Thursday, October 11, 2018

Sustainable Service and Revenue Task Force meets October 15th, Doesn't Look Very Sustainable

The new Sustainable Services and Revenue Task Force meets on Monday the 15th, and they have a very meaty agenda.

This is a real agenda!
(in contrast to the Public Transit Task Force's, for example)
But they might also be tackling the problem in the wrong way.

They are starting with member poll about preferences on revenue sources to investigate further.

An initial poll to rank prospective sources
The Committee should instead back into funding by asking about policy. What do we want to do more of? What do we want less of? We should align fees and taxes so that they encourage things for which we have positive policy and discourage other things for which we have negative policy. The Strategic Plan and Comprehensive Plan should be controlling documents.

Structured as a preference, as the politically popular, or as what the most powerful and wealthy special interests will tolerate, in new fees and taxes we will almost certainly get misaligned incentives and less efficient or less just outcomes.

Just before the gas tax of 1919,
in October 1918 bonding was considered
One of the possibilities is a local gas tax. Down at the end of the two page discussion is mention that the Congestion Relief Task Force may be recommending projects for which new funding is needed.

2 pages on a local gas tax
Fundamentally this misses something crucial: We should align a gas tax with decongestion pricing and decarbonization, and allocate decongestion funding to non-auto mobility. "Business as usual" leads to catastrophe. The Intergovernmental Panel on Climate Change just released a report, "The Special Report on Global Warming of 1.5ÂșC," and they say
Transitional changes are already underway in many systems but limiting warming to 1.5°C would require a rapid escalation in the scale and pace of transition, particularly in the next 10-20 years. While limiting warming to 1.5°C would involve many of the same types of transitions as limiting warming to 2°C, the pace of change would need to be much faster. While the pace of change that would be required to limit warming to 1.5°C can be found in the past, there is no historical precedent for the scale of the necessary transitions, in particular in a socially and economically sustainable way. Resolving such speed and scale issues would require people’s support, public-sector interventions and private-sector cooperation. [italics added]
And new Nobel Laureate economist William Nordhaus, whose work has focused on climate disruption,  said
The policies are lagging very, very far — miles, miles, miles behind the science and what needs to be done. It’s hard to be optimistic. And we’re actually going backward in the United States....

At the end, talk of congestion
A revenue strategy that fails to dovetail with these values just makes things worse.

Moreover, if we want to think about "sustainability," we need to fold maintenance and replacement costs into the way we consider initial capital costs. A fiscally sustainable project will also envision the end of a project's first lifecycle and its transition to a second one.

In areas of your special interest you might see similar problems with other potential revenue sources. There is a good-sized list of prospective ones, and probably an equally sized list of misalignments.

Altogether the inception of this Task Force is oriented too much toward a set of ad hoc solutions and not to an integrated, values-driven approach. This makes a package more likely to be incoherent and unjust.

Addendum, October 28th

The agenda for the next meeting on the 30th is out. There are no additional materials published with it, and there does not seem to be much to say for the moment. Maybe it'll generate another post, or maybe not until the next meeting. At any rate, here are the top 7 ideas, and they seem uncoordinated with any policy considerations. But a gas tax made the cut!

October 30th agenda


MikeSlater said...

You write: "The Committee should instead back into funding by asking about policy. What do we want to do more of? What do we want less of?" In some ways, that's not the Committee's job. They are hardly a representative body to answer the question of what we want more or less of. That's the Council's job and, in some ways, they've given us the framework of their answer with the Mission, Vision, and Values statements that came out of the strategic planning process. If you look at the language of those statements, it provides reasonable good directions: livable, safe, sustainable environment, equitable. Those words provide a reasonably good criteria if they apply then to their taxing options.

Salem Breakfast on Bikes said...

Not sure I understand your criticism. You selectively quoted, perhaps to set up a bit of a straw man? The full quote is:

"The Committee should instead back into funding by asking about policy. What do we want to do more of? What do we want less of? We should align fees and taxes so that they encourage things for which we have positive policy and discourage other things for which we have negative policy. The Strategic Plan and Comprehensive Plan should be controlling documents."

The problem is that the introductory materials do not start with the Strategic Plan and Comprehensive Plan.

But also, you may overestimate the power of the Strategic Plan. Elsewhere you say "There was a lot of skepticism when the strategic planning process started that it would be an exercise in futility. It turned out to example of good government. Even the anodyne mission statement and values creates the opportunity to make a strong case for equity, climate change preparedness, and quality of life considerations in the upcoming assessment of the comprehensive plan."

Here, we have seen how there is lots of juicy policy language in the TSP that ought to provide the basis for transforming our transportation system, but systematically, and most notably in the SRC process, the City has interpreted it in the weakest way possible, sometimes even ignoring outright portions of it.

This is why more detailed language with better benchmarks and a feedback loop for accountability has seemed more useful than "anodyne mission statements."

In any case, instructions to the committee should include - indeed lead with - applying the Strategic Plan as criteria to the taxing options, as you suggest. But this is not yet on the agenda or in the white paper. You'll note at the end of the white paper a two-axis evaluation grid: political difficulty vs. magnitude of revenue. Nowhere is the mission statement or values referenced.

Susann Kaltwasser said...

Where can we get the most money without too much resistance vs how can we get the most money that is just and fair?

Some years ago the City adopted the approach that development fees paid for permits should based on the real costs to provide services. As development increased, the City could hire staff to facilitate timely processing of the permits.

But we do not do this across the board. For example, system development charges (SDCs) levied on new development do not cover the actual costs of providing those services. The reason that is given is because it increases the cost of housing so that more people are priced out of the market. To me this is a bogus argument, because many factors go into the price of a house other than SDCs. What happens is that builders set the standards for what is in a house and they fail to recognize the market's needs over a large profit. Cut back on square footage, or fancy amenities like marble countertops and Jacuzzi tubs!

There is a new development in East Salem on the old Pictsweet mushroom land. 117 acres with 0ver 800 houses. The big problem is getting services to this island on the perimeter of the UGB. The City is offering to pay for the water and sewer lines out of the SDC funds in order to help make this development possible. So, all the other development in the area is going to subsidize this project. One would say this is a reasonable system, but will it result in needed middle income housing? The developer may say that it will, but what is the realistic definition they will use.

The developer is proposing 'skinny lots' and row houses to reduce costs, but still the projection is that the houses will be sold at $250,000 to $300,000 each. I doubt the average family can come up with the $25,000 to $30,000 downpayment.

But even if this all goes through, how does the City plan to provide the other necessities for such development? How will the traffic be accommodated? How will the lack of shopping, buses, and schools be addressed? And what about the need for places for people to park on tiny lots (20 ft x 90 ft) without creating a lot of on-street parking?

All of this will have to be maintained as well. If development does not pay its true costs, then the burden is shifted to the rest of us. Is that fair?

I don't think the committee is being set up to answer those questions. But we need to have a real discussion with the whole community, and not just the usual suspects from the building community.

Salem Breakfast on Bikes said...

Updated with agenda for the October 30th meeting and the top 7 revenue ideas.