PORT ANGELES — While Initiative 1033 is pushing property taxes and government spending to the forefront of many voters’ minds, the city is considering raising the tax next year to help offset drops in sales tax and permit revenue.
Port Angeles Finance Director Yvonne Ziomkowski said the city staff will recommend that the City Council approves raising the 2010 property tax rate from $2.01 per $1,000 assessed valuation to $2.03 at its Nov. 17 meeting.
The move would increase property tax revenue in 2010 by 1 percent, or about $40,000, and cost the owner of a $200,000 home an additional $4 that year.
The city says the increase is needed because sales tax revenue is expected to drop $55,000 next year after plummeting about $435,000 this year.
License and permit revenue is also expected to decrease by $70,000 in 2010.
Levy limit
A 1-percent raise in property tax revenue is the most the city can levy due to Initiative 747, which was passed by state voters in 2001.
Political activist Tim Eyman sponsored I-747 and the current I-1033 proposed on the Nov. 3 ballot now before voters in the all-mail election.
I-1033 — which the City Council formally opposed Tuesday night — would limit growth of the general funds of cities, counties and the state to the funds’ previous year’s revenue plus annual inflation multiplied by the percentage change in population.
Unless voters approve further spending, any revenue that exceeds that formula would have to be given to property owners through lower property taxes the following year.
Under the 2001 initiative, the city can only raise the property tax rate by 1 percent or inflation, whichever is lower, without getting voter approval.
Although inflation is negative, at minus-0.848 percent, the city can meet the 1-percent cap if the City Council passes a resolution saying that it has a “substantial need” to raise more than inflation.
The City Council passed such a resolution, citing the drop in sales tax and permit revenue, Oct. 6 in a 6-1 vote with council member Larry Williams opposed.
Another vote is needed to set the levy in 2010.
Williams said he opposed the resolution because the council does not have a prioritized list of services that he thinks is needed to handle declining city revenue.
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Reporter Tom Callis can be reached at 360-417-3532 or at tom.callis@peninsuladailynews.com.