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Initiative 1033 is no good for North Bend
By Ken Hearing, North Bend Mayor
As mayor of North Bend, I feel compelled to express my concerns about Initiative 1033.
Like most of you, I believe that our state and federal spending has grown out of control for years, and neither party seems interested in putting on the brakes.
As I understand I-1033, property taxes will be frozen at 2009 levels and any new revenues received by the city will mean a credit to your property taxes. The exceptions to this are that the rate of inflation will raise that baseline, as will any increase in tax base due to population growth.
While I have heard from other cities how this initiative will specifically affect them, I am only referring to how this will affect North Bend in general terms.
A city’s general fund is the source of money used to pay for everything that is not a special revenue fund, a capital fund or a utility. The general fund is used to pay for fire and police services, parks, street maintenance and repairs, and most of the salaries of city employees. In most cities, the primary source of revenue for the general fund is property taxes. North Bend is quite different, in that only 30 percent of our general fund revenue comes from property tax.
Until 2009, the economy was growing and the cost of living was increasing by over 4 percent every year. Because of Initiative 747, it was only a matter of time before property tax increases could not sustain existing levels of service the citizens have enjoyed, let alone afford new services. Many cities cut staff in 2009 and many more will be doing so in 2010. Sometimes, the service reductions are not as visible, such as mowing the parks one less time per week. Sometimes, service cuts are very visible and mean longer response times by fire and police, less snow clearing, no overlays on problem streets, no sidewalk repair, no code enforcement or a lower level of overall service.
If I-1033 passes, general fund revenues will be basically frozen at 2009 levels — levels that are already depressed as a result of the economic downturn. North Bend has a large amount of undeveloped and underdeveloped commercial property, and because our property tax rates are very low, we rely heavily on the sales and business and occupation taxes that commercial development creates.
Business growth helps pay for needed services throughout the city, paid from the general fund. If all new sales tax is used to reduce property taxes, there will be no new money to provide the services these businesses need. Remember, these business taxes help keep your property taxes lower.
I’m not a Tim Eyman fan, but his persistence in introducing initiatives that force government to limit taxes, or even give money back to the taxpayers, makes one think about what services we want government to supply. If the money paid to any service provider is reduced, then the ability of that provider to produce those services is decreased. Eyman’s initiatives make it harder for everyone to complain about government when expected services are no longer available. The city of North Bend has been a good steward of your tax dollars. We have not taken the allowed 1 percent property tax increase in four of the past five years, because we were able to balance the budgets and provide the desired levels of service without that tax increase.
I would hope that the voters would have confidence in our elected city officials and vote against Initiative 1033.
• Ken Hearing is mayor of North Bend. E-mail him at email@example.com.