Writing on this page last month, Clarkston Mayor Monika Lawrence raised a question about the Asotin County commissioners’ desire to place the new county jail within her community:
“Clarkston has the majority of tax-exempt properties within its city limits: schools, churches, government facilities and a large hospital complex,” Lawrence noted in her June 22 commentary. So why take another 6.4 acres at the site near 14th Street and Port Drive off the tax rolls for a county jail?
Regardless of the merits of this site — which the city has rejected — or those of the Sixth Avenue option near the Asotin County Regional Landfill, it’s hard to argue with the mayor on this point: Slightly more than 1 of every 4 acres within her city is tax-exempt.
That’s due to combination of factors. As the county’s hub, Clarkston has attracted the bulk of the region’s local, state and federal government entities, as well as the area’s nonprofits.
Yet the city is a mere 2 square miles — about 1,280 acres — and state law discourages it from branching out through annexation.
Here’s how 334.6 acres of tax exempt land breaks down:
l U.S Army Corps of Engineers — 94.5 acres.
l Port of Clarkston — 78 acres.
l Nonprofits, including more than a dozen churches and Valley Community Center — 60 acres.
l Clarkston School District — 44.4 acres.
l City of Clarkston, including parks, city hall, police and fire departments, an animal shelter and the sewage treatment plant — 22.7 acres.
l State of Washington/Walla Walla Community College — 19 acres.
l Asotin County, including the library, public housing, public transit and the county jail — 16.9 acres.
l Tri-State Memorial Hospital — 14.37 acres.
Put another way, about $34.5 million worth of property is off the tax rolls — roughly 7 percent of the community’s $502.8 million tax base.
From that, the city generates about $1.1 million in property taxes, although it’s been reduced by $81,000 to cover an installment on the reimbursement of property taxes due to Tri-State Memorial.
Due to its status as a retail center, Clarkston relies on sales tax revenues more than property taxes. The city can expect to collect about $2 million a year.
But it’s a two-edged sword: Sales taxes depend on the increasingly volatile retail sector — and city officials contend the demands of big-box stores coupled with traffic that swells the small city’s population put pressure on the city’s limited property tax revenues.
Granted, the 6.4 acres at 14th Street and Port Drive is undeveloped, so it’s not a big part of the property tax base.
Who would miss it?
There is such a thing as opportunity cost — the idea of losing potential benefits. Think of an investor who leaves his money parked in a low-interest savings account rather than investing in a booming stock market.
If a 6.4-acre lot remains off the tax rolls rather than acquired by a private developer who builds improvements on it, that’s an opportunity cost for the city.
Say a big-box store could be located there: Losing another Costco would cost the city about $28,500 in potential taxes — nearly a 3 percent gain in tax revenues.
Forgoing the chance to build another Best Western hotel complex on that land would translate into a $13,600 loss in potential taxes one day.
How about something more modest?
Forfeiting another Lancer Lanes and Casino at that site would lose the city about $4,700.
Likewise, should someone build another manufacturing plant on that land — such as Thunder Jet — the city would pick up another $6,700 in tax revenue.
Presumably, a city with a much larger geographic footprint would not be so sensitive.
Getting sore about properties exiting the tax base is not exclusive to small entities, however.
Asotin County consists of 636 square miles. But when the Nez Perce Tribe brought up the idea of converting the Clarkston Golf and Country Club to tribal trust land more than two years ago, county commissioners winced at the idea of losing $14,000 in tax revenues.
“We just want to know when does it stop?” Commissioner Brian Shinn asked at the time. “If the tribe keeps buying land and taking it off the tax rolls, where does that end?”
The word for that is called irony. — M.T.