City of Kirkland Tax Burden Analysis
The City of Kirkland has conducted a Tax Burden Analysis to help the City Council make decision with regard to Kirkland’s $13.8 million budget shortfall. Some interesting numbers show up in the report. Of particular interest is Exhibit 5: Residential and Commercial Contributions to Major General Fund Tax Revenues.
This exhibit shows how over the past ten years, the ratio of taxes paid by commercial and residential tax payers has shifted significantly. In 1997, residents and businesses each “contributed” equally to the general fund. However, today that ratio has shifted to where residents are paying 59% of the burden and businesses are paying 41%. How did this happen? The answer is largely due to the faster rise in assessed values of residential property over commercial property in the past ten years.
You may download the Tax Burden Analysis here (It is a 2.1 MB PDF).
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By N2H
KCTS 9 Connects - Yakima Valley Gangs
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If only there was some way to increase the square footage of commercial buildings. Some way, some how.
I’m racking my brain trying to come up with a way we could INCREASE the amount of leasable square footage in a finite number of city blocks that have been zoned as commercial. We can’t increase the footprint or size of downtown since we are hemmed in by water, freeway and housing… we can’t go down because we need natural light for shoppers and commercial workers. We need to figure out some direction to go.
Any help would be appreciated.
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John’s post drips with sarcasm like a cottonwood tree drips rain in December - assuming it is still standing :)
This city depends on various forms of tax revenue. Property tax is one, sales tax is another. One benefit of building taller buildings is the greater property tax valuations. But there are more benefits. If it is a store or restaurant, it draws more sales tax revenue. If it is an office, those workers spend money in town as well, and ditto for residents if it is a condo.
Don’t forget that there is sales tax paid on contruction costs, and that is a large dollar amount for each new building. Yes, each contruction project is a one time event, but multiple projects over the years keep rolling the dollars in, and they can be used to pay for one time expenditures.
I wish that someone on the City Council would point out the cash flows that these projects create, especially when they are argueing the merits of a project. While many people fear more traffic or gigantic, ugly buildings, we must realize that stopping redevelopment stifles economic growth and helps push the budget into the red.
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John Gilday Reply:
August 9th, 2008 at 3:00 pm
Stop, you’re killing me!
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mike nienaber Reply:
September 11th, 2008 at 11:15 am
Good words John and Ghost:
Let us “rise” above the insanity and start building up. Why do you think Bellevue is awash in money? What did I see, they’re spending 40 more million on parks. Not in behind-the-times Kirkland.
BTW only in Kirkland would a cottonwood tree not be standing. It would have drowned in the standing stormwater left on private land by the Public Works Dept.,Planning Dept and City Council.
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This increasing gap between residential and commercial could have something to do with the fact that most commercial property downtown is grossly undervalued from a taxation standpoint. For example, take a look at the BofA site that y’all been flapping about for a while. It’s tax assessed value for 2009 is 36% of what was paid for it in 2008. This amounts to a tax subsidy to commercial property owners. Individual home and condo owners properties are general closer to 80% of market value. Play around on King County’s Parcel Viewer and see for yourself.
http://www.metrokc.gov/gis/mapportal/Pviewer_main.htm
Tracy Dunlap’s letter to Dave Ramsay, regarding the tax burden study shows that a large gap has opened between contributions from the business sector and the residential sector. While these were at parity in 1997 - around 50% each - residents now pay 59% of the burden, while business/commercial pays 41%. That is an 18% gap that occurred over 10 years.
Tracy states that residential values have risen faster than commercial as one of the reasons. However, I think it is more like residential assessments have risen faster than commercial assessments. Play around on Parcel Viewer and see for yourself.
With major portion of the City’s tax revenue tied to auto sales, the City gets a double whammy as the overall economy slows down, disposable income and general spending slow, but this even more so of new auto sales.
Increase retail square footage downtown, and quit letting non-retail business open in retail spaces, as I believe current code states. (Hallmark would be an exception, since they have been in that space longer than the code has existed). This would make it more interesting to shop downtown, and generate additional, needed, sales tax revenue. (Banks and real estate company’s don’t).
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