LETTER: Reader’s Rebuttal Against Our Analysis On Proposed Annexation


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Jack Mayne wrote an interesting analysis of the Berk Report and the issues regarding the annexation of the North Highline area. I would however take issue with part of his findings.

The article correctly states that the Governor “proposed eliminating the annexation Sales Tax Credit” and further “which her budget office projects would save $17.8 million”. It was also reported on October 27, that the Governor states her action terminate “a tax credit that benefits seven cities in King, Pierce or Snohomish counties.”

Okay so let us put this in real numbers. $17.8 million divided by seven cities is $2.5 million average. Not quite $5 million or even close. Since this credit is also based upon size of the city and the size of the annexed area, it is more than fair to say that larger cities than Burien are getting closer to the max amount.

Now look at the Berk report. It states in Findings #2 paragraph 1 that, “the annexation sales tax credit allow the city … up to the maximum 0.85% of the total CITY sales tax revenue not to exceed $5 million a year.” [Emphasis added]

Let us do the math on that. The city of Burien as averaged less than $5 million TOTAL sales tax revenues for the past four years (city budget records). If we use $5 million as the base amount sales tax revenue and multiply by 0.85 % we get $42,500 which would be the calculated annexation sales tax CREDIT to be received not $5 million. ($5,000,000 X 0.0085 = $42,500.) The Berk report uses this max $5 million figure throughout the rest of its report. Is that a reasonable number for the City Council to base its decision upon?

In a different publication by the Municipal Research and Services Center of Washington it states, “The tax is a credit …against the 6.5% STATE SALES TAX, so it is not an additional tax to a consumer.” This appears to contradict the Berk Report as to the basis of calculating the “credit”.

The numbers in Mr. Mayne’s article, previous B-Town blog article, and in the Berk Report just do not “pencil out”. Whether or not the Governor eliminates the Sales Tax Credit to cities is a critical factor. It however should not end nor allow for what appears to be erroneous numbers in this annexation debate. Either the money ($5million) is there or it is not. Seven cities cannot get $5 million each from a pot of $17.8 million.

– Chuck Rangel

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Comments

15 Responses to “LETTER: Reader’s Rebuttal Against Our Analysis On Proposed Annexation”
  1. Robert Howell says:

    Thanks Chuck. This is a real eye opener.

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  2. Tom Harmon says:

    Sadly, I don’t think that facts are part of the equation in this one way train wreck.

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  3. Bonnie Moormeier says:

    Thanks, Chuck – I hope they do eliminate the tax credit altogether to make annexation less appealing to the City Council. Surely, then they can’t claim it is revenue neutral!

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  4. Christine says:

    I just do not see the upside for Burien. Would love to see a neutral list of pros and cons as well as the real costs to the city. I think a city looking to expand should already have their own police department not leased County Police and a permanent animal control facility owned by the city.

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    • TcB says:

      We contract with King County for police because we get great service for a lot cheaper than having our own force. Having a city police force would mean huge cost increases. I think it’s great service anyway…

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  5. SD says:

    Chuck, thank you — like your common sense approach!!

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  6. WC says:

    If the State takes away the sales tax credit then the City of Burien would stop getting whatever they are getting for the first annexation a year and a half ago. The City of Burien should start worring about how they will fund services to their existing areas.

    Also, (new subj.) Why is there a “Jerry Robison” campain poster on SW 107th St.
    just East of 15th Ave SW. This area is NOT in the City of Burien and in fact is at least 5 blocks out of that city. Please have Code Enforement remove said sign.

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    • Elizabeth says:

      Is one sign out of place really that important to tie up Code Enforcement?

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      • Ian Gunsul says:

        It’s not against any code/law to place a campaign sign outside of the district/munincipality that a candidate is running for office in.

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      • J says:

        Code enforcement is too busy harassing tax paying businesses.

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    • areyoukidding says:

      I bet if you tried really really hard you could probably pull that big bad sign up all by yourself..*lol*

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      • Ian Gunsul says:

        Actually, messing with campaign signs is against the law, unless they’re placed on your own private property without your permission. Most reported cases are treated as petty theft, larcency or vandalism, but in rare cases treated as a felony.

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  7. William Forest says:

    I’d like to know what Mike Martin is doing spending in White Center briefing them on his plans for annexation.. I think Martin overstepped his bounds as manager and is playing mayor or city council member.. Annexation is not a done deal and I think its a party foul to be drumming up support for it outside of Burien. If Edgar Lucy and Debbie were on the council I doubt he would overstep his authority like this.

    See Link..

    http://www.highlinetimes.com/2011/11/05/news/burien’s-city-manager-discusses-latest-annexation

    Excerpt:>>>
    Burien’s city manager discusses the latest in annexation and new hires

    By Ty Swenson
    2011-11-05
    At the North Highline Unincorporated Area Council hearing on Nov. 3, Burien City Manager Mike Martin presented his monthly status report to the group.

    Annexation
    Martin said Governor Gregoire’s proposed cut to the sales tax credit for cities annexing unincorporated areas is not as simple as media has reported.

    “She is proposing to eliminate the present and future tax credit,” Martin said. “It is a proposal that relies on changing the law through legislation. That seems to be lost on a lot of people; there is a whole legislative process, a gauntlet that must be surmounted to actually do this.”

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    • Ian Gunsul says:

      He was briefing the NHUAC on what is actually going on with Burien’s annexation plans instead of letting them rely on misinformation posted in the comments sections of local blogs.

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      • Willam Forest says:

        Was he doing this on his own time or city time?

        Was he doing this on his own initiative or at the direction of the Burien city council.

        I think these are pertinent questions.,

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