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Council approves tax increase
Cool economic forecasts for 2009 mean Snoqualmie’s annual budget is taking a 13 percent dip in the coming year.
The Snoqualmie City Council is slated to approve a 2009 budget of $54 million, some $8 million less than its budget for 2008, at its upcoming meeting, Monday, Dec. 8.
City interim finance officer Donya Gregson said Snoqualmie is taking a conservative approach to potential finances in the coming year.
“We’re not forecasting major revenues to come in as high as they came in 2008,” she said.
The city considered cooling housing starts, the state of the economy and the ability of residents to pay their taxes in 2009’s conservative budget estimates.
The budget fell for the coming year in spite of the council approving its 1 percent property tax levy increase, about $39,000. Since 2001, Washington cities have been limited to the 1 percent maximum annual increase by Tim Eyman’s Initiative 747.
At the council’s Monday, Nov. 24 vote on the property tax levy, Councilman Bryan Holloway expressed his interest in forgoing that 1 percent increase for a year, citing economic concerns. However, Mayor Matt Larson said that increase would equate to about a dollar per month in savings for the average homeowner. Larson said he wanted to keep that dollar in the community, rather than seeing it potentially leave the community through retail “leakage” to other cities, such as Issaquah. After some discussion, the council ultimately voted in favor of the increase.
Property taxes provide about $4.1 million to city revenues.
The city’s assessed valuation for 2009 is about $2 billion. It rose by about $300,000 over the 2008 valuation. The current 2008 levy rate is $2.30, and will drop to $2.10 next year.
City administrator Bob Larson told the council that the city turned away all requests for new staff in 2009, ultimately approving $270,000 of the $900,000 in requests for staff and enhancements by department heads.
“There are a lot of other things we would like to provide, all across the board — parks, communications, planning, police, fire, they all took hits this year,” Larson said. “There are things that would have been nice to have. But we couldn’t pass that through, couldn’t sustain that growth.”
Mayor Larson said essential city services will not be affected.
“It’s not as bad as it looks,” he said of the budget shrinkage.
The city has been planning for years for what Larson describes as “the cliff,” the time when Snoqualmie Ridge stops growing, sales tax from new home sales levels off, and the city will have to get by on revenues other than those from growth. Rather than make drastic cuts, the city is allowing attrition to lower the workforce in those departments impacted by growth, such as planning or building officials, according to Larson.
Funding remains in place to pay for construction of the new Snoqualmie City Hall. The city will issue some debt in the coming year to help fund the new building. Larson said the economic situation could mean the city would have a longer payment period for that debt.