Fiscal Impacts of Growth in Skagit County

ECONorthwest analyzed the fiscal impacts of four alternative growth scenarios in Skagit County, Washington.

The Challenge

Skagit County, Washington is evaluating possible patterns and policies for projected population and employment growth. The evaluation will include impacts to sensitive lands, vehicle-miles traveled, water quality, and a host of other factors that could be affected by the county’s future population growth. The project has used the Envision model to develop four alternative futures (also called growth scenarios) that might result from various policy choices.

As part of its evaluation, the County asked ECONorthwest to help clarify the fiscal implications of each growth scenario, and how each policy choice might affect costs and revenues for the County and its partners as growth occurs.

The Results

The four growth scenarios assume the same amount and rate of population growth, but vary by location and density of growth based on their unique policy objectives.

ECONorthwest found the differences in fiscal impacts for local jurisdictions between the growth scenarios were relatively small. Our analysis concluded that the issues that will matter most to the future fiscal health of the county and its municipalities will change only slightly with future growth in population density. This is true for a variety of reasons:

The scenarios were fairly similar;
Many of the scenario-based capital costs are covered by revenue sources that scale appropriately;
Potential funding shortfalls in personnel and operating costs would occur equally in all of the scenarios; and
In all scenarios, the state-wide one percent cap on property taxes leads to greater pressure on sales tax and other revenue sources to cover increased costs.

ECONorthwest concluded that taxation policy and external economic factors will have a much greater impact on fiscal issues in Skagit County than the range of growth management policies considered in the Envision analysis.