The council was briefed on the situation at a special study session Tuesday night at City Hall; it didn’t take any action.
The council is considering a number of options to raise taxes, some of which require asking voters to raise them and others that wouldn’t require voter approval.
“We’re still at the edge of that cliff looking at 2013 …” Hall said. “It’s not going to be an easy year.”
City finance director Jane Kirkemo outlined some options to raise taxes that require voter approval:
• Property tax levy increase. The city would gain $1.3 million per year in revenue by raising property taxes by 25 cents per $1,000 in assessed valuation. That would cost $62.50 per year for the owner of a $250,000 home. The item could go to voters only in the primary or general election. That means the council would have to decide to put the matter before voters by May 11 in order to get the item on the primary ballot, or Aug. 7 to get it on the general ballot.
• Private utility tax increase. A 1 percent increase would raise $1 million a year. The item could go up for a special election on several dates the state reserves for them, or in the primary or general election.
• Sales tax increase. The city could levy a one-tenth-of-1-percent sales tax increase that could raise $1.2 million per year under state law. But the law requires that one-third of that be spent for public safety. The item could go only on the primary or general ballot.
Kirkemo also outlined options for raising taxes that wouldn’t require voter approval:
• Public utility tax increase. A 1 percent increase would generate $350,000 per year, and the council could act at any time.
• Business & occupation tax increase. If the council raised the tax to the maximum, it could raise $2.2 million per year. The city now levies a tax of two-tenths of 1 percent on service businesses and one-tenth of 1 percent on other businesses. It could raise the latter to two-tenths of 1 percent.
• Gambling tax increase. The city could gain $100,000 more per year if it raised gambling taxes to the maximum, but the money must be used primarily for gambling enforcement.
Besides not being able to dip into one-time reserves, the city has other challenges. The council hasn’t decided how to fund $3.5 million or more in repairs to the outside of The Washington Center for the Performing Arts. And the city has underfunded its building-repair and replacement fund, which worries Mayor Stephen Buxbaum.
It’s early yet, and several council members have said they want to get public input before making any decision. But the discussion has begun.
Matt Batcheldor: 360-704-6869
mbatcheldor@theolympian.com
