Too little growth the result of too much regulation
June 12, 2008 · Updated 4:08 PM
Sound Off is a public forum. Articles are selected from letters to the editor or may be written specifically for this feature. Today, Silverdale resident Jack Hamilton argues that Kitsap Countys sluggish growth is directly related to government regulation.
In less than a week, Kitsap residents were treated to a number of news stories and editorials that are cause for significant concern.
The collective items should have resulted in some investigative follow-up. All we got were two letters to the editor.
The news materials concerned the slower-than-anticipated growth of the county, the Economic Development Advisory groups record of performance, the difficulties facing Kitsap Transit and several other items of a related nature.
OK, you ask whats the link? What do the stories have in common? Lets take a look.
Growth in communities requires real stimulus. The most common drivers are good-paying jobs and/or available affordable housing.
Bedroom communities require a combination of affordable housing and efficient transportation between home and the work place. Kitsap appears to fail on all three counts jobs, housing and transportation.
The single most significant factor in restricting economic growth and associated population growth in Kitsap County is government regulation and taxation policies.
Population growth projections for Kitsap assumed an expanding economy, providing reasonable-wage jobs to lure new workers. There has been no significant economic growth.
The jobs that were supposed to come here have gone elsewhere.
The underlying requirements for real economic development are a business-friendly environment from governments, a skilled labor force for business and a housing market that supports the business employees.
Of these, Kitsap has but one a trained labor force.
Unfortunately the missing elements preclude real business development and the available skilled labor force moves on and moves out. Government sending a few tax dollars to Kitsap for public works projects or projects like the Bremerton boardwalk project, does not constitute economic development.
Tax dollars are not an investment fund and public work projects are not economic development.
The regulatory burdens faced by businesses In Washington and Kitsap raise the financial risk for business wishing to locate here to unacceptable levels.
Fiscal and regulatory burdens placed on business by the state override any reasonable business model. Model results generally predict a low return on investment.
Our government expects the first business developing a new site to bear the full expense of bringing infrastructure to the location. Government interest in the industrial sites, such as the South Kitsap Industrial Area, is not the benefits of economic development to the people of the county.
Government interests are the tax revenues that will be realized.
SKIA is not a tax-gain prize for annexation, it is a site for planned industrial growth that should be maximized for total economic potential.
Faced with some of the highest regulatory business costs in the nation and looking at the potential expansion of programs like paid family leave to the private sector, businesses tend to look elsewhere for a future home.
Because all business is created by risk of private capital, it is appropriate that businesses should select locations that minimize risk.
Unfortunately, Kitsap has a national reputation for not being a good place to consider for business start-up.
Until both local and state government revise the regulatory and tax approaches taken toward business, our economic future will constrained.
The prospect for a more prosperous Kitsap will remain but a dream.
Businesses also need a trained, skilled work force. We have that available in both our ex-military/government workers and our children graduating from high school and college.
Unfortunately, the jobs they need are not here so they must search elsewhere for work. Some leave permanently, others join the large body of commuters who work in East Sound companies.
Meanwhile, the overall percentages of our workforce employed by government and cross sound employment continue to grow.
Instead of reaping a great economic benefit available from our work force, the largest share of the profit benefits are left behind in the workplace counties or the businesses pay no taxes.
The Economic Development Council (now renamed) has not been successful over the past 25 years in bringing major new business to the county. We continue to hear the same old promises of future success coupled with a need for more tax dollars to assure that success.
After all, everyone knows it takes money to make money. Might we question, whose money and what success?
Affordable housing in Kitsap is a dream long gone. Our housing market reflects the much higher Seattle market prices.
While our bedroom community residents can probably afford the inflated prices, wage levels in the county do not allow many locally employed workers the same benefit.
A worker earning the average wage in Kitsap cannot afford to buy a home here. A working family needs income of about $90,000 a year to become a homeowner.
Most private businesses that might come to Kitsap, and most of those already here, cannot pay that wage level.
Even dual-income families have a difficult time meeting the earnings criteria.
And what drives the cost of housing? To some degree, the East Sound market, but more significantly, government regulation over the past 10 to 15 years has been the primary inflator of home prices.
A recent study completed by a University of Washington economist revealed that the regulatory impact on homes in Seattle resulted in an average price increase of about $200,000.
The impact in Kitsap is estimated at between $130,000 and $200,000, depending on location. Thats not a cost created by so called greedy developers but a cost created by government regulation.
Transportation also plays a major role in economic development. Businesses need to move raw materials and supplies to their business and then move goods and services to market.
Businesses require roads and other transportation modes that are accessible, useable, and dependable. Businesses need assurance that their workers will be able to get to work dependably.
Kitsap has a less than exemplary record in meeting the transportation needs of the population and certainly has done little to support growth in the county.
Kitsap Transit, heavily subsidized by tax monies, while providing a cheap ride for commuters, really does little to fill the transportation needs of the county.
With a workforce of about 100,000, approximately 40 million commuter trips are made each year. Kitsap Transit carries less than 10 percent of the workforce commuters.
Ferries, absolutely essential to the continued employment of our commuter work force, are low funding priority for the state.
Roads rank at the very bottom of the priority ladder.
The road system in Kitsap grows less user-friendly each day.
Projects like the 305 HOV lanes, and Malfunction Junction in Silverdale cannot be considered improvements, regardless of marketing spin.
The everyday grid lock at the east bound merge of State Routes 3 and 303 is a continuing legacy of failed road planning. Bethel Road, after 10 years, remains both an eyesore and a fiscal disaster for businesses and property owners.
The only apparent government answer is to find more tax dollars to pour down the planning hole. To remedy the lack of new road construction over a more than 10-year period, the county plans a connector road from Clear Creek (at Malfunction Junction) to Old Frontier.
How that improvement resolves gridlock or enhances economic development is not clear.
The one thing that is certain is that, while it gets more expensive to fill your gas tank and more expensive to buy the groceries to feed the family, there is no apparent end to the government effort to empty your wallet first to fund their essential services and projects.
Its not bad enough that over-regulation by our government and failed policies have resulted in these unintended consequences; government will not relent.
Current land-use regulations restrict the use of available land for residential, commercial and industrial development. The regulations artificially inflate the cost of land, well outside the normal free market process, by simply restricting the availability of that land.
The law of supply and demand, now driven by government restrictions, is proven once again.
The cost to locate and operate a business or expand an existing business is prohibitive because of the land use regulations in the county. The county has taken to employing moritoriums to explore the acceptability of regulations without real consideration of the time-cost of-money on property owners, developers, and businesses.
Businesses should not be asked to serve as fiscal institutions to cover the ineptitude of government.
And so we come full circle. Growth projections are not met because there is no reason for growth. Economic development does not occur to provide the jobs that encourage population growth. Affordable housing is not available for employees so economic development is repressed. Transportation is not efficient and reliable for either work force or for business.
Growth projections are not met and still the harmful regulations increase.
If there is a question about population growth in Kitsap as opposed to other counties, perhaps the answer is found in that those other counties have not tried to implement land-use rules that far exceed the requirements or spirit and intent of state law.
Perhaps being the toughest has the unintended consequence of being the least likely to grow.
Do you see the common factor in all these stories?