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City to hear public on tax hike
In order to cover the City of Bremerton's 2012 budget, as proposed, the Bremerton City Council will be asked to approve raising an additional $1 million in funds through several tax increases.
Tonight, the council will hold a public hearing on three ordinances that would add hundreds of thousands of dollars to the city's beleaguered revenue sheets – with much of it going to the Street Fund – by taxing utilities.
The city will also explain Ordinance 5170, which raises wastewater and stormwater taxes by 5 percent and decreases water taxes by 1 percent for a net increase of $324,044 from stormwater, which will be transferred into the Street Fund. An additional $613,666 from wastewater will go straight to the city's general fund as revenue.
City councilmember Roy Runyon said that stormwater and wastewater utility ratepayers would not necessarily see a rate increase as a result of the additional taxes levied on the "enterprise funds," which he described as "healthy."
Combined, the water utilities would have $9 million in reserves at the end of the 2012 budget.
The additional tax, if approved, will be applied to the individual utility fund as if it were a business, Bremerton finance director Becky Hasart said. State law allows the action as a revenue source, she said.
To further fill the Street Fund, the city council will also consider Ordinance 5169 which raises parking tax from 10 to 15 percent. The expected $150,000 in increased revue would be put into the Street Fund.
Hasart said that for several years while under the previous public works directors. The Street Fund was reliant on "inappropriate transfers," she said. That public works continued to operate as such happened, Hasart said, "Because nobody in the city understood the Street Fund."
The final hearing tonight will be on Ordinance 5168, which, if approved, would increase regular property taxes and the Emergency Medical Services levy by 1 percent, the maximum allowable – $63,747 and $13,743 respectively.
If approved, the action will raise the sum total of taxes paid on wastewater in the city to $20 for every $100 paid in rates.
Several weeks must pass before the council can approve the proposed 2012 budget. But its balance and the numbers to be approved are completely reliant on the passing of all three ordinances to raise taxes.
Hasart described the plan as a "survival budget" and said the council had some tough decisions to make.
Councilmember Greg Wheeler said he supports the tax increases as a way to balance the budget along with the layoff of 25 employees to close the rest of the gap.
The city needs workers and to balance the budget with nothing but pink-slips would put the city in jeopardy in terms of its ability to function, Wheeler said.
Facing an overall $2.1 million shortfall in cash, the city's 2012 budget includes laying off 25 city employees, which covers about half the gap. The rest is to be paid for by new revenue taxed out of the utility funds.
Council member Roy Runyon also supported balancing the budget with the tax increases as proposed. Runyon said the idea to raise taxes was his. It's a balance of cuts and revenue enhancements, he said. Stormwater and wastewater rate payers would not necessarily see a rate increase as a result of the additional taxes levied on "enterprise funds." Those funds are "healthy," Runyon said.
The proposed budget shows the water utilities to collectively end 2012 with $9.5 million in reserves.
Asked why not use the millions in utilities reserves to decrease rates and give relief to the residents of Bremerton, Hasart said, "It's not the time to roll back rates."
According to census data, 57 percent of utility customers are renters who have leased their homes and apartments. Wheeler said that utilities costs are passed along to the renter.
Additionally, the city council tonight will consider Ordinance 5169 which raises parking tax from 10 to 15 percent and put the $150,000 in increased revenue into the Street Fund.
Ordinance 5168, if approved, would increase regular property taxes and the Emergency Medical Services levy by 1 percent, the maximum allowable – $63,747 and $13,743 respectively.