More government services in Sequim means more taxes. The Sequim City Council has been trying to figure out how to pay for tennis courts at Carrie Blake Park ($300,000), soccer and softball fields on 12 acres just north of the park ($471,500), urban pathways and bikeways, the next phase of the Olympic Discovery Trail ($2,700,000), and a 45-acre wildlife refuge with a parking lot along Highway 101 west of Happy Valley Road ($1,080,000). The dream list of projects comes to $5,726,000.
The answer, according to an expert the council hired from out of town is to tax real estate developers for $4,385,000, which would cover most of these government projects.
Let me think a minute. Right now developers are going bankrupt around the country, lots sit empty, and if you think homes haven’t been selling, you ought to look at the stats for lot sales. Lot sales around Sequim and Port Angeles are virtually non-existent. So, let me see if I can understand the council’s thinking.
1. Tax developers for new projects, who are not likely to start a new development in the next three to five years, especially if the profits they might make (real estate development is a high risk business) are to be taxed away.
2. If and when they do start a project (which may not be for many years given the state of the market), hit them with a tax that they will be forced to pass on to all buyers of the lots in higher purchase prices. The tax will add about $4,000 to each house or condo, on top of all the other increasing costs. Don’t forget that taxes are always passed on to the consumer.
I love Sequim, and I’m thankful for our city council members who labor diligently on our behalf, but I must say that the constant tendency of government at all levels is to spend, spend, and spend. While I love public parks and nature trails more than the average person (I’m a jogger and nature photographer in my recreational time), I can’t afford more taxes. Yes, I may buy a lot some day from a developer, and I prefer to pay less rather than more. Who can afford higher taxes these days?
The other issue here is whether Sequim wants to encourage retirees to move to Sequim or discourage them. The sequence goes like this. Tax the developers and they pass the tax on the buyers, if they develop land at all. (Don’t assume developers will develop land in the coming several years. We’ve had tremendous overbuilding, a huge unsold inventory, and lots of upcoming foreclosures and bankruptices.) Higher prices for lots in Sequim will discourage some retirees from moving here, because many retirees want to have their dream retirement home built on a lot. Already Sequim has the highest utility hookup charges on the Olympic Peninsula as far as I know. Hookup charges for Port Angeles are about $3,000, but for Sequim they are about $10,000. See Sequim hookup charges here.
For those who want to close the gates into Sequim (and there are many), then higher taxes on the development of land makes sense. The higher the better. Keep everyone out. But for those who want to have an economy that stays above water, has jobs for people still working, and thrives, then moving here must be an attractive option. Remember, Sequim is not the only city in the list of “Best Places to Retire in the U.S.”
An opinion by Chuck Marunde, J.D., SequimRealEstateNews.com.
Last Updated on August 17, 2010 by Chuck Marunde