The Impact of Taxes on Planning
The Impact of Taxes on Planning
In the ongoing discussion over land use, no one has brought up what potential impact the financing of city and county government has in the land use decision making process. The fact is that tax reve
In the ongoing discussion over land use, no one has brought up what potential impact the financing of city and county government has in the land use decision making process. The fact is that tax revenue is the life blood of every government and we have to assume that our local governments will follow the money in their planning efforts. If the tax dollars and the comprehensive plans are not in alignment, we are going to be hard pressed as a community to achieve our objectives.
Tax revenues come from four primary sources, the B&O tax, property taxes, sales taxes, and charges for fees and services (garbage, sewer, water). For purposes of this conversation only the first three will be dealt with as they have the biggest potential impact on the planning process. The B&O tax and the sales taxes are going to help determine where businesses locate, while property taxes will have some influence over where people live. Businesses and property owners make decisions for lots of different reasons, and it is never just about taxes, but to ignore the conversation is probably not wise as well.
The picture has three graphs showing the revenue generated through the B&O, property, and sales taxes, on a per resident basis. A couple of potentially important points jump out, ignoring the most obvious that taxes per person is increasing across the board at a healthy clip. The first is that Bellingham is getting much more revenue per person from B&O and sales taxes. This is consistent with Bellingham being the shopping and employment hub of the county. The second is that sales and B&O taxes are increasing, while property taxes are being held fairly steady. The implication of this is that the struggle for tax dollars is going to occur with businesses and not property owners. Most of the planning discussions occur in regards to housing and where people live. It seems, however, that where people shop and work may be as important if not more important. Not only does where people shop and work have greater implications for city coffers (Bellingham gets three times more revenue from businesses than property owners), but it will also have some impact on where people choose to live. If the community dialogue does not include housing, business, and shopping, then we may end up with something different than we thought from the inertia of cities trying to fund their services.
Tax revenues come from four primary sources, the B&O tax, property taxes, sales taxes, and charges for fees and services (garbage, sewer, water). For purposes of this conversation only the first three will be dealt with as they have the biggest potential impact on the planning process. The B&O tax and the sales taxes are going to help determine where businesses locate, while property taxes will have some influence over where people live. Businesses and property owners make decisions for lots of different reasons, and it is never just about taxes, but to ignore the conversation is probably not wise as well.
The picture has three graphs showing the revenue generated through the B&O, property, and sales taxes, on a per resident basis. A couple of potentially important points jump out, ignoring the most obvious that taxes per person is increasing across the board at a healthy clip. The first is that Bellingham is getting much more revenue per person from B&O and sales taxes. This is consistent with Bellingham being the shopping and employment hub of the county. The second is that sales and B&O taxes are increasing, while property taxes are being held fairly steady. The implication of this is that the struggle for tax dollars is going to occur with businesses and not property owners. Most of the planning discussions occur in regards to housing and where people live. It seems, however, that where people shop and work may be as important if not more important. Not only does where people shop and work have greater implications for city coffers (Bellingham gets three times more revenue from businesses than property owners), but it will also have some impact on where people choose to live. If the community dialogue does not include housing, business, and shopping, then we may end up with something different than we thought from the inertia of cities trying to fund their services.
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