By Debra Smith Herald Writer
EVERETT — A 1 percent property tax bump each year has been relatively routine stuff for the city of Everett.
Not any more.
A tax increase that would amount to around $2 more a year for a typical homeowner set off a 45-minute debate among the Everett City Council on Wednesday night after people in the audience told the council they weren’t sure in this economy if any new taxes were a good idea.
“We’re living in hard times here,” Annie Lyman of Everett told the council. “My home value has dropped. I’m a senior living on a fixed income. My investments have tanked. Are there other options?”
The council’s wide-ranging discussion touched in part on whether people could afford more taxes, the amount of information the council gets from the city’s administration and whether the council could get more information about what other cuts would have to be made if the tax wasn’t passed.
The talk came just after Mayor Ray Stephanson delivered his annual budget address to the council, which outlined how the city planned to close a nearly $10 million budget gap. Part of his plan included the 1 percent property tax increase, which would equal an additional $320,000 in property taxes collected next year.
That did not sit well with at least one resident in the audience, businessman Jim Staniford, who blasted the mayor for relying on a tax increase in his proposed budget that hadn’t been approved.
The council eventually decided to shelve voting on the tax increase until next week so they could get more information from the city’s administration. The council must make a decision then because an ordinance takes 15 days to take effect, and the city must file the property tax ordinance with Snohomish County by the end of the month.
The mayor in his budget address told the council that the stagnant economy is putting pressure on the city’s ability to pay for basic services.
It’s not getting better any time soon. Keeping the city in the black requires tough choices, he said.
“Delivering a balanced budget this year has not been an easy task,” he said. “The exceedingly slow pace of economic recovery has placed tremendous pressure on our ability to fund core services, and we do not expect to see any meaningful improvement for the next few years.”
The revenue the city depends on to pay its bills hasn’t kept pace with expenses. The city expects to bring in $110 million in 2012. That’s nearly $9 million less than what the city brought in 2008.
Meanwhile, a substantial part of the city’s operating budget goes toward paying city employees: librarians, firefighters, police officers, streets workers, office clerks and the like. Those costs and others such as fuel and materials continue to rise.
He listed the most significant measures to balance the budget:
•eliminating cost-of-living increases for appointed employees and elected officials;
implementing additional controls to reduce overtime costs;
eliminating 12 positions through attrition;
reassigning staff to areas of need from departments where activity declined with the downturn;
reducing departmental spending in 2011; the savings will be used to prefund 2012 contributions to insurance premiums, vehicle replacement and facility maintenance reserves; and
suspending annual contributions to the police and fire pension funds for 2012. Even with this action, the reserves are still on track to be fully funded by the year 2025.
The 2012 budget won’t be final until the City Council approves it.
Debra Smith: 425-339-3197; firstname.lastname@example.org