OPINIONPort Orchard

Paying for public improvements intended to encourage economic development would be easy if local government had money to spare, but this is rarely the case.

Sen. Derek Kilmer has sponsored Senate Bill 5705 and Senate Joint Resolution 8213 to authorize what is known as tax increment financing to pay for such public improvements.

SB-5705 would allow levying special property taxes in addition to those already authorized by law to pay for public improvements made in a taxing district created to levy these taxes.

SJR-8213 would amend the state constitution to authorize these addi-tional taxes and to allow use of existing regular levies to pay for the improve-ments.

In essence, the two together provide for additional property tax revenue and the use of revenue from existing lev-ies — including the state levy that now must be used solely for the support of our public K-12 schools.

The special property taxes would apply in the area that would receive a special benefit from the public improve-ments — to be called an apportion-ment district.

At least two projects in South Kitsap might use this new authority, if both the bill and the constitutional amend-ment become law.

Port Orchard wants to build a com-plex including a new library, commu-nity center and parking garage in the older part of the city, which would cost quite a bit.

Whether done by Port Orchard after annexing the area or by the county and city together before annexation, the Bethel Corridor project might be done using this new tax increment financ-

ing.Neither proj-

ect could prob-ably be done without new revenue, wheth-er it comes from existing meth-ods of imposing taxes and special

assessments on property benefited by the improvements or from some new method.

Perhaps tax increment financing, which uses new property taxes and possibly existing property tax sources, could be a practical way to put together a financing package.

For people who wonder how this would affect their own tax bills, the devil is in the details, as usual.

If your property is included in the newly created taxing district that levies the special property taxes, then you would see the new tax on your bill.

Taxpayers could not know until after the constitutional amendment and the bill become law and a new taxing dis-trict is proposed whether they are in it or not.

But once a taxing district is pro-posed, people could voice their con-cerns at a public hearing before its creation.

And once it is created by the juris-diction that wants it, the taxing district can be precluded from levying the spe-cial taxes if taxpayers in the area who own property representing at least half the total assessed value sign a protest

and file it with the jurisdiction soon after the district is created.

So you might be able to stop it once it gets started, but you cannot stop the initial steps in creating the new taxing district except by the power of persua-sion at public hearings.

Of course, if property owned by one or a few persons in the area constitutes more than half the assessed value, the rest of the taxpayers cannot stop the levy of special property taxes to pay for the improvements.

Usually, big projects are favored by at least a few persons who expect to receive a special benefit from the public improvements; but the bigger the area in the district, the more likely it is to contain owners who object.

This natural consequence of includ-ing more than the minimum area needed to finance the improvements tends to prevent drawing boundaries that include people who are more dis-tant from the improvements and thus receive little benefit.

One part of the proposed constitu-tional amendment may be objection-able to everyone, since it would allow the use of state school levy revenue to pay for public improvements.

Even if you aren’t in the area where the special property taxes are levied, you might wonder what effect using the state school levy for something other than public schools would have on state funding for schools.

Tax increment financing may be a good approach, but it requires careful attention by voters before they decide whether to approve an amendment that allows it.

Bob Meadows is a Port Orchard resident.

IN OUR OPINION

Rep. Larry Seaquist’s scheme to fund education in Washington state is likely to be a big hit with the educa- tion establishment that so reliably fills his party’s cam-

paign coffers. But based as it is on a series of flawed assump-tions, the bill would do absolutely nothing to improve educa-tion and even less for the state’s struggling economy.

Seaquist, a Gig Harbor Democrat, this week introduced HB-1980, which would funnel an additional $1 billion a year into education by closing as-yet-undiscovered tax loopholes, and characterized the measure as a form of economic stimulus.

“Education is our state’s ladder out of this deep economic hole,” he said. “The prospects both for our young students and all our adults who are un- or under-employed are being dam-aged by the cuts we’ve had to force on our education system.”

So in other words, the way to generate more revenue is by producing better-trained workers for jobs that don’t exist.

Assuming they actually are better trained, that is.Back in the 1950s the state spent something like $2,000 per

student in inflation-adjusted dollars compared with the more than $10,000 we spend today to produce far worse outcomes.

If it isn’t clear at this point that education’s problems can’t be fixed by throwing more money at them, it never will be.

More fundamentally, though, closing tax loopholes — which were presumably created in the first place to promote behavior that stimulates the economy — amounts to nothing more than yet another tax hike.

Stripped to its essence, Seaquist’s bill would siphon capital from the private sector into the pockets of the education special interests with no evididence our students would wind up better educated and plenty to suggest they won’t.

With all due respect, business, not education, is the “ladder out of (the state’s) deep economic hole.” And confiscating more of the resources that companies and individuals need to keep themselves afloat during these difficult times is a sure way to make that hole even deeper.

Seaquist’s school funding bill a tax hike in disguise

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BOB MEADOWSIndependent Columnist

Public efforts to spur economy rarely do

PORT ORCHARDPORT ORT OR RCRCR HAHAH RDARDAINDEPENDENT

Page A6 www.portorchardindependent.com Friday, February 18, 2011 • Port Orchard Independent

quoteof theweek

“When I got my property tax bill this year I went up to the Assessor’s Office and asked, ‘What are you guys smoking?’ ”

— Fred Karakas, Bay Street Building Owner, whose valuation nearly doubled in one year

Write to us: Send letters to 2950 Mile Hill Dr., Port Orchard, WA 98366, or fax to (360) 876-4458, or e-mail to editor@portorchardindependent.com.

Opinions expressed are those of the author and do not necessarily reflect those of the Independent or its staff

Friday, February 18, 2011 • Port Orchard Independent www.portorchardindependent.com Page A7

By DON C. BRUNELL For the Independent

Necessity, as they say, is the mother of invention. That’s particularly true in these tough economic times, as “business and usual” no longer works.

As governors and state lawmakers across our nation deal with record budget deficits, tourism promotion is being slashed.

Many in the travel industry realize that if colorful travel brochures and television commercials are to continue, they will have to be privately funded.

For example, in Texas, tourism is the second largest indus-try, employing 525,000 people and bringing in $55 billion per year.

Still, lawmak-ers there propose to reduce the state’s $30 million tourism budget to $5 million to keep a skeletal program going.

They may be forced to eliminate travel promotion completely before the Legislature adjourns.

Elected officials in the Lone Star state are worried about wiping out tourism expenditures all together.

In 1993, for example, Colorado law-makers eliminated its promotion budget, and visitors to that state dropped by one-third within two years.

The annual revenue loss was well over $2 billion, and Colorado dropped from first place in summer resort states to 17th.

When funding was restored, it took the state seven years to rebound.

Unfortunately, due to our state’s budget deficit, Washington’s Tourism Department and its related marketing efforts are on the chopping block.

That’s not surprising, when you con-sider that Gov. Gregoire and legislators are struggling to find money for healthcare, education and social services.

The governor’s proposed 2011-2013 biennial budget calls for the closure of the Washington State Tourism office by June 30, 2011.

House Ways & Means Chair Rep. Ross Hunter, D-Medina, quickly released a supplemental budget which eliminates funding for activities to promote tourism, effective March 1 — three months earlier than anticipated.

So, public tourism dollars are all but gone, leaving those who depend on tour-ism between a rock and a hard spot.

Realizing that tourism is too important not to fund, there is an effort to privately fund tourism promotion in our state.

One of the leaders in that effort is George Schweitzer, chief operating officer of the Red Lion Hotels, who serves on the Washington State Tourism Commission.

He and others are creating a tourism alliance of all the industries that directly benefit from tourism.

They plan to ask the alliance members to privately fund tourism promotions to

keep travelers coming to our state.Washington benefits greatly from tour-

ism, but the state has never stepped for-ward like Texas, California, Alaska and even my home state of Montana.

Lawmakers in Montana, a state with one-eighth the population of Washington, allocate eight to 10 times more money for tourism than Washington.

In 2010, travelers to Washington spent more than $15 billion in the state. And despite the recession, a state Department of Commerce study shows that the num-ber of visitors — and the amount they spent — increased 7.4 percent over 2009, making 2010 the second best year on record in Washington.

Local and state tax coffers benefit as well: Travel spending generated nearly $1 billion in local and state tax revenue.

In fact, without visitors from outside the state, each Washington household would need to pay an additional $240 in taxes to generate the same amount of revenue.

Schweitzer points out that, while the travel industry supports some 144,000 jobs in the state, 85 percent of tourism-related businesses have fewer than 50 employees.

Tourism is important to our state’s economy — too important to be allowed to wither because of budget cuts, as hap-pened in Colorado.

Employers have often called on govern-ment to do things differently, to think out-side the box. It’s only fair that the private sector does the same.

Don Brunell is the president of the Association of Washington Business.

Private sector steps up for tourism GUEST OPiniOn

Don Brunell

Not sure what to say about this. It seems to me that we are paying now to recycle.

I take a large container to the street every other week to be picked up by the recycle truck. If I had to pay a deposit on cans, bottles and other con-tainers how exactly would

that work? Where would I take my pop

bottle to get a refund?

I would than have to pay not only a fee for curb side pick up but also a deposit on each con-tainer. Your suggestion brings up more questions than i have room for here. It just seems to me that this would cost way more than we would get out of it. — from mikers on Feb. 11

The amount of detail and the well-chosen quotes in this article gave me, the reader, a good sense of what went on at the Mustard sentencing.

Thank you for this excellent reporting.As for the 50-year sentence, I (who was present at much of the trial) feel justice was served and the sentence was appropriate.

— from kitsapguy on February 14

Was just wondering if the Pirates are going to take over Port Orchard this year.Would love to see it again this year. Not sure who enjoyed it more, my children or me. — from 1rhonda1 on February 13

RE: “ Washington should make recycling mandatory” — February 11

onlinereaders respond

Taken from comments posted by readers to stories at

www.portorchardindependent.com

RE: “Mustard gets 50-year sentence for 2009 murder” — February 11

RE: “ Pirates plunder Port Orchard” — September 15

A number of years ago, right after the Independent had moved into its current offices on Mile Hill Drive, the owner of the house next door saw me walk-

ing out to my car one afternoon and ambled over to chat.

He said he’d noticed the West Virginia University decal in my rear win-dow and wondered whether I’d been a stu-dent there.

I told him I had, class of 1980. He said he was in

the class of ’58.Then he asked wheth-er I was a native of West Virginia or had just gone there for school.

I told him I was born and raised in Morgantown.Turns out he was, too.He asked whether I’d gone to Morgantown High, and I told him I hadn’t.But my mother did, graduating in 1952. And so had my neighbor’s wife — also in the class of ’52.This was getting kind of spooky.He asked what my mother’s maiden name was, and I told him it was Pickenpaugh.He asked whether she was related to the Harry

Pickenpaugh who’d been the Morgantown Fire Chief, and I said Harry — better known as “Red” — was her uncle, my great uncle.Turns out the neighbor had replaced Uncle Red when he’d stepped down as chief.How strange that I’d cross paths with someone who’d gone to

school with my mother and was acquainted with my uncle so any years and so many miles away from home.But it may have happened again this past week-end when I stopped in to a local pizza place for a takeout order.When the clerk noticed the last name on my bank card, she pointed out the young man making up my order and told me his name was also Rhodes.We got to talking, and it turns out the Rhodes side of his family hails from the mining towns of southern West Virginia, same as mine.Maybe that’s why I’ve always felt right at home in Port Orchard. Not only do I have friends and neighbors here, but I might have family, too.How cool would that be?

— From “Rhodes Less Traveled,” by Jeff Rhodes

bestof the blogs

Taken from the staff blogs at

www.portorchard independent.com

Small world, big coincidences follow me to Port Orchard

Jeff Rhodes

By ERIC LOHNESFor the Independent

If Washington state could provide gov-ernment services at a lower cost, it would, right?

That only makes sense given the state budget deficit and the faltering economy.

Unfortunately, the state doesn’t appear to be taking advantage of civil service reforms allowing for competitive contract-ing — that is, private companies compet-ing with public agencies for the ability to provide services.

This is especially mystifying in light of the fact that other governments around the

nation have been successful with competi-tive contracting.

If done right, competitive contracting saves taxpayers money by introducing competition and rewarding cost savings.

This fosters efficiency and quality by allowing state agencies to draw from a spe-cialized and virtually limitless talent pool.

Even so, competitive contracting in Washington state keeps running into the two C’s — complexity and collective bargaining.

Agency managers often perceive the pro-

cess as complicated and confusing, waiting to see how other agencies fare before mov-ing forward into competitive contracting.

It should not be difficult for the state to use a simple “Yellow Pages test” when con-sidering whether to open a government service to competition.

If experienced companies that do the same work can be found in the local phone book, they should be invited to make a competitive bid.

Odds are good they can offer identical or improved service at a lower price.

Eric Lohnes is an analyst for the Washington Policy Center’s

Economic Policy Center.

Why do states compete with private companies?GUEST OPiniOn