Council authorizes 1 percent property tax increase
SNOHOMISH - For the first time since 2009, the City Council approved a 1 percent property tax increase that will be incorporated in the 2014 budget.
The vote was split 4-3, with council members Derrick Burke, Tom Hamilton, Paul Kaftanski, and Mayor Karen Guzak voting for the increase. Council members Lynn Schilaty, Greg Guedel and Dean Randall voted against it.
The increase will cost the average homeowner $2.50 more per year.
“It’s a modest amount,” Guzak said, amounting to less than the price of a latte.
City Manager Larry Bauman has been an advocate for the increase every year. He said he was grateful the council chose to approve the tax this year. Last year, the council voted 4-3 not to take the increase.
“Though it has a minor impact on property owners, over time, as future years go by, it will have a significant impact on the city budget,” Bauman said.
The 1 percent increase will generate about $10,000 for the city, a small amount in terms of the overall general fund, but the city argues the cumulative amount of revenue loss each year the tax increase isn’t authorized is significant.
The city hasn’t authorized a tax increase since 2009, resulting in a cumulative revenue loss of about $104,000 over the years.
A public hearing on the increase was held prior to the vote at last week’s Nov. 5 meeting. Council discussion lasted about 30 minutes.
Guedel said he voted no because he believes the city doesn’t have a “pressing financial need that justifies increasing the property tax.”
“I believe voters should have more input and transparency on property tax assessments and usage than they get from a council-voted tax,” Guedel told the Tribune.
Hamilton said he voted for the increase out of fiscal responsibility to maintain a healthy government.
Hamilton also pointed out that the city will soon be spending money to pay for utility costs for the Snohomish School District’s new aquatic center. That cost, Hamilton said, will exceed the revenue from the property tax increase.
The city agreed to pay the aquatic center’s water bill in 2012. The project encountered financial roadblocks, and in order to help the aquatic center become a reality, the city offered to pitch in.
“As part of that deal, our citizens will be able to get discounts to use the new facility,” Hamilton said.
Kaftanski said it makes him uneasy to have the city rely so heavily upon sales tax as a large source of city revenue. Sales tax revenue is an unstable revenue source, he said in an e-mail last week.
Sales tax revenue accounted for nearly 40 percent of general fund revenue last year. That number, Kaftanski said, is too high.
“We need to re-balance our revenue stream and improve revenue stability,” Kaftanski said. “I don’t want to be in a position where we have to once again decrease service and lay off people.”
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