Clallam County commissioners consider 0.2 percent sales tax break; action expected Tuesday on resolution

PORT ANGELES — Clallam County commissioners are expected to lower the sales tax rate by two tenths of 1 percent on July 1 until further notice.

Commissioners on Monday added a proposed resolution to Tuesday’s meeting agenda that would initiate a process to lower the tax on most goods and services sold in unincorporated areas from 8.4 percent to 8.2 percent.

Commissioners hope the lower tax will be a boon for the auto dealerships east of Port Angeles.

Since the state adds an extra 0.3 percent on automobile sales, the sales tax rate for vehicles will be reduced from 8.7 percent to 8.5 percent.

“They will market that,” Commissioner Mike Chapman said.

Automobile sales represent the second-largest source of sales tax revenue for Clallam County behind construction.

“If our desire is to have a sales tax reduction begin on the first of July, we need to provide some notice, like tomorrow, or by the end of the week to the [state] Department of Revenue,” board Chairman Jim McEntire said.

The open-ended tax holiday is part of a new initiative of the Board of County Commissioners to spend down excess reserves in ways that help the community.

Commissioners also are eying contracts with such nonprofit groups as Serenity House of Clallam County, which recently asked for financial help, and plan to set aside $1.5 million for the repair and replacement of the aging sewer systems in Clallam Bay and Sekiu.

The board also may consider reinstating a 40-hour work week for county employees on 37.5-hour schedules.

“I think it’s legit to maybe even have a fourth piece, or talk about a fourth piece, which is let’s look at increasing the hours that the courthouse is open, and let’s look at what that costs as far as additional time over the work week,” McEntire said.

“Let’s roll that piece onto the table as well.”

Moving to a 40-hour work week would cost an additional $335,000, County Administrator Jim Jones said.

Commissioners will continue to discuss reserve spending next week.

For now, the three commissioners reached unanimous consensus Monday on a 0.2 percent sales tax reduction in July.

“I think it needs to be two-tenths of a percent,” McEntire said.

“One tenth is significant, but it doesn’t go far enough. I think two tenths is really what we need to be looking at.”

Clallam County’s general fund for day-to-day operations has about $9.1 million in restricted reserves and $3.2 million in unrestricted reserves.

Commissioners have historically set aside reserves for a rainy day, but number of things have changed.

Last year, the county received one-time revenue spikes from road construction and timber sales.

Certain pots of money also were moved from other funds into the general fund to comply with new state guidelines.

Longtime Commissioner Mike Chapman said he had an epiphany last month about austerity in government.

Holding taxpayer money in the bank does little good for the people, Chapman realized, as the county earns just 0.9 interest on its investments.

McEntire and first-year Commissioner Bill Peach have supported spending reserves on economic revitalization projects.

Commissioners Tuesday will consider a $150,000 contract with the Clallam County Economic Development Council for economic development activities for the remainder of this year.

McEntire initially proposed a six-month, 0.02 percent sales tax holiday from July 1 to Dec. 31 that would save taxpayers about $360,000.

Chapman argued that it would difficult to raise the tax back to 8.4 percent in six months.

“It’s just not worth it to turn around and raise taxes,” Chapman said.

McEntire and Peach agreed to keep the tax holiday until further notice.

The board also directed Health and Human Services Director Iva Burks to prepare a list of funding requests from the organizations with which the county contracts.

There are more than 150 registered charitable organizations that provide good things for people in Clallam County, Jones said.

“The question to me is where do we stop?” Jones said.

“Where do we start? Do we really want to pick winners and losers?”

Commissioners agreed to use existing programs like the Homelessness Task Force to make recommendations on nonprofit contracts.

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Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 5072, or at rollikainen@peninsuladailynews.com.

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