You Want Me to Pay for What?

Transcription

1 Using Tax Revenue to Measure the Benefits You Want Me to Pay for What? of Publicly-Funded Shore Protection Projects

2 Program for the Study of Developed Shorelines (PSDS): Applied, interdisciplinary academic research center that promotes responsible, equitable and sciencebased coastal environmental management strategies. Established in 1985 at Duke University Moved to WCU in 2006

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4 NPS Coastal Program

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9 POST-STORM PERCEPTION

10 POST-STORM REALITY ISABEL FLOYD IRENE FRAN KATRINA

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17 Beach Nourishment

18 Beach Nourishment Issues: Temporary and unpredictable Habitat degradation Availability of beach compatible sand Inequitable distribution of costs & benefits Opportunity costs Expensive!

19 Since ,100 episodes 1,400,000,000 yds 3 117,000,000 dump trucks (12 cy) 439,560 Olympic-sized swimming pools (3,185 cy) 364 Dallas Cowboys Stadiums (3,851,851cy) $6,200,000,000 (2012 dollars) Source: beachnourishment.psds-wcu.org

20 1960 Total 1961 Total 1962 Total 1963 Total 1964 Total 1965 Total 1966 Total 1967 Total 1968 Total 1969 Total 1970 Total 1971 Total 1972 Total 1973 Total 1974 Total 1975 Total 1976 Total 1977 Total 1978 Total 1979 Total 1980 Total 1981 Total 1982 Total 1983 Total 1984 Total 1985 Total 1986 Total 1987 Total 1988 Total 1989 Total 1990 Total 1991 Total 1992 Total 1993 Total 1994 Total 1995 Total 1996 Total 1997 Total 1998 Total 1999 Total 2000 Total 2001 Total 2002 Total 2003 Total 2004 Total 2005 Total 2006 Total 2007 Total 2008 Total 2009 Total 2010 Total 2011 Total 2012 Total 2013 Total $501,000,000 $451,000,000 $401,000,000 ANNUAL NOURISHMENT EXPENDITURES $150 million to NJ $351,000,000 $301,000,000 $251,000,000 $201,000,000 $151,000,000 $101,000,000 $51,000,000 $1,000,000

21 AFTER SANDY: $3-5 Billion Public Law th Congress

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24 Why?

25 The amount of property vulnerable to/damaged by coastal processes is ALWAYS presented in terms of Market Value, Assessed Value or Replacement Value (minus depreciation)

26 This gives the (mis)perception that: 1. More development is at-risk (than really is) 2. More municipal/county tax base and ad valorem tax revenue will be lost (than really will be) 3. Occupancy and sales tax revenue from tourism will be lost (which it won t) 4. The benefits of protecting at-risk private development is worth the cost (which it isn t)

27 representatives who are from inland areas of the country don t understand the importance of beach renourishment, but we know if you spend a few hundred thousand dollars on the front side, you will save millions and millions on the back side after a hurricane or a storm. I don t know of any other federal program that gives you a 320:1 ratio of return on investment. In other words, for every $1 spent on beach renourishment, it generates $320 in revenue. I have yet to find or hear of any other federal program that gives that kind of return. -- Mike McIntyre, Lumina News, April 24, 2014

28 Using market/assessed/ replacement value is great for property owners, politicians and coastal engineering firms, but NOT for the public or coastal ecosystems. Instead

29 The expenditure of public funds to protect vulnerable private coastal development should be based on the fiscal benefits that result from protection.

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38 Properties at-risk over the next 30 years: 85 Total Assessed Value: $25,069,000 ($294,929/property) Generate $96,516/yr in property tax revenue (local and county) Properties imminently threatened : 24 Total Assessed Value: $2,569,000 ($107,042/property) Generate $9,891/yr in property tax revenue (local and county)

39 At-Risk NPV Cost Properties: of Terminal Groin*: 85 $54,900, Total Assessed Value: $25,069,000 $2,569,000 Tax Increase to Pay for Terminal Groin: $123/Year % NPV of Revenue OIB Tax Loss Base: Over 30 Years: 0.95% $5,005, % 51 /Year % of Brunswick Tax Increase County to Replace Tax Base: Lost Tax Revenue: 0.08% 0.008% Total Annual Revenue Loss: $122,191 $12,522 *Using a 3% discount rate and price appreciation rate of 5% NPV Revenue Loss Over 30 Years*: $5,005,080 $512,906 *Using a 3% discount rate and price appreciation rate of 5%

40 FINDINGS: The fiscal impact of losing a coastal property in NC is about 0.6% of the property s value. The average annual fiscal impact, in terms of property tax revenue, of losing a $1 million coastal property in NC is $6,014. 1,983 residential coastal properties are considered at-risk to shifting inlets in NC. These properties represent about 9% of all municipal and county ad valorem tax revenue collected coast-wide. Of the 1,983 coastal properties at risk to shifting inlets, 204 (10.3%) are classified as being in imminent risk. These properties represent about 0.08% of all municipal and county ad valorem tax revenue.

41 CONCLUSIONS: Property value is not an accurate metric for quantifying the impacts of chronic erosion and coastal storms and should not be used to justify the expenditure of public funds for erosion control/shore protection measures. An analysis of revenue impacts to coastal municipalities, counties, the state and nation is a better methodology by which to evaluate the costs and potential public benefits of protecting vulnerable private coastal property.