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LETTER TO THE EDITOR: ‘Kudos To Ralph Nichols For Another Great Article’

Kudos to Ralph Nichols for another great article. This time reporting on the Governor’s proposal to cut annexation sales tax credit (read that story here [1]). It provides all readers with an insight into the real workings and financing of an annexation. It also elicits further questions.

For example, Ralph writes, “this credit allows cities… to retain 0.2 percent of the state’s sales tax generated in the city…” This seems to differ from the Berk Report which states that the basis for the credit is the “city” sales tax collected not the state’s sales tax. This is important only in the sense that the City of Burien paid for the Berk report (or at least I am presuming it did) and there is a serious question about the Report’s findings.

A short while later, quoting City Manager Martin Ralph writes, “for the first North Highline annexation the city has received a total of $584,000 to date …” The obvious question then becomes ‘well what about the $5 million?’ To date generally means from beginning (April 1, 2010) to now (date). So, if for more than a year, the city has received $584,000 where are all the discussions about $5million per year coming from? What is the factual basis for that hope of $5 million per year? Remember, both the first annexation area and the proposed annexation area are over the 10,000 population mark needed to attach to the credit.

Another question has to do with a quote (Nichols, Sept 20, 2011 [2]) from the City Finance Director Kim Krause in which she said that the “south” north Highline “has paid for itself”. If that is accurate then how does Burien qualify for the $584,000 it received from the tax credit? It is my understanding that the credit is only available if the costs of servicing the area annexed are greater than the revenues generated from the area. State law provides, “The revenues from the tax … may not exceed that which the city deems necessary to generate revenue equal to the difference between the city’s cost to provide, maintain … services.” RCW 82.14.415(7). I sense a bit of a contradiction or confusion about this. This needs to be clarified by someone in power.

So I guess what I am asking is, when are the real financial facts about annexation going to be forth coming and what will the city council do to acquire these facts?

Again a great job by Ralph in getting out some of these inconsistencies.

– Chuck Rangel

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