LYNNWOOD – After two weeks of extra meetings, the City Council has passed its $73.3 million 2005-06 budget.
The budget includes a 2.5 percent increase in the property tax for two years and a new tax on telephone service. A 3 percent tax on land lines, cell phones and pagers was added with the provision that it be reviewed in two years.
The budget was originally scheduled to be passed Dec. 13, but five more meetings were needed. And the vote was not unanimous; the budget passed 4-3.
“Nothing was unanimous,” said Lisa Utter, the council’s president, who voted in favor of the budget on Tuesday.
The main disagreement was between the council and Mayor Mike McKinnon over his original budget, officials said. McKinnon had proposed a 2 percent utility tax on electricity, natural gas, phones, pagers, water and wastewater utilities.
“We’re the only city in the region with a zero percent utility tax,” McKinnon said. “The question to me is, why not?”
He proposed an increase in the business tax of $13 to $20 per employee, the reasoning being that larger businesses should pay more, McKinnon said.
The mayor also proposed adding some city positions, including a staff member for the new Office of Neighborhoods that the council has said it wants but has yet to fund.
The city faces higher expenses in the next two years, particularly in personnel and union costs, council member Jim Smith said.
“When you have problems balancing your budget, you don’t bring in new expenditures, programs and personnel,” he said.
The council approved the 2.5 percent property tax increase because it nearly equals the rate of inflation, Smith said. “We don’t want to increase taxes, but we don’t want to go backward, either,” he said.
McKinnon had proposed a 1 percent increase, the maximum allowed under state law without using banked capacity, or property taxes the city could have levied in past years but did not. The city will dip into its banked capacity for the additional 1.5 percent.
The 2.5 percent increase will mean about another $10 in 2005 for the owner of a $200,000 home, McKinnon said.
The council approved the telephone tax because a phone is not a basic living need, Smith said. Officials estimated the tax would amount to about $9 a year for the average user of a basic telephone line. There was some disagreement among the council on whether to approve the tax, Smith said.
The council also approved a business fee increase of 5 percent.
Meanwhile, some unspecified, across-the-board cuts were made Monday to the budget, amounting to about $847,000, including $100,000 in the legal fee budget. Programs and services to the public are not expected to be affected, officials said.
Reporter Bill Sheets: 425-339-3439 or sheets@heraldnet.com.
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