Snoqualmie City Council considers 2018 property tax rates

Snoqualmie’s City Council heard arguments in favor of increasing the city’s property tax levy by the allowed 1 percent last week, but will not vote on the issue until next week.

Snoqualmie City Council continued conversations around a possible 1 percent increase to property taxes for 2018.

As part of the budget process for the end of the year, the city must review the 2017-18 biennial budget and discuss levying the property tax to the state maximum of 1 percent.

The topic was introduced at the council’s Nov. 13 meeting, but action was not scheduled until the council’s next meeting, Monday, Nov. 27.

In 2016, the council approved the 1 percent increase for 2017.

Rob Orton, Interim Chief Financial Officer, explained the increase is a combination of the 1 percent increase on the previous year’s total old total plus the value of new local construction and the increased value of utility infrastructure, among others.

The proposed total levy amount for 2018 is $7,946,846, up from the city’s total of $7,570,122 in 2017.

The possible increase dominated the discussion on Monday night, after staff gave a brief overview on the recommendation.

State Initiative 747, originally passed in 2001 and reinstated in 2007, limits local governments to a maximum property tax levy of 1 percent per year.

The council discussed why taking the maximum was necessary, citing that despite levying the maximum amount, it still wouldn’t be enough to cover the increase in expenses year to year. With expenses rising 2 to 3 percent each year, staff said the city must continue to work on moving away from its heavy reliance on property taxes.

Council member James Mayhew summarized the point by stating that even though the city has been filling in the gap between the 1 percent and actual inflation of expenses each year, that revenue was often from unsustainable, one-time sources that can’t be repeated especially since the overall development potential is limited.

“Trying to evaluate this 1 percent increase when we’ve got costs going up at three times that and we’re, in essence, covering the difference with things that are not sustainable, they are one-time items, or items that may recur but at a much lower level,” he said. “In order to have sustainable revenue source or to cover our costs we need to keep going at least the 1 percent because our costs are going up much more than 1 percent.”

“When half of your revenue is limited to a 1 percent increase every year that is a problem.” Councilman Sean Sundwall added.

Councilwoman Kathi Prewitt said many of the development projects in the city’s short-term future were designed to help move away from property taxes, especially as one-time projects and the buildout of residential areas in Snoqualmie comes to an end.

“You have to figure out how to get either your B&O (tax) up or your retail tax up, so that’s why economic development and what we are doing with the mill site and the Salish is so important,” she said. “Then eventually the annexation of Snoqualmie Hills will be just as important in my viewpoint so that you are attacking this problem. I don’t think you want more housing on that property to drive the problem up, you want to offset with revenues.”

More discussion and action on this topic will take place at the next regular city council meeting, 7 p.m. Monday, Nov. 27 at Snoqualmie City Hall.

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