Hike could be revived in the future
Following the testimony of citizens against a 1 percent property tax increase, the Vancouver City Council indicated in a Monday vote that they’re not interested in raising taxes in 2010.
City staff had recommended a 1 percent property tax increase — the maximum allowed under state law — next year in order to lessen the blow of a projected 2010 budget deficit of up to $6.4 million. The hike would have brought an additional $390,000 to city coffers, mitigating the cuts by a small amount.
However, following public comment by about a dozen people, a debate on the role of government and how to pay for it and a stalemate vote, councilors voted 4 to 3 to keep taxes at the 2009 rate.
Clark County commissioners are still considering a 1 percent increase; other agencies such as the Fort Vancouver Regional Library District are budgeting for a deflationary decrease.
Because property values have decreased by an average of about 10 percent this year, with no tax increase, most Vancouver homeowners will see their city tax bills go down in 2010 — by less than $10, city staff estimated.
Councilor Jeanne Stewart said she understood the savings would only make a small difference to most city taxpayers, but tough economic times call for budgeting for both private and public entities.
“I think we still need to keep cutting (the budget) and still need to prioritize,” Stewart said. “If it’s not going to be there, then we need to stop spending it.”
Outgoing Councilor Pat Jollota, however, said that the few dollars would make a big difference to city employees who could be out of work.
Passing a 1 percent increase “would not have that obscene of an effect on anything,” she said, whereas, “when we cut, we’re cutting people.”
In the last year, the city has cut a total of $15.5 million from its $144.5 million general fund. That included cutting 42 positions, with all but 17 of the jobs being lost through attrition, city finance director Lloyd Tyler said. This year, the city collected $39.4 million in property taxes.
Taxes have gone up by 1 percent every year since the 2001 passage of Initiative 747. Aimed at limiting taxation, local and state government may only increase their property tax levies by the rate of inflation or 1 percent, whichever is lower.
The year 2010 will be the first since I-747 was enacted where not only will inflation be below 1 percent, but there’s a deflation rate of -.848 percent, City Treasurer Carrie Lewellen said.
Under state law, in order to have any taxation rate above -.848 percent — even to effect no change — a supermajority of the council (the majority plus one vote) must declare “substantial need” to do so.
After a debate about a 1 percent increase versus no increase, Councilor Jeanne Harris asked for a vote to approve a 0 percent change. That failed to win a majority vote, with just Stewart and Councilor Tim Leavitt joining her.
However, the three voted against a declaration of substantial need — preventing a super majority vote — that would have allowed the council to approve the 1 percent hike.
Harris made the motion for no increase again and Councilor Larry Smith changed his vote to join the Harris, Stewart and Leavitt in approving the 0 percent change in property taxes. Councilors Jollota and Pat Campbell and Mayor Royce Pollard voted against the motion.
There is still a chance that the 1 percent increase could be added to Vancouver tax rolls in the future: Under a “banking” concept allowed under I-747, the council could “save” the 1 percent they could have levied in 2010, and add it on top of any future tax.
For example, next year the council could vote to levy not only the I-747 annual increase rate of the lesser of 1 percent or the inflation rate, but also the additional 1 percent, city staff explained. The council will further debate and vote on that option on Dec. 21.
