Policy Concepts

As Strong Towns founder Charles Marohn notes in their Curbside Chat, "The primary determinant of the future prosperity for cities will be the ability of local leaders to transform their communities."

However, limits on property taxes force cities and towns in WA to compete with each other for sales tax revenue, while also removing economic incentives to nurture "strong towns." These distorted state policies prompt local elected officials to lure big-but-fragile projects rather than nurture financially productive communities with human-scale streets. How so?

1. Cities and towns compete for high-revenue retailers that will:

   • pull customers to drive from beyond their borders to make big purchases, competing for revenue with neighboring cities,

   • increase out-of-area vehicular traffic,

   • inhibit viability of local businesses, and

   • dilute opportunities for neighbors to connect.

2. Cities and towns receive no greater revenue by cultivating productive buildings and development patterns due to the 1% Levy Increase Limit, which also suppresses revenue well below inflation.

...and then, as a last gasp to balance the budget and avoid choosing between abandoning critical services and infrastructure...

3. Cities and towns routinely beg their citizens to approve more taxes, designating a set of projects or services which they anticipate a majority of their voters will support.

The state needs to stop pushing our cities and towns into financial fragility.

We need the WA legislature to structure local revenue that nurtures long-term resiliency while nurturing productive places for people.

What kind of local revenue model would do this? Here's what we're thinking...

1. Redistribute sales tax revenue. Instead of sales tax benefiting the place that collects the tax, distribute it to the places where people reside, based on the population of each community. This stops inter-local competition for sales tax dollars and encourages cities to nurture great places for people. (Local option sales taxes would need to be carefully addressed so that cities with these can fulfill existing obligations funded by this revenue. Beyond this, we may consider reducing or eliminating sales tax, either generally or specifically to improve the economic viability of reusing and repairing goods, or substituting imported goods with local goods/services.)

2. Remove the 1% Levy Increase Limit for cities and towns. This would create an incentive for cities and towns to support the development of productive places that people value most, as cities would be financially rewarded for making their town more valuable. Local elected officials would become more accountable for the fiscal policies they support in their city.

3. Allow taxes on real estate improvements to be reduced in exchange for greater tax on land value. A "land value tax" encourages land owners to make the best use of their most valuable land, and captures the value created through public investment that would otherwise be received as a windfall gain by land owners.

Many communities recognize the vast benefits of trees in cities. Many cities have identified (1) metrics to track the amount of trees in their city (i.e., tree canopy percentage) and (2) a target for that metric (e.g., 40% coverage in Kirkland). To work toward these goals, cities commonly create complicated regulations to restrict the cutting of trees, or requirements to plant trees, with monetary penalties if trees are removed against regulations. Few cities have achieved their goals with this approach. This seems a potential opportunity for the state to provide cities with a new tool to help them achieve their goals and realize the benefits of trees in cities.

The state could enable a market-based approach that would allow cities to set a target and administer economic incentives to encourage land owners to plant and nurture trees. In particular, sites that provide less than the target would pay a fee, and those with more than the target would receive a credit/refund. 

Cities could calculate the tree canopy cover for each lot algorithmically based on LIDAR surveys, orthographic imagery, or similar approaches. The cost of each square foot above or below the coverage target would be determined by the market; if there is less than the target canopy level, the excess funds collected could be used to plant trees or acquire land for public trees. With this model, land owners would be empowered to make their own decision on the amount of trees to retain, informed by the economic pricing that reflects the public benefit of trees (or the public impact of their removal).

It's likely that this basic measure of tree canopy isn't perfect, as it fails to account for the greater benefit of native trees, or trees of greater volume. But the specific metric could certainly be incrementally improved over time.

Here are some more concepts that we've discussed and plan to write about in the future...

• Curbing harmful infrastructure subsidies.

• Keeping us moving:

  • congestion point tolls at surface street chokepoints.

  • reduce surface street congestion by replacing on-ramp metering with on-ramp reservations

  • keep buses moving reliably by legalizing 'yield-to-bus' enforcement cameras

• Fixing the State Environmental Protection Act and regional growth policies to unleash infill growth near high-capacity infrastructure.

• Water rights: a balancing act for people, nature, and agriculture.