A Taxing Charade

COUNTY OFFICIALS in King County, Wash., have a problem. They need money. Specifically, they need cash for homeless, domestic violence and housing programs, as well as other social services. This is not an unusual problem these days for elected officials. The recession has lowered tax receipts, which has forced many local governments to cut back on services or to raise taxes.

King County chose, however, another way to raise money. It wants to use Enron-style accounting by finding a new “fixed cost” and then raising fees to cover the cost. That way the county would have more money to play with while denying that it raised taxes. A neat deal if you can get away with it.

According to articles in two Seattle newspapers, The Times and the Post-Intelligencer, the county's scheme is to raise money for social services by charging itself a $7 million per year rental fee for the use of its landfill. Now I realize that good budgeting principles would include a reasonable internal cost allocation for renting a piece of county-owned property. But accounting charges should be based on real costs, such as the price paid when the property was bought, not on fake costs, such as how much money you need to plug a hole in the social services budget. Because the county received the land from the state for free more than a decade ago and the current tip fee reflects the cost of operating the landfill, a reasonable rental fee should be zero.

Another option would be for the county to charge itself the yearly rent it paid the state when it first leased the property. That would be $460 per year. Adjusted for inflation and cost of living increases, it would perhaps be $600 a year now — but not $7 million.

Understandably, city officials and private sector haulers are not happy with this proposal. They see it for what it is, another attempt to pick their pockets — this time masquerading as new fees, not new taxes. According to The Seattle Times, Kirkland, Wash.'s mayor, who is also chairman of the Suburban Cities Association, called the rent proposal “incredibly bad public policy” that threatens to result in higher household garbage fees.

I think he's being too kind. The proposal is simply a way to raise money off of garbage to fund totally unrelated expenses in another part of the county budget.

In response, the cities and their haulers are threatening to take their trash elsewhere. The county says it can't because the cities signed interlocal agreements pledging their waste stream to the county until 2028. The cities say they want to renegotiate those agreements, probably on the grounds that they naively trusted the county to use the money from their trash to manage the landfill, not to cover budget deficits.

I can sympathize with the county's budget problems. And I have no problem with funding programs for the homeless and the poor. But let's be honest and not create new “costs” to raise money. As a good friend of mine likes to say, “don't use my trash trucks to solve your social problems.”

Opinions in this column do not necessarily reflect the National Solid Wastes Management Association or the Environmental Industry Associations. E-mail the author at: [email protected].

The columnist is state programs director for the Environmental Industry Associations, Washington, D.C.