are, like most local jurisdictions, completely different. We must balance our budget, we cannot print money, and if we borrow we have to identify the revenues to pay it back.
The Town of Friday Harbor has been a good steward of the public’s money. We are seeking new revenues to repair the basic needs of the community.
It is time to remove the stigma that all taxes are bad. How you spend them dictates their worth.