Title: An act relating to the blue ribbon commission on land use and local government finance.

Brief Description: Creating a blue ribbon commission on land use and local government finance.

Sponsors: Representatives Romero, McIntire, Haigh, Dunshee, Moeller, Clibborn and Morrell.

Brief Summary of Substitute Bill

• Creates a blue ribbon commission on land use and local government finance to understand and make recommendations on the impact that current trends in city and county revenue sources and expenditures may have on land use decisions made by counties and cities and meeting goals of the Growth Management Act.

Majority Report: The substitute bill be substituted therefor and the substitute bill do pass. Signed by 7 members: Representatives Romero, Chair; D. Simpson, Vice Chair; Jarrett, Assistant Ranking Minority Member; Clibborn, Edwards, Moeller and Upthegrove.

Minority Report: Do not pass. Signed by 4 members: Representatives Schindler, Ranking Minority Member; Ahern, Ericksen and Mielke.

A blue ribbon commission (commission) on land use and local government finance is created to understand and make recommendations on the impact that current trends in city and county revenue sources and expenditures may have on land-use decisions made by counties and cities and meeting goals of the Growth Management Act (GMA).

The commission must begin work in June 2004 and complete its work by June 2006, submitting a report on its findings, conclusions, and recommendations to the Governor and the appropriate committees of the Legislature by November 2005.

The qualifications for the commission's 13 members are specified: four legislative members (one from each major caucus), seven appointed by the Governor (one at large member and one each with expertise in the following areas: city finance, county finance, city land use, county land use, environmental land use, and intergovernmental finance), and two ex officio non-voting members (Director of the Department of Community, Trade, and Economic Development (CTED) and Director of the Department of Revenue (DOR) or their designees).

Staffing will be provided by the CTED and the DOR, with additional staff to be provided by other state agencies and the Legislature, as required.

A blue ribbon commission on land use and local government finance will include an inquiry into annexation under the "buildable lands" provisions of the GMA.

Effective Date of Substitute Bill: The bill contains an emergency clause and takes effect immediately.

Testimony For: Several years after the enactment of the GMA, the taxing structure is still based on land use prior to the GMA. Budgets at the county level are particularly tight, with up to three-quarters of county budgets being devoted to criminal justice.

Since the enactment of the GMA in 1990, the fiscal condition of cities, towns, and counties has changed markedly. Approximately one-third of our cities lost substantial funding because of the passage of the repeal of vehicle excise tax and the impact of Initiative 747.

The interdependence of the fiscal well-being of governments and land use decisions should not be minimized. Often jurisdictions may be encouraged to make particular decisions because of their fiscal implications and the ability of governments to sustain services to their residents and to businesses served within the jurisdiction. These decisions may be contrary to the intent of the GMA.

Studying how fiscal implications have affected local government land use decisions is vital. However, while previous studies have recognized that local governments lack the fiscal wherewithal to serve the interests that the Legislature has determined should be the responsibility of local governments, there has been a political unwillingness to accept that there should be a realignment of capacity and to recognize that costs are increasing.

There is an impact on counties when cities annex industrial and commerical areas without annexing residential areas, particularly low-income areas, because the residential areas don't provide enough of a tax base to defray the cities' costs. In addition, counties may be hesitant to improve roads in urban growth areas that are adjacent to cities because of the expense and the likelihood that such areas will probably ultimately transition to city use. The other side of this problem is that cities complain that those areas adjacent to cities have inadequate infrastructure.

(Presented on HB 3068) It is necessary to study the obstacles to annexation. The way that local governments approach annexation issues affects how communities provide and pay for services to residents. Islands of unincorporated territory have become financially burdensome to counties.

Persons Testifying: Representative Romero, Prime Sponsor; Scott Merriman, Association of Washington Counties; Stan Finkelstein, Association of Washington Cities; Leonard Bauer, Department of Community, Trade and Economic Development; and Genesee Adkins, 1000 Friends of Washington.