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North Bend sets tax cap at 2 percent for 2001
NORTH BEND The North Bend City Council voted on Nov.
21 to prevent property taxes from exceeding 2 percent next year, a move
that chopped $78,000 from the $4.5 million general fund budget for 2001.
The entire budget is $15,270,478, but the only part affected by the
tax cap is the general fund.
The decision was made despite talk that Initiative 722 which
was passed by Washington voters Nov. 7 could be ruled unconstitutional
or overturned in court. I-722 puts a 2 percent limit on property
assessment tax increases and, if not overthrown, would roll back any tax and fee
increases not approved by voters from July through December of 1999.
Three out of five council members, including Fred Rappin, Ed
Carlson and Mark Sollitto, voted for the tax cap. They said that they supported
it because the majority of North Bend residents voted for I-722, as well
as the previous year's controversial I-695, both of which sought to limit
tax increases. I-695 was found to be unconstitutional in court and overturned.
"I guess what swayed me was the fact that, yes, the citizens are
voting for this and we do owe it to them to represent their wishes," Rappin
Carlson said that he was the "lone voice in the wilderness" a year
ago when he voted against a 6 percent increase and is pleased with the
"I'm just delighted to see two of my fellow council members
come around this year after two statewide initiatives, so it's good that the city
is moving forward with the will of the people," he said.
"I think it's always a dangerous thing for elected officials or
government employees to assume that we all know better than the people
who voted," Carlson added. "I think the people are oftentimes very
intelligent, more so than the elected officials
certainly, and I think it's imperative that we follow their lead in the very
clear public input on taxes."
"That is a pretty resounding message that I think the folks would
like to see us tighten our belts," Councilman Mark Sollitto said.
But the other two council members, Jim Gildersleeve and
Elaine Webber, did not feel the same way.
"It is great to go along and to recognize the people's vote here, but
as it always is, something has to be given up in order to honor those
wishes, there is a cost," Gildersleeve said,
explaining that it's sometimes easy for residents to be "anti-tax." "But
sooner or later, it has an impact on your community."
Gildersleeve voted against the 2 percent tax cap and said he felt
the entire 6 percent was necessary, but would have compromised at 4 percent.
`I think a 2 percent increase is way too deep here, and I can't support
it," he said.
While Gildersleeve voted against the tax cap, Webber abstained
from voting altogether.
"I don't agree with what we're doing with the 2 percent" cap, she
said in an interview a few days later. "I think my job is to do what I think
is best for the community and I believe that some of the things that we'll
cut to find the missing money are things that we shouldn't."
Webber said she doesn't think that taxpayers were striking out against
the city, which takes only a small portion of taxes, but rather at "big
government," and feels implementing a 2 percent maximum was the wrong
action to take because it cuts necessary funds.
Because property taxes were limited to 2 percent over last year,
city officials have been scrambling to come up with solutions to balance the
2001 budget, which is 5 percent higher than this year's.
"The [budget] increase is necessary in order to discharge the
expected expenses and obligations of the city of North Bend, which are proposed
to be 5 percent higher than the 2000 general fund," said Elena
Montgomery, city treasurer, at the Nov. 21
meeting. "The proposed increase is mainly a result of contractual obligations
with labor unions, an increase in public safety-contracts for service and
cost-of-living adjustments [for non-union city employees].
"We had to get creative to be able to balance the budget,"
Montgomery said. She added that although the staff was able to find places to cut the
budget without dramatic impact, if the 2 percent cap continues beyond
2001, regular services could be cut.
Gildersleeve said he's concerned about the budget cuts resulting
from the decision, especially since the City Council has not voted for less than
6 percent in more than 20 years.
"I think there was a significant point made by the city treasurer
that our actual obligations this year are increasing at about 5 percent, so
you can see that we are setting up a possible deficit trim," he said. "One
year is not going to put us in the hole, and we all know that, but if this were
to continue for many, many years into the future, rather than at least
collecting enough additional revenues to account for the cost of doing business, so
to speak, I think that the city's financial posture would be weakened."
Gildersleeve added that future council members will have to be
aware of the money necessary to run the city.
But the council members who support the cap still thought it was
"This is a vote for 2001, this is not a vote forever," Sollitto said. "The
current budget for the city of North Bend is $4.5 million. The impact of
reducing the property tax increase from 106 percent to 102 percent is $78,000,
or about $22 per household, assuming that each household has a value
However, the lost revenue could possibly result in cutting future
public services, including police, park and street maintenance.
"At this point it is a [tax] break [for] one year and we have
trimmed our budget in order to come up with a balanced budget, and we probably
will have to eliminate some services a little or tailor them down a little more
than we would like," Rappin said. "We would love to continue to give
people better services as far as growth, parks services, human services and
any number of things, but we do have to come up with a balanced budget
Rappin explained that many cities are raising their taxes higher than
2 percent, and that Issaquah is not raising them at all and Sammamish is
actually reducing its taxes. The cities of Snoqualmie, Duvall and
Carnation have raised their tax levies the full 6 percent allowed.
Montgomery explained in a later interview that in order to
compensate for the $78,000 that will be cut, operations budgets for each city
department were cut, along with some legal expenditures.
In addition, the largest amount of money being cut was slated to pay
off the city's street sweeper ahead of time, which will now have to wait.
Some community services were also cut, including money for
painting the senior center and a donation request for the Human Services
Commission, which funds other Valley non-profit agencies.
Money that was in a city-owned lid guarantee fund that amounted
to $36,000 was pulled to offset the chopped budget. Montgomery
said that this type of money will not be available in future years, if the cap
is kept at 2 percent.
Webber said she wished North Bend residents would have offered
an opinion on the tax cut and is uncomfortable with the services that
"One of the things that I very much feel that the citizens need to do
when they are voting to curtail public spending is to step forward and tell us
what it is they want us to curtail," she
said. "As it is, we have no public input whatsoever and the decision has been
left to us. And as Mr. Rappin pointed out, we are here to do the people's will
and the people's will is to cut, but the choices we make may be the very
services the people value and aren't the ones they had in mind to have cut.