Cities Call Property Law Real Budget Breaker Some Mayors Pin Hopes On Referendum 48, Which Would Repeal Cost-Shifting Measure

When Wenatchee Mayor Earl Tilly thinks about Initiative 164, the back end of a bovine comes to mind.

“It’s like a big cow coming in a room and going plop and it just splatters around,” Tilly said, taking stock of Washington’s new property rights law.

Voters will have their chance to keep or dump I-164 on Nov. 7, when they vote on Referendum 48. A vote to reject the law repeals it, while a vote to approve it will allow I-164 to go into effect Dec. 8.

The Legislature passed I-164 last session, promising it would reduce bureaucracy and cut taxes by encouraging fewer regulations.

But some local governments, which enforce many rules the law likely will cover, are worried about costs they believe the law would impose.

Tilly estimates it will cost 10 percent of his town’s $11 million annual budget to comply with I-164.

Ken Dolbeare, an economist who helped prepare a study of I-164 for the University of Washington, said Spokane’s annual costs could conservatively be estimated at about $10 million.

Supporters of the law call concerns about its costs “scare tactics.”

“It seems to me they are exaggerating,” Rep. Jean Silver, R-Spokane, said of I-164 critics. Silver, like every other GOP member of the Spokane-area delegation, voted for the law.

“You have to look at who’s doing the estimates,” said Patrick Batts of the State Farm Bureau, which is backing Referendum 48.

Tom McCabe of the Building Industry Association, a major contributor to both I-164 and the referendum, also dismissed the cost concerns.

“Most people are irritated by that,” he said.

“They just see a bunch of bureaucrats trying to protect the way they are used to doing business.”

Under the law, taxpayers must compensate property owners for regulations adopted for public benefit, such as buffer zones, that reduce property value by any amount.

It also shifts costs now borne by property owners, developers and businesses to governments.

McCabe said the law would help out home buyers, noting that regulations, taxes and fees now add 25 percent to the cost of a home.

“Local governments are going to have to assess these regulations and determine if they still want them, because if they do it will cost them money,” he said.

City officials say they are guessing as to the initiative’s actual impact because it is vaguely worded and is widely expected to be interpreted by the courts.

Still, many Washington cities figuring their budgets for next year estimate some unavoidable costs.

Taxpayers under the law will have to pay for all maps, plans and studies that developers and businesses now cover when developing their property.

Cities and towns expect to have to generate a comprehensive economic impact analysis every time a property owner seeks a building permit, zoning change or other use of their property.

Most cities also predict mounting legal costs in dealing with the law.

The measure is the most drastic of its kind anywhere in the country, and has put Washington way out in front of a national property rights movement that wants to reduce the size and cost of government.

Although supporters say local governments can avoid costs by scaling back regulation, many land use restrictions they enforce are required by state and federal law.

Such laws include the state Growth Management Act and shoreline and wetland protections that are required by federal environmental standards.

“Cities can’t get away from a lot of the costs even if they want to,” Dolbeare said.

“This takes a swipe at local government and doesn’t even solve the problem of overregulation. Most of our regulations are from state or federal mandates,” said Wenatchee planning director Bob Hughes.

“It’s like killing the postman when he shows up with your tax form. Even after you shoot him, the IRS is still around.”

Spokane Mayor Jack Geraghty says enforcing the city zoning code could become so expensive the city “may have to get out of the zoning business.

“The buzzword around here is, how big a 7-Eleven do you want next door to you?” he said.

Mayor Tilly, a former farm equipment dealer, GOP state representative and Reagan appointee, said he often wonders what state legislative leaders - many of them from Wenatchee - were thinking when they passed I-164.

“This thing would be devastating to our city. It’s probably the worst piece of public policy ever to come down the pike.”

In Bellevue, a pro-business bastion of conservatives, local officials predict the measure will cost taxpayers up to $10 million a year in new paperwork and bureaucracy, said Karen Reed, head of intergovernmental relations for the city.

That’s more than double Bellevue’s entire budget for all health, housing and human services programs.

In Tacoma, the measure will cost taxpayers $3.5 million if they want to continue to enforce existing zoning laws, said Randy Lewis, government relations officer for the city.

That’s enough to put 58 police patrol officers or firefighters on the street, three times the city’s budget for seniors’ programs, and double Tacoma’s budget for social services, Lewis said.

Everett officials estimate I-164 will cost taxpayers nearly $1 million every year in studies and paperwork, not counting legal fees, said Doug Levy, government affairs director of the city.

“That’s a lot of police officers and park programs.”

Levy agreed government needs to streamline regulations. “But this will have the opposite effect.”

In Mukilteo, town officials considered everything from abolishing their zoning code except for basic health and safety regulations, to continuing business as usual if I-164 goes into effect.

City staff estimated it would cost $1 million to $2 million just to administer the new law, but they could afford to set aside only $90,000 in the budget for the coming year to deal with I-164’s costs, said city administrator Rich Leahy.

Spokane Planning Director Charlie Dotson and others predicted building permit and subdivision reviews will get slower, not faster, under I-164.

“Things that we can issue over the counter today will take weeks,” Dotson said.

“Our development process will come to a screeching halt. Things will get balled up in red tape.”

Tim Boyd of the Washington Forest Protection Association, the state’s biggest timber lobby and an I-164 supporter, said the property rights law wouldn’t undo rules already on the books.

But it would force regulators to take a hard look at any new regulations, he said.

“When they look at the cost, they may also look at alternatives, including incentives, and trusting us to be good stewards.”

, DataTimes MEMO: This sidebar appeared with the story: QUESTIONS AND ANSWERS Here are some questions and answers about Referendum 48. Question. What’s the difference between Initiative 164 and Referendum 48? Answer. The Legislature passed I-164 during the 1995 session. Opponents gathered signatures needed to put it to citizens for a popular vote Nov. 7, as Referendum 48. The ballot will ask: “Should this law be approved or rejected?” Question. Does a vote to reject Referendum 48 repeal or retain I-164? Answer. Mark “rejected” and I-164 is repealed. Mark “approved” and the law goes into effect Dec. 8. Question. If Referendum 48 is approved by voters, can the law be amended like any other piece of legislation to fix problems that may come up? Answer. No. By state Constitution, a two-thirds vote of both houses is required for two years to make any change. Because these are the same lawmakers who passed the initiative in the first place, it is regarded as unlikely they would change it. Question. Who supports Referendum 48? Answer. Most of the money to get I-164 through the Legislature and to approve it at referendum has come from building, timber, and agricultural interests. Question. Who opposes it? Answer. Most of the large contributions to fight the referendum have come from state and national environmental groups, labor groups, philanthropists, and historic preservation organizations. Question. Where can I get more information? Answer. The No on 48 campaign can be reached in Seattle at 206-223-3728. Citizens for Property Rights can be reached in Olympia at 360-956-1424. - Lynda V. Mapes