The contrast is clear, representing the difference between leadership and demagoguery. Between guidance and chaos. Between thoughtfulness and disillusionment. So, as members of the Vancouver City Council approve fee discounts for large employers that pay high wages, they provide a lesson for the Clark County commissioners in diligent and responsible governance.
Last week, city council members unanimously approved a plan to waive business license surcharge fees and reduce traffic impact fees for companies with 200 or more employees that pay higher-than-median salaries. For example, a business that has at least 200 employees and a median salary at least double the regional median could qualify for a 25 percent reduction in traffic impact fees, up to $100,000. In addition, the waiver of business license fees would be capped at $20,000 annually.
It’s all part of the game that governments play in an effort to lure employers to their area. The philosophy is that increased employment and development will expand the sales tax and property tax base in order to offset the incentives being offered. The state of Washington, for example, last year approved an $8.7 billion, 27-year tax break for Boeing in an effort to keep certain jobs in the state. The fact that the aerospace giant almost immediately began moving other jobs out of Washington points out the lack of diligence employed by legislators in crafting the incentives.
As many jurisdictions have learned over the years, there is a right way and a wrong way to offer inducements to companies. Which brings us to Clark County.
County commissioners, led by David Madore, last year adopted a blanket waiver of traffic-impact fees for nonresidential development. No parameters were established for which companies would benefit; no specifics were established for how many employees a company must have or how much it must pay those employees. So it was no surprise recently when a county audit determined that the program was fiscally irresponsible and unsustainable. County Auditor Greg Kimsey found that $7.8 million in fees had been eschewed since the start of the program — and at least $4.6 million of those were for projects that would have been built even without the fee waivers. Of the 115 jobs created, most were in the low-income food, consumer service or retail sectors — not the kind that will expand the tax base.
Therein lies the contrast. While the county’s fee waivers were developed out of idealism, with no regard for assessing their impact, Vancouver’s plan is measurable, sustainable and thoughtful.
Among the most important provisions is the one that relies upon median income. By choosing the middle income paid by a company to employees in Vancouver, the city avoids giving tax breaks to businesses where the CEO could open his or her own mint while the majority of employees earn minimum wage. Another wise provision is one requiring development agreements with companies so they hold up their end of the bargain. The county’s plan, on the other hand, has been beset by an inability to glean information from businesses in order to assess the effectiveness of the program.
Vancouver’s fee-waiver plan is not related to the county’s, yet comparisons are inevitable. Clark County officials expressed a desire to attract businesses and boost employment in order to expand the tax base, yet demonstrated utterly no acumen for making that happen. They could learn something from Vancouver’s approach.
