STANWOOD — Voters in the city are being asked to consider a six-year tax increase to pay for rising police and fire costs.
The measure is set to appear on the Nov. 3 general election ballot. The Stanwood City Council voted July 23 to put the proposal in front of voters.
It would take more than half of voters to approve the tax increase, called a levy lid lift. Money from the higher taxes would be directed toward public safety, specifically the city’s contracts for police and fire services, according to council documents.
The increase would be up to 15.5 cents per $1,000 assessed property value, totaling $46.50 per year on a $300,000 home. The current city tax rate is $3.05 per $1,000 assessed value, or $915 per year on a $300,000 home.
The 15.5-cent increase would be smaller if it runs up against state caps on local tax rates.
City officials say the costs of Stanwood’s contracts for police and fire services are going up faster than the city’s share of property and sales taxes. Property taxes are the foundation of the city’s general fund, of which $3.28 million — roughly 57 percent of the $5.8 million fund — goes toward police, fire and courts.
State law limits to 1 percent a year the amount cities such as Stanwood can raise taxes. Stanwood collects about $2.1 million a year, meaning officials can raise property taxes by about $21,000 in total revenue next year. New construction could add up to $25,000 more to the overall tax base, according to the council documents.
The city’s police services contract with the Snohomish County Sheriff’s Office includes has a built-in increase of roughly $62,000 per year over the next five years. The pricetag is $1.57 million for 2015. The city also contracts with the North County Regional Fire Authority for fire and emergency medical services, costing $1.28 million this year and in 2016. That cost could go up more than $200,000 per year starting in 2017, varying based on the city’s assessed value and the fire authority’s levy rate, according to a city staff report.
If voters approve a levy lid lift, the higher tax rate would take effect in 2016 and would be expected to bring in up to $171,000 more in revenue.
City staff and councilmembers reviewed other options for managing public safety costs, city administrator Deborah Knight said. They considered annexing into a fire district rather than continuing to pay for fire and emergency medical services out of the general fund, but found the city’s taxing limit would have dropped to $1.60 per $1,000. Since the city no longer would be paying directly for fire service, it would arguably need to collect less money for the general fund. City leaders worried that shrinking the taxing limit could also limit the city’s ability to address other needs.
If voters don’t approve the levy lid lift, the money to cover police and fire contracts would have to come out of budgets for other services supported by the general fund, said Councilman Matt McCune, who serves as chair of the city’s public safety committee. The general fund includes departments such as parks, public works, planning and city administration
“The city budget is like a big pie and you have to figure out how to slice it. The only way it gets bigger is if people approve this levy lift,” McCune said. “There’s going to have to be some hard decisions made if this doesn’t go through.”
The North County Regional Fire Authority also has a tax measure on the November ballot. It is asking voters to renew a levy for emergency medical services. If approved, the rate would stay the same as taxpayers are paying this year, which is 50 cents per $1,000 assessed value or about $150 on a $300,000 home.
Herald reporter Rikki King contributed to this report.
Kari Bray: 425-339-3439; kbray@heraldnet.com.
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