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Friday, November 26, 2010

Impact Fees - One Revenue Option for the State

The Carnegie Group, a non-profit in the Olympia Area, has sent a letter to Governor Gregoire.

They are requesting that the State consider Impact Fees as an untapped resource 
that could help balance the revenue and budgetary  challenges ahead this session in Olympia.

Tom Holz is Past Chair of the organization. He is an expert on "zero impact design", which proposes attractive alternatives to existing drainage solutions which will literally allow responsible development which leaves little impact and can be built with existing technologies. He also serves on the Board of People for Puget Sound.

The Carnegie Group of Olympia
Buck’s Fifth Avenue

209 Fifth Ave. SE
Olympia, WA  98501

360 866 1791

November 9, 2010

Governor Christine Gregoire
Office of the Governor
PO Box 40002
Olympia, WA 98504-0002

Dear Governor Gregoire:


The State of Washington has suffered a severe setback in the 
recent election that has greatly worsened our budget crisis.  Temporary 
tax measures were eliminated, and Eyman Initiative-1053 makes it 
clear that new taxes require a two-thirds majority vote of the legislature.

The resulting inevitable budget cuts will hurt many people including 
children and troubled families.  Moreover the ability of the state to protect 
and preserve our environment is hamstrung at a time when the health of 
Puget Sound is hanging by a thread.

However, a state impact fee on new development remains an untapped 
source of revenue that does not require new taxes.  Currently massive 
subsidies are provided by the state for the development industry.  The 
state is forced to absorb enormous costs to build new infrastructure to 
support growth.  This new infrastructure is paid for by all state residents 
(through taxes) instead of only by those who create the demand for and 
benefit from the new infrastructure.  Because the newcomers are generally 
wealthier than existing state residents (they can afford new half-million 
dollar homes) this subsidy is in effect a transfer of wealth from the poor 
to the rich. 

We recommend that the state immediately commission an impact fee 
study to inform the legislature about fee schedules and to be completed 
in time for incorporation into a bill before adjournment.  The 
infrastructure to be funded by capital facilities charges (impact fees
on new dwelling units should initially include: 

  • State Parks
  • Schools and colleges
  • State transportation roadways and rolling stock (buses and trains)
  • State penal system
  • Justice systems
  • State Patrol capital facilities
  • Social and health services
  • State funding for new energy
  • State portion of water, sewer, solid waste

Voluminous analytical material is available on this topic from our 
own local jurisdictions and other states.  And, as the study progresses, 
other infrastructure facilities will be identified as candidates for funding.

We further recommend that, in lieu of a moratorium on development 
activity, the provisions of this law be retroactive to January 1, 2011.

The Carnegie Group of Olympia is prepared to help promote this 
bill to legislators and other citizen groups as well as to supplement 
the technical work needed on any impact fee research.

Thomas W. Holz, Past President
On behalf of The Carnegie Group of Olympia

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