LYNNWOOD — In his 2005-06 biennium budget, Mayor Mike McKinnon has recommended the City Council establish for the first time ever a 2 percent utility tax.
“Every community group I met with concurred that Lynnwood needed new tax revenue,” McKinnon said. Adding, Lynnwood has never had a utility tax.
The utility tax would bring in about $1 million per year and is just one of the ways McKinnon has proposed to balance the 2005-06 budget, which is about $8.4 million dollars out of balance.
If the utility tax was instilled, he said, it would cost single family residences in Lynnwood about $6 a month —a little less for apartment and condominiums and a little more for businesses.
McKinnon shared his budget recommendations to the City Council Oct. 25. Now the Council will take the mayor’s recommendations and read or watch staff video presentations on each department’s wish lists and come up with its own balanced budget by the end of the year.
Along with the proposed utility tax, McKinnon recommends the city take its allowed 1 percent increase in property tax (which would bring in $200,000 over two years) and increase some business license fees (would bring in $290,000 per year).
McKinnon also plans to take $838,098 from the city savings account. He added, depending on the increase in sales tax from the new editions to the Alderwood Mall, that amount taken from savings would be lessened.
According to Lynnwood finance director Mike Bailey, the city took in $2.7 million from the mall alone in sales tax revenue in 2003.
“I have guess-timated a conservative 10 percent increase for 2005,” Bailey said about the mall revenue.
The City Council has increasingly each year taken from the city’s savings to balance the budget and this is a concern for Lynnwood’s future, he said. “We have expenses exceeding our revenues,” McKinnon said, for about eight years it’s gone from $22 million to $13 million. That’s how we’ve been balancing our budget these last years— if something doesn’t change, this will continue.”
McKinnon said the one revenue that’s up in the air is sales tax— this is another reason why he favors adding the utility tax.
Other ways McKinnon has planned to balance the budget is by not starting most new programs requested by different departments ($1.3 million). With this and by reducing recurring expenditures across the board by about $1.2 million per year reduces total expenses by about $2,340,000, he said.
“What will make a big difference is that overtime will be managed more and we won’t be replacing people immediately after they leave their jobs,” he said. He added, he also recommends the Council reduce the amount of optional training and reduce or eliminate employees dues and/or subscriptions.
McKinnon said he’s not proposing to cut existing programs except for the annual Spring Cleanup.
For more information about McKinnon’s budget recommendations call his office at 425-670-6613 or go to www.ci.lynnwood.wa.us.
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