Monday, June 25, 2007

To Tax or Not to Tax

North Ogden is not simply the north part of Ogden; it is an actual municipality that is separated from Ogden by Harrisville. In the last census it had a population of 15,026, but there has been a lot of growth since then. North Ogden’s home town atmosphere remains intact; although, growth has introduced significant strain.

As with most small communities in Utah, North Ogden started out rural. After WWII, the city began its transition to suburbia. Since that time there has been a deliberate effort to maintain a mostly suburban residential atmosphere and to minimize business impact. The city’s businesses are mostly oriented toward citizens as consumers rather than toward citizens as workers. Few of the city’s residents work in the city.

Less business = lower sales tax revenue = higher property taxes. In fact, North Ogden’s property tax rate is the highest rate in Weber County and is among the highest rates in Utah. Although business has expanded over the past decade as city officials have actively courted certain types of businesses, the sales tax base remains low and property taxes remain high.

Although I am a native of Colorado, North Ogden has been my home for most of my life. My family has always placed a relatively high value on swimming and related water recreation. My dad enjoyed swimming while growing up northwest Germany. When I was a kid, North Ogden had a municipal swimming pool that was about a mile from our house. It was an outdoor pool adjacent to one of the city’s elementary schools. Each summer we acquired a season pass for the family. My brothers and I took swimming lessons and spent countless hours at the pool throughout the summer. We’d walk down there to swim almost daily.

A few years ago, it became clear that the municipal pool was in sore need of substantial repair and/or upgrade. A couple of other northern Utah towns built new water recreation pools that offered far more activities than simply swimming. Forward looking residents pushed for North Ogden to do something similar. But water recreation facilities are expensive to build and maintain. Town officials said that the recreation budget simply couldn’t be stretched that far, so a bond was suggested. Many residents wanted a new pool, but a strong majority did not want to bond for it, so the bond failed.

The next season, the municipal pool developed a leak so bad (thousands of gallons of water daily) that it ended up being infeasible to repair. Town officials found that enough one-time funds could be obtained through a government grant that, combined with budgetary juggling, permitted the city to build the new swimming facility. Some of the strongest opponents of the failed bond were very angry about this move. In their minds, the voters had decided against building a new pool, but many voters had simply voted against a bond and not against a pool per se. Still, the city didn’t know how it was going to fund maintenance and operation costs.

The water recreation facility opened halfway through the 2005 season (due to construction delays caused by wet spring weather). In its first full season last year it made more money than anyone had hoped it would. Good management was certainly part of this, but weather patterns and the quality and proximity of competing facilities also played a role.

Almost as soon as the new facility was announced, some residents saw the potential benefit of having the pool enclosed for year-round recreation and for the Weber High Swim Team, which currently has to practice at a high school pool in a neighboring school district. A group of citizens formed a committee that worked to raise sufficient funds from private donations for the enclosure. The proposed glass enclosure would have a convertible roof that could be retracted during good weather.

Despite the group’s valiant efforts, they collected only a small fraction of the funds necessary for the enclosure. So city officials determined that the best answer was to bond $2.5 million for the enclosure. Opponents of the bond are upset that the city has called a special election for tomorrow, June 26 rather than waiting until the general election in November. Off season bond elections tend to have very low turnout. But officials say that it is no more likely that this special election will favor bond proponents than opponents.

If the bond is approved, property taxes on the average North Ogden home will go up about $31 per year for the next 20 years, meaning that the average homeowner will pay about $620 additional property taxes for the pool enclosure over the next 20 years. It is also important to note that the enclosure will only cover the six-lane lap pool, which also has diving boards. The main recreation area, water play gym, water slide, lazy river, splash area, and toddler pool will still be closed three-fourths of the year.

Bond opponents label the bond “the swimming tax,” saying that swimming is a luxury that should be paid for by those that choose to engage in the activity. They assert that swimming pools should actually be provided by private business rather than by government. Most city residents, they contend, will derive no benefit from the pool and will never use the pool. The non-residents that use the pool will not help pay for the cover because they will not be subject to the property tax paid by residents. Opponents ask why voters would want to increase their already very high property tax rate. They question how a six-lane lap pool could possibly generate sufficient revenue in the off season to even cover operation costs, let alone maintenance costs. There is also a question about whether all other funding avenues have been explored.

Proponents say that enclosing the lap pool will help keep kids out of trouble by offering constructive wintertime activities. Residents will be able to engage in water fitness programs year round. They cite the value of Scouts being able to use the pool for developing swimming and life saving skills. And finally the local high school will have a local pool for its swim team.

Although I have never been involved in competitive swimming, I have been a lifelong swimming enthusiast. I have counseled the Swimming and Life Saving merit badges for the past 2½ decades. All of my children have taken swimming lessons, and the younger ones will continue to do so. I want my kids to be good swimmers and to enjoy swimming. I would love to have a local swimming pool available for regular year round use. I will be one of the first to assert that the public has a valid interest in ensuring that people learn how to be safe in the water.

But I am less certain that forcing all of my neighbors to pay increased property taxes to fulfill this desire is appropriate, especially when there are facilities with the same capacities a few miles down the road. We the people are the government. But government implies coercive powers — the power to force our neighbors to do something or refrain from doing something. For that reason, we need to be very careful with what we instruct government to do. We always need to be cognizant of what we are coercing our neighbors to do via government.

I would love to have the proposed cover as part of our city’s swimming facility. But I will be voting against the bond tomorrow.


Anonymous said...

Excellent post.

The survey done supposedly by the North Ogden City Council re this bond issue for the cover was a rigged poll.

Only the persons living North of 3200 North were polled.

I was polled and the first question asked was "Do you live North of 3200 North in North Ogden".

I talked to friends who do not live North of 3200 North and they had never heard of the poll.

Neither had certain North Ogden City Council members I asked if they had authorized the pool which they had not.

Certain elitist members of the North Ogden City Council continue to ignore the wishes of the majority of North Ogden taxpayers in regards to this swimming pool and now the additional cost for a partial cover.

Remember this in the next City election. I will.

Charles D said...

Sounds like your problem is that North Ogden cannot get the additional revenue it needs to perform essential services that its citizens require without increasing a form of tax that its citizens detest.

Most US municipalities are limited to sales tax (usually an additional burden on the state sales tax) and property taxes. Bedroom communities needing extra funds can attempt to draw in large retail stores to up their sales tax revenue, but the additional infrastructure costs of those stores usually outweighs the benefit of the additional revenue.

That leaves the property tax. If this tax goes too high, it will depress property values because people will not want to buy homes there. In addition, high property taxes can force citizens with limited incomes out of homes they have lived in for decades.

The only tax that makes sense here is a progressive income tax levied by the state with revenues passed back to the counties and municipalities in sufficient amounts to cover essential services and maintenance of infrastructure.

I'm sorry your town won't get a new pool, but 59 cents a week is far too much to pay to give today's North Ogden children the recreational facilities you had in your youth.

Scott Hinrichs said...

Actually, many North Ogden citizens debate whether a swimming pool is an 'essential' government service, (especially given that other pools are available nearby). We have a fair number of small government types in our community, but not nearly as many as some in that group imagine.

A few years back, a libertarian minded group was able to get a proposition on the ballot to do away with zoning in the city under the idea that zoning 'unconstitutionally' infringes on a property owner's right to use legally owned property as the owner sees best. After patting themselves on the back for the effort of getting enough legal signatures, the measure went down to a stinging 73%-27% defeat. Many that are all for small government, but are not ready to go that far.

The legislature has discussed a progressive allocation scheme, but the idea doesn't get very far. The argument is that each community is free to seek to attract whatever type of business it deems appropriate. Although neighboring communities have brought in manufacturing, for example, North Ogden has worked to keep such businesses out in the interest of a higher quality of living. Why should communities that actually deal with the issues involved in having manufacturing within their borders subsidize the pristine lifestyle of North Ogden residents?

People are free to choose the community in which they will reside. High property taxes and the types of government services available go into that decision. Those willing to accept the situation in North Ogden are free to move there. Those that don't like it are free to look elsewhere. Of course, people are also free to seek changes in the communities in which they live. That is what is happening with the bond election tomorrow. I have no sense of how it will turn out, so I will have to wait until Wednesday morning to see the results.

Charles D said...

There are essential services and non-essential services, that I will grant you. No matter what town you live in, you should have essential services: decent roads, police and fire services, health care, public education, etc., even if you don't have the sales/property tax base to pay for those services.

Certainly we have the right to choose our place of residence based on the quality of life it provides, or whatever other criteria we choose. Unfortunately some people do not really have that choice, due to family obligations, inadequate income, or other problems. That should not mean that they lack essential services because they are stuck in a town with an eroded tax base.