Last week the thesis for my column was: taxes are not always bad. This week I’m going to tackle an issue the city of Enumclaw has been dealing with for at least seven years – raising taxes to fix our streets. Let me give you some background.
About seven years ago Mayor John Wise requested and the council approved an outside agency to do a study on the condition of Enumclaw’s city streets. At the time, the consultants noted that streets needed to be fixed on a rotating basis because the longer the city waited to maintain our streets, the more costly it would be for taxpayers.
Nothing was done with the street study. This puzzled me since we paid several thousand dollars to get the study done. What was the point of ordering the study if we weren’t going to use the information? But that’s politics and human nature.
I also found it was politics for the previous council not to want to vote for a tax increase to fix our streets because of the oft-repeated mantra, “No more taxes!” This was one of the cases where the council listened to the public when they should have done what was best for the long-term needs of the city and its citizens.
Then, about two years ago, the council was offered a loan of several million dollars from the state at an interest rate of between .75 percent and .25 percent, depending on how fast the work was done. The council was too afraid to even make a motion to accept the very inexpensive state loan. They weren’t sure where they would get the money to repay it, even though there were many options available, just like now.
What got the current council going was finding out that King County had recently formed a tax benefit district (TBD) to fund Metro buses, something that is questionable for a county to legally do. Money could be raised through a $60 vehicle license tab fee increase plus a rise of .1 percent of sales taxes. This should be on the ballot this coming April. Enumclaw would only get a small portion of that money.
The council decided instead to be proactive and beat the county to the punch by voting for a $20 vehicle tab fee increase before the county filed for their car tab increase. That way the city, which had created a TBD last year, could get the entire $20 vehicle fee to fix the streets rather than having to share the money with the county. The council would not have to go before the voters to raise car tab fees.
The city will wait to see what happens with the county vote this April to decide whether they will keep the car tab increase or whether they might withdraw the fee and add a .2 percent sales tax increase to raise the $550,000 needed to maintain our streets on a yearly basis.
Local car dealers like Gamblin and Fugate Ford might be leery of this sales tax increase because it might make them less competitive with other dealers. That issue will have to be considered by the council.
The council has another option of raising money through property taxes. Cities have what is called “banked capacity.” If the council wanted to, they could vote to raise property taxes using the percentage of unused (banked) money available to them. Banked capacity doesn’t mean the amount of unused available taxes are set aside, it means that percentage can be added on at a later date to raise money.
The 2014 budget pulled $300,000 from reserves to keep the city running this year. Zero money was allocated for streets except for a few hundred thousand that was found through grants the administration applied for and received.
When I was on the City Council, we voted several times for the right to tax to keep some other government agency from taking the unused money that was available.
This particular car tab fee increase is just one more example of the city trying to protect its interests from the county or other agencies who want it for their own uses. That’s the way government works.
Whatever happens with the April ballot, however, taxes are going to go up.
Maintaining streets and a city costs money. The longer we wait – already a long time – the more it will cost us taxpayers. Taxes are not always bad.