Growth along Bethel can benefit all of SK

Annexing the Bethel Avenue commercial area into the city of Port Orchard may benefit all South Kitsap residents, if the eventual result is greater business development.

Annexing the Bethel Avenue commercial area into the city of Port Orchard may benefit all South Kitsap residents, if the eventual result is greater business development.

Now that a sufficient number of property owners have signed the petition, the process may be concluded within the next few months.

Accomplishing the needed roadway and infrastructure improvements along the Bethel corridor may take a long time, but now there is more certainty that it will be done.

The county may never have committed the resources needed to make the improvements, knowing that subsequent annexation into the city would transfer much of the area’s tax revenue to the city.

While it is true that South Kitsap residents who live outside the city limits may feel the impact of transferring tax revenue from the county to the city, they may nevertheless have a net gain.

Our tax base for the school district and fire district would increase if the Bethel corridor becomes more of a business center than it is already.

Higher commercial property values would take some of the property tax burden for schools and fire protection off the shoulders of homeowners.

When businesses build in nearby areas such as Gig Harbor, we get none of this tax benefit.

And, when gasoline prices rise, having a business center closer to home that meets most of our needs will be appreciated.

All this depends on one thing Port Orchard officials can control and another that the market controls.

If the City Council follows through on the stated intent to put much of the tax revenue into infrastructure improvements, the city can make the Bethel corridor more inviting to businesses.

Once the invitation is extended, we can only hope that market conditions enable businesses to take advantage of the improvements.

Politicians may talk a lot about creating jobs, but usually all they can do is make it more likely that private investors will build where publicly funded improvements make it feasible.

Current City Council members and their successors in office probably will follow through, since the city’s coffers would benefit from commercial development of the corridor.

Unlike the county, the city needn’t worry about investing public funds in the area and then seeing much of the tax revenue taken by another jurisdiction.

For those of us living outside the city who frequent the Bethel corridor already, the transfer of tax revenue might seem like a bad idea.

We depend on county government for basic services such as law enforcement, and those services are funded by county tax revenues.

Also, removing the Bethel corridor property from the county road fund levy’s tax base will raise our county road tax a little.

It’s not as though the county loses all tax revenue because of a city’s annexation, but the effect might be noticeable.

The county collects its current expense fund levy on property within cities, and it receives the benefit of about one-fourth of the local sales tax revenue collected in cities (not counting Kitsap Transit’s portion).

The county’s road fund levy is not imposed on property within cities, so annexations shift the burden to taxpayers who remain in unincorporated areas rather than reducing the county’s levy revenue.

Until the road fund levy reaches its maximum tax rate — which won’t happen soon — annexations have no long-term effect on county property tax revenue.

In an ideal world, annexations would result in a transfer of tax revenues to cities in proportion to the number of residents taken into the city.

Then the impact on unincorporated areas would hardly be noticeable, since the county’s revenue would remain equal to the cost of serving its residents at current levels. In the real world, there can be imbalances that do impact the unincorporated areas.

Given a choice between having the Bethel corridor languish and risking a reduction in county services, the possible reduction seems preferable.


Bob Meadows is a Port Orchard resident