A Walmart in Lynden?
A Walmart in Lynden?
Lynden’s sales tax revenue has been declining for a few years, but now it appears that the city is prepared to do something about it (by the way, Ferndale and Blaine are facing the same issue).
Lynden’s sales tax revenue has been declining for a few years, but now it appears that the city is prepared to do something about it (by the way, Ferndale and Blaine are facing the same issue). Conversation is occurring about hiring a consultant to help figure out how to bring more retail sales to the city. Normally, this would be a non-issue for Bellingham and others in the county, but it may be a foreshadowing of impending issues. As the goal to densify Bellingham progress, in order to protect against urban sprawl, the pressure to bring more retail into the small city limits in the county is going to intensify,
Why? sales taxes. Sales tax revenues decline along with retail sales, so small cities are under constant budget pressure to figure out how to increase the tax base to meet basic expenses. Citizens move into the small cities, and then head to Bellingham to shop. Bellingham gets the sales tax revenue. For a number of years, Lynden has had zoning restrictions on large retail establishments, but nothing would fix the sales tax base issue like a Walmart or other big box store. From an economic development standpoint, one or two big stores are much better than a bunch of little stores, at least from a sales tax revenue standpoint (and by the way, much more convenient for the Canadian shoppers who currently head to Bellingham bypassing Lynden, Ferndale and Blaine). Although no big box store is in the immediate future, we cannot underestimate the pressure that might be placed on local governments to seriously consider it at some point to solve budget shortfalls.
Thus the dilemma, are we better off with a centralize, hub and spoke, model where most of the people shop and work in Bellingham, with everyone outside of Bellingham commuting into the hub. Or, are we better off with a distributed model where all of the cities in the county are self-contained and have enough shopping, jobs and retail businesses so people have to go into Bellingham less frequently. This approach would have less of an impact on traffic on major roads, a more distribute tax base, and less consumption of gas. It may not be feasible to micromanage either solution given that most of the jobs are currently in Bellingham and attracting significant jobs to the small cities will be challenging. Certainly nothing is going to change much in the next decade, but factors like the sales tax structure are going to be a constant pressure on the system and may lead to suboptimal results in the long run if not properly thought through.
Why? sales taxes. Sales tax revenues decline along with retail sales, so small cities are under constant budget pressure to figure out how to increase the tax base to meet basic expenses. Citizens move into the small cities, and then head to Bellingham to shop. Bellingham gets the sales tax revenue. For a number of years, Lynden has had zoning restrictions on large retail establishments, but nothing would fix the sales tax base issue like a Walmart or other big box store. From an economic development standpoint, one or two big stores are much better than a bunch of little stores, at least from a sales tax revenue standpoint (and by the way, much more convenient for the Canadian shoppers who currently head to Bellingham bypassing Lynden, Ferndale and Blaine). Although no big box store is in the immediate future, we cannot underestimate the pressure that might be placed on local governments to seriously consider it at some point to solve budget shortfalls.
Thus the dilemma, are we better off with a centralize, hub and spoke, model where most of the people shop and work in Bellingham, with everyone outside of Bellingham commuting into the hub. Or, are we better off with a distributed model where all of the cities in the county are self-contained and have enough shopping, jobs and retail businesses so people have to go into Bellingham less frequently. This approach would have less of an impact on traffic on major roads, a more distribute tax base, and less consumption of gas. It may not be feasible to micromanage either solution given that most of the jobs are currently in Bellingham and attracting significant jobs to the small cities will be challenging. Certainly nothing is going to change much in the next decade, but factors like the sales tax structure are going to be a constant pressure on the system and may lead to suboptimal results in the long run if not properly thought through.
2 Comments