Examples of Local Park Funding

Local Open Space Trust Funds Catch On in New Jersey

New Jersey state legislators responded to the problem of dwindling farmland and open space by passing Open Space Trust Fund enabling legislation. This legislation gives counties and municpalities the ability to impose a property tax to fund open space acquisition, farmland protection, and recreation. Monies raised by the levies are deposited into Open Space, Farmland, Recreation and Historic Preservation Trust Funds.

With the measure's success, legislators went one step further, passing a February 1997 bill that allows for funds to be used for maintenance and improvement of existing lands as well as acquisition of open space. In November 1997, voters in 23 more communities approved conservation trust funds. One of these communities was Ocean County, home to a large number of senior citizens. Here voters agreed to raise up to 1.2 cents per $100 of total real property valuation, or $12 for a $100,000 home. Tax revenues will be used for protection of the Barnegat Bay watershed, natural areas, farmlands, and tributaries. In all, 52 municipalities and 13 counties have created property tax-backed Open Space Trust Funds, with more exploring the option.

Missouri Law Helps Lee's Summit Save Parks

The Deer Valley Park in Lee's Summit, Missouri illustrates the value of special taxing districts to local parks. The establishment of the park began in 1992 when a group of residents, concerned about the development of a nearby vacant lot, approached the city's Park Board for help. Although the developer was convinced to donate the property to the city, the Park Board lacked the resources to improve and maintain the site. The Park Board and local residents decided to take advantage of a new state law, the 1992 Neighborhood Improvement District Act, which gives communities the ability to create special taxing districts for public works improvements, including parks. The Missouri law requires the support of 75 percent of the area's property owners and 66.6 percent of lot owners. Costs of a project cannot exceed its budget by more than 25 percent.

Working together, the Park Board and residents won their campaign for a special park district with 85 percent voter approval, making Lee's Summit the first community to take advantage of the new Missouri law. The measure called for an assessment against residential property in the community for a period of ten years with all revenues directed to capital improvements for the park. Once funding was secured, a neighborhood committee worked with the Park District on all park planning and development.9

Special District Used to Protect Water Quality and Conserve Land

Special districts can take many forms and serve many park and land conservation purposes. In New Haven, Connecticut, a regional water authority was formed to protect the water supply and manage watershed lands to meet the natural and recreational needs of both inner-city and suburban residents. Here's how.

The South Central Connecticut Regional Water Authority (SCCRWA) was created in 1977 with the passage of state legislation. The impetus for its creation, however, began in 1974 when the New Haven Water Company tried to sell more than 60 percent of its 26,000 acres of land. Public outcry over the potential loss of land to development led to a temporary moratorium on water company land sales imposed by the state legislature. As local communities voiced support for control of the company and its surrounding lands, the SCCRWA was created and regional authority was granted.

Today, the SCCRWA is charged with protecting water quality, conserving lands, and promoting recreation.10

Visitors Can Help Montana Communities Pay for Parks

Since 1985, visitors to Montana have helped some communities pay for parks and open space through a local-option resort tax. The state legislation allows designated resort communities, small communities with large numbers of tourists, to tax visitors for traveler-related infrastructure and services, including parks and recreational services.

In order to exercise this option, communities must satisfy several requirements. First, a community's population must be under 5,500 if the area is incorporated, 2,500 if it's unincorporated. In addition, the community must derive substantial economic benefit from the travelers. The measure also requires at least 5 percent of the revenues to be used for property tax relief; local communities retain flexibility with other service expenditures. Once a community's resort status is approved by the Department of Commerce, voter approval must be won. The measure allows designated communities to levy a sales tax of up to 3 percent on tourist-related goods and services such as restaurants, lodging, entertainment, and recreation.

More and more communities are turning to this tax as the number and impact of visitors increase. Montana voters have twice defeated a statewide sales tax but seem more willing to approve this local option. Voters in Whitefish, for example, recently approved the tax and will dedicate 5 percent of the $800,000 in first year revenues to a bike path.

Still, the parks purse remains relatively small. "Parks have received the short shrift," says Gallatin County Commissioner Bill Murdoch. "I think we'll see more resort tax revenues spent on open space and easements in the future. But these communities have big ticket needs."13

Albuquerque Voters Pass Sales Tax for Parks --First Win in 20 Years

"City officials hoping open-space proposal can beat the ballot bond jinx," read a December 1996 headline in the Albuquerque Journal. That "jinx" had resulted in the defeat of every proposed sales tax increase put before voters in the last two decades, including a measure for more police and street repairs. But in December 1996 and January 1997, voters broke the losing streak and approved a quarter-cent, two-year sales tax for parks and open space. The Parks and Open Space Initiative was passed 60 percent to 40 percent.

Prior to the election, the city had unused taxing power authorized by the state legislature worth about $77 million a year. The state allows cities and counties to impose local option gross receipts taxes in specific increments. Disbursement of some of the receipts are dedicated by statute, while other portions are left to the county or municipality to expend as the governing body sees fit. The City of Albuquerque had the option of imposing, without voter approval, three new quarter-cent and two sixteenth-cent sales taxes. Mayor Martin Chavez, however, had pledged no new taxes without voter approval, and the measure headed for the ballot.

With voter approval, funding has been made available for the improvement of 25 existing parks and the acquisition of more than 9,600 acres of park and open space lands, bringing the city and county closer to its goal of 40,000 acres of land for public use. Many of the parks had been left undeveloped or partially constructed due to lack of funds.

If the passage of the initiative was noteworthy, so was the election process. The vote-by-mail special election, the first of its kind in the City of Albuquerque, was held between December 28, 1996 and January 14, 1997. Thirty-four percent of the voters participated in the election, several times the average turnout for typical special elections held at polling places.

Carson City Given Authority to Impose Park and Open Space Tax

In the State of Nevada, Carson City has a one-of-a-kind sales tax that's raising $1.5 million for parks and open space. What makes this tax so unique is that only Carson City has been given this authority by the state legislature -- a move designed to address the city's atypical geographic, political, and demographic challenges.

The process began in November 1996 with the passage of the Quality of Life Initiative by Carson City voters. This advisory measure requested that the state legislature authorize the development and maintenance of parks, open space, trails, and recreational facilities through an increase in the sales tax rate of 1/4 of 1 percent.

The state legislature then took up AB 237. According to this measure, Carson City is unique in its organization as a consolidated municipality and as the seat of government of the state. Special conditions within the city called for the need to protect parks, open space, trails, and recreational facilities. The measure was signed into law in April 1997.

Revenue generated by this sales tax are kept separate from the city's general fund. Acquisition and conservation decisions are guided by a citizens committee that's appointed by the Board of Supervisors. Members have expertise in the areas of real estate, community planning, outdoor recreation/education, or strong knowledge of the community.

California Community Develops Innovative Impact Fee Program

One of the first states to pass impact fee legislation, California has given local governments broad authority to impose the fees. In fact, their use by California communities even predates the 1987 enabling law. Backed up by the courts, communities imposed the fees on their own. The state legislature then moved to codify impact fee requirements for both charter and general law cities, and included parks and recreational facilities among the list of community improvements.

The rapidly-growing California city of Lancaster, near Los Angeles, provides an interesting case in the application of impact fee authority and the ability of the fees to steer growth and build healthy communities. Besieged by new growth in the far-reaches of the city, Lancaster was struggling to pay for new parks, roads, and other needed infrastructure. Costs for services like park acquisition and maintenance, water, and streets would increase as distance from the urban core increased, yet the fee structure was uniform.

In response, the city developed the Urban Structure Program (USP). This USP is essentially a distance surcharge that's incorporated into the calculation of development impact fees. This sliding scale system creates economic incentives for developers to locate projects within the city's urban core and provides for "facilities" fees to help fund park land acquisition and development. As a result, the number of new development proposals located far from the city's core has dropped significantly and the money needed to pay for parks, streets, and other infrastructure associated with new development has been made available.21

New Mexico Counties Given New Borrowing Power

In 1996, voters in the State of New Mexico expanded the authority of counties to borrow money by issuance of general obligation bonds for the acquisition of open space, trails, and related facilities, as well as libraries, public buildings, airports, roads, and bridges. Only about 1,000 votes made the winning difference, but it was enough to pass New Mexico's Amendment 7 on the November 5th, 1996 ballot. Prior to its passage, counties had to purchase open space out of their operating budgets or obtain money from the legislature. New general obligation bonds now require approval of the voters in the county.

Twice before, New Mexico voters had rejected similar measures, most recently in 1994 by a slim 52 to 48 percent margin. This time around, the measure was spurred by the need to protect open space in Bernallilo County, the fastest growing county in the state. With undeveloped land quickly disappearing, voters said "yes" and counties now have the option, with the approval of county residents, of borrowing money for land while it still exists and is still affordable.

Local Option Income Tax Funds Ohio Parks

In the small town of Fostoria, south of Toledo, voters have exercised Ohio's local-option income tax to the benefit of parks and recreational facilities. The first half-percent of the levy was approved in the 1980s and is used for parks, library funding, and beautification. In 1997, Fostoria voters approved a second half-percent tax that earmarks $180,000 out of $1 million for park improvements and maintenance. Legally, any dedication of revenues beyond the 1 percent must be specifically noted on the ballot and the council-approved legislation, and any changes in the allocation of revenues must be sent back to the voters for approval.

It is possible that other communities could consider exercising the local income taxing option for parks and recreation. One reason is that the income tax is more palatable to older voters than the property tax. In addition, once voter approval is given, the tax does not have to be re-approved like the special district property tax assessment. Interestingly, Ohio cities also have the option of taxing the incomes of suburban residents who work in the city. If the suburban community approves its own income tax equal to or greater than the income tax in the place of employment, however, the tax is shared. This gives the suburban community the ability to promote the new tax as a no-cost way for communities to pay for recreational improvements.26

Florida at the Forefront of Mitigation Land Banking

The State of Florida has been a leader in the use of mitigation land banking to protect and restore wetlands and natural areas. Recognizing that mitigation banks can minimize uncertainty and protect ecological benefits, the legislature has "encouraged the establishment of private and public regional mitigation areas and mitigation banks." Regional water-management districts and the state Department of Environmental Protection were directed, by state statute, to adopt rules governing the use of mitigation banks, including a framework for determining land value and procedures for establishing governmental, nonprofit, and for-profit mitigation banks.

Mitigation land banking proved a success in Osceola County, Florida where the Osceola Land Trust, the state, and the Osceola School Board worked together to save threatened private lands near the school board's environmental education center on Reedy Creek. First, the Osceola Land Trust took out a three-year option on the 200-acre tract of forested wetlands and uplands near the center. Their efforts were aided by the state, who directed violators in the central Florida area to the land trust rather than have them mitigate on-site. By having the developers purchase conservation easements on the trust's optioned land, the property was protected and the land was conveyed to the county school board for management.29

Tax Increment Financing Helps Build Michigan Park

In the Spring of 1996, Sculpture Park in Grand Rapids, Michigan was opened to the public. Although a variety of public and private sources contribute to the park's $1.45 million budget, tax increment financing is a uniquely important source.

The park is part of a 3-block, 92-acre downtown district that has been created to help revitalize the city's riverfront area. It's one of five downtown districts in which tax increment revenues are pooled. Supporters contend that since the park is on city-owned, tax-exempt land, green spaces, pedestrian paths, and riverfront access indirectly add value to nearby property. Although some businesspeople were initially skeptical, redevelopment projects, including the park, have helped attract new restaurants and increase property values.32




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