Gas prices quell hope of economic growth in South Kitsap
By ROBERT MEADOWS
Port Orchard Independent columnist
June 30, 2008 · Updated 11:05 AM
For years now, “growth management” has seemed to involve efforts to control land use to restrict real estate development in some areas and hope for economic development in others.
What happens when there is little growth to be managed by government?
Many people had supposed that completion of the Tacoma Narrows bridge project would spur population and economic growth in South Kitsap. Rush-hour traffic congestion on the old bridge was an obvious impediment to growth.
It seemed logical that people and businesses would be attracted to South Kitsap within a couple of years after the two bridges were in full operation. Give people time to notice the improvement, the theory went, and they would take advantage of it.
While we would still be off the beaten path called the I-5 corridor, at least we would be easier to reach. Anyone seeking a less-urbanized place to live and do business could rely on getting to and from here in a much shorter time.
But now that motor vehicle fuel prices have soared, the logical result of the bridge project doesn’t seem quite so likely anymore.
Our distance from the commercial and industrial centers on the other side of Puget Sound has always been an obstacle because of travel time, but now the fuel cost is also significant.
When fuel was far cheaper than bottled water, its cost hardly mattered compared to the time needed to cover the distance. But it matters now.
People who have accepted the argument that growth doesn’t pay for itself may feel relieved that growth might be stymied by fuel costs.
If growth truly does not pay for itself, why do government leaders all over our nation typically do what they can to achieve that growth?
For the past seven years, growth has apparently done more than pay for itself in Kitsap County.
Notice how local governments are trimming their capital spending plans now that real estate development has slowed. The real estate excise tax is their main source of revenue for capital projects, and it’s collected whenever real estate is sold.
Note, too, the decline in county sales tax revenue this year.
Sales taxes paid by the construction industry represent a significant part of total sales tax revenue.
The county’s property tax levies have been keeping pace with inflation and population growth without significant increases on previously developed property, since new construction has been adding approximately 3 percent a year to the total levy amounts.
While many of us would probably prefer to have more jobs with higher pay available in our community, growth has increased local employment opportunities.
Flip the situation around and consider the result. Governments will have less revenue, unless we agree to raise our taxes.
If the local economy stagnates, we face longer commutes while paying more to fuel our vehicles.
Some people fret about becoming “another Bellevue,” but such an outcome seems unlikely regardless of the cost of fuel. We’re not so close to the Seattle-Tacoma metropolitan area that we need to be concerned about such growth.
Instead, we need to focus on ways to grow despite our distance from that metropolitan area.
People will eventually adjust to the high cost of motor vehicle fuels. Just as the average fuel mileage of private vehicles went down in the past 25 years, it will go up as people switch to more fuel-efficient vehicles.
Government has to do the necessary things to make our community desirable to people and business whether fuel prices stay high or not.
Those necessary things include good schools, good roads, effective law enforcement, efficient courts, and land-use regulation that accommodates private enterprise rather than hobbling it.
Almost every economic development venture involves a risk of failure, so government ought to leave the risk-taking to private investors to the extent possible.
Attracting new businesses and accommodating the growth of existing businesses generally require the availability of public funds, whether they are used for personnel costs or building infrastructure.
When local governments try to take the place of private investors, the tax burden carried by us all reduces our ability to pay for the things government must do.
The temptation is apparently great to spend public funds and use the government’s credit for development projects that offer some promise of economic growth.
We have several examples of such uses of public funds and credit: the new marina and condominiums in Bremerton, the possible expenditures for the “SEED” project, and the continuing expensive effort to provide passenger-only ferry service between Bremerton and Seattle.
If we face a period of slow growth, as we seem to be, our leaders need to weigh carefully the risks they take with scarce public funds.
Efforts to “jump-start” a lagging economy are occasionally wise and necessary, but the things governments must do have to come first.
Robert Meadows is a Port Orchard resident.