Debate over a proposed property tax increase in DuPont continues

As promised, DuPont?s mayor brought forward recommendations on how to reform the city?s Business and Occupation Tax code and the revenue it could potentially generate during the July 17 DuPont City Council meeting.

However, based on the response from council members, no one is ready to act on those reforms right now, even if it would reduce the amount of the levy being put before the voters in November.

In fact, the council couldn?t even decide on a proposed levy rate or a ballot title. The only item council could agree upon is that a property tax increase is necessary to bring stable revenue into the city to help cover the city?s $1.27 million annual debt payment on the Civic Center properties. The city currently faces a $750,000 annual shortfall on the debt payment for the Civic Center.

It appears council members are caught in the middle of a tug-of-war over the constituents they should listen to when setting the property tax rate and what it should fund.

In one corner, you have Mayor Michael Grayum asking council to maintain current levels of service, which means covering the Civic Center debt and paying for three firefighter positions.

In another corner, some members of the Community Finance Committee recommend a property tax increase, B&O tax reform, and fee increases to maintain current levels of service, and grow them by adding an extra police officer.

Then there are members of the community who only want the property tax levy to cover the cost of the Civic Center debt and nothing more.

The proposed levy amount under discussion ranges between 75 and 97.5 cents per $1,000 assessed value. For a home valued at $300,000, this is an increase of roughly $227 to $280 per year.

Councilman Larry Wilcox said he is willing to support a levy of 75 cents but does not want to increase the B&O tax or reform it. Councilman Mike Courts and Councilwoman Linda Jordan support a 97.5 cent levy to cover the debt service and maintain current levels of service with the city?s fire department. Both Courts and Jordan support reforming the city?s B&O tax at a later date.

Councilman Roger Westman supports a levy increase of 75 cents to be put towards only the debt on the civic center. Councilman John Ehrenreich supports a levy increase anywhere between 86 and 97.5 cents and does not support increasing revenues through B&O reform at this time.

Councilwoman Penny Coffey thinks the ballot title should be written for the Civic Center debt only at the rate of 88.6 cents. Coffey was in favor of B&O tax reform after doing what she calls ?methodical research? on the subject. However, she is against raising the B&O tax up to two-tenths of a percent.

The current B&O rate is at one-tenth of a percent. The council has the authority to raise the rate up to two-tenths of a percent. If the B&O tax was increased to the maximum amount allowed, an additional $195,000 in revenue would be generated. The problem with increasing the B&O rate across the board, and not selectively, is that small businesses in DuPont would get hit the hardest, while large businesses such as State Farm Insurance, Intel, Pier One and Dania, or any other business that does not generate city business or sales tax, would continue to pay little or no B&O tax into the city.

The council could raise the B&O rate selectively, such as targeting the extraction tax on gravel and forestry products. DuPont Finance Director Sandi Hines has confirmed to South Puget Sound News that she is following up with CalPortland on the rate they are paying for the extraction tax. Hines is also following up on recent timber harvests to see if the city has collected on those taxes as well.

Councilwoman Kathy Trotter, who owns PJ?s Sweet Factory in DuPont, thinks the city?s B&O code needs to be reformed, but as a business owner, she wants to see something in return, such as the hiring of a community development director, and she wants the business community to have a say on the matter first.

Mayor Grayum stated that he had talked to DuPont?s Commercial Owner?s Association, and the feedback was that the reforms and the process of talking to the business owners in the coming months were appropriate.

During the meeting?s public comment period, Larry Ackerman, Director of the Northwest Landing Homeowners Association and Commercial Owner?s Association, encouraged council members and residents to take a hard look at what they wanted their city to become, and go from there.

The DuPont City Council has meetings scheduled for July 24 and 31 to solidify the levy amount and the ballot title so that the proposal can appear on the November ballot. If they fail to do so, or if the levy fails in November, council will be faced with drastic budget cuts to all city services.

Source: http://www.southpugetsoundnews.com/news/south-puget-sound-government/debate-over-a-proposed-property-tax-increase-in-dupont-continues/

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