Better? Yes and Maybe -}
----
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...
In late 1996 several individuals concerned about the quality (or absence thereof) of growth in Thurston County began meeting at the Four Seasons Bookstore and onetime Carnegie Library to share their concerns and consider strategies to address the underlying conditions which were resulting in a lowering of the area's quality of life. Self-designated as the Carnegie Group, they submitted a three-page list of growth related questions to local governments in Thurston County. As their cover letter explained, the intent of the questions was to support policies and plans which enhance the quality of life of the region. Specifically, the cover letter requested governments, "to document both the negative and positive consequences of growth for our region before developing plans based on the notion that population growth is necessarily good or inevitable."
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
The Carnegie Group chose to focus not on the LOTT-induced population growth per se. Rather, it raised two related but previously neglected issues. First, the Carnegie Group raised the explosive question of who would pay the costs of LOTT expansion - current residents who are still paying for a recently completed LOTT expansion and upgrade, or the newcomers for whom LOTT would be expanded. The costs of the LOTT expansion have still not been pinned down but estimates range as high as $300 million.
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
The Carnegie Group emphasized the costs of growth for two reasons. First, a public seemingly indifferent to the decline in the area's environmental quality might be mobilized when it came to recognize how much it was paying for this growth. Second, considerable diversity of opinion exists within the Carnegie Group regarding both the question of what population is desirable and what tools should be used to achieve or maintain this population level.
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
Initially, the Carnegie Group was more successful in raising the issue of LOTT costs than in obtaining the detailed information it sought on the costs of growth. At public forums on LOTT, the issue of who would pay for LOTT became a major, even dominant issue. LOTT has responded by pledging to provide alternative financing schemes, at least one of which will place all growth-related costs of expansion on growth.
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.
Nancy Welton
Blockbuster Video says: "Here We Grow Again!"
About this time the Olympia Master Builders submitted a three-page letter attacking the need for any systematic study of the benefits and costs of growth, asserting that benefits clearly exceed costs and since the TRPC already had a full agenda, "a diversion of its resources to the cost/benefit analysis is neither warranted or feasible." The letter concluded that should the study proceed despite this advice, the Master Builders had a key role to play.
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 TRPC regional infrastructure report indicates that the capital facilities in the six-year budgets of municipal and county governments total $656.3 million dollars. This total is broken out by nine functional categories of spending, e.g., schools, parks, stormwater. For each such category, the total is allocated among the objectives of the expenditure: "catch up," "keep up," and "capacity." Of the total projected cost of $656.3 million, 43% is allocated to capacity, 25% to catch up and 32% to keep up.
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"
Both the TRPC report and the Carnegie review of it assume facilities identified in the comprehensive plans of local governments will be bought or built. In fact, construction or purchase of capital facilities is dependent on the availability of funding. To a significant but not clearly defined extent, funding for the projected capital costs will be determined by state policies and budgets, by elected local officials, and by the vote of citizens on bond issues. If residents are reluctant to subsidize continued growth through taxation, growth will slow to that which can be financed by the new population.
Onward - to Stability
Given the information contained in the report, what conclusions follow? First, the TRPC Board and its staff deserve recognition and praise for the Infrastructure Report. Collecting information on all costs and funding sources and then breaking these costs out by category and objective is a major achievement.
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 provide an improved quality of life in Thurston County? Yes. Ending subsidies for growth will allow current residents to pay less in taxes. Alternatively, the same tax revenues now subsidizing growth could be spent on meeting needs of current residents. Inevitably, requiring growth to pay for growth will slow growth and allow local governments an opportunity to focus on what citizens want, freed from the need to respond to the constant pressure of accommodating growth.
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.
Back to Home page.
