LA CENTER — A tentative plan to raise taxes on La Center’s four cardrooms was quashed at a Wednesday night city council meeting in favor of raising sewer rates and tacking on a new utility tax.
Under the new proposal, presented at a workshop meeting, the city will increase sewer rates by $5 a month and implement a 2 percent utility tax on the city’s sewer services. Combined, those new fees would likely add an extra $6.25 to a customer’s monthly sewer rates. The city intends to use the money to keep its reserve fund steady and to ensure that city revenue keeps pace with expenditures.
The latest step in the city’s protracted budget-writing process didn’t come without disagreement.
Mayor Jim Irish had laid out a 2.5 percent increase to the city’s cardroom tax. But representatives from the city’s gambling institutions balked at the ideal. They said the proposal amounted to a 25 percent increase in their taxes.
Currently, cardrooms pay a 10 percent tax on their gross income. So far in 2012, that tax has generated nearly $3 million in revenue for the city.
A revised plan Irish put on the table Wednesday called for an increase to be implemented in annual steps — a 0.75 percent tax increase spread over three years — but it gained little support among other councilors.
“Causing any hardship to any business at this juncture is foolhardy,” Councilor Al Luiz said.
Councilor Randall Williams agreed with Luiz, adding that a 2.5 percent tax increase would be “hard for any business to take.”
Under the plan , which called for a 12.5 percent tax rate for cardrooms by 2016, the city projected to see an additional $790,000 in revenue. Together, the utility tax and the sewer fee increase would generate an estimated $91,000 a year.
John Bockmier, a consultant who represents La Center’s cardrooms, said his clients would shoulder the majority of any tax levied on the city. He said increasing the tax rate on one type of business was not an answer for the city.
“The reason your revenues are down is because our revenues are down,” Bockmier told councilors.
Irish said the city needed to increase its sewer costs to bring users’ bills in line with the actual cost of services, as opposed to subsidizing the system from the city’s reserve fund.
Other cities, including Ridgefield and Battle Ground, have already implemented utility taxes.
La Center’s tax proposals come as the city falls about a week behind on passing its annual budget. The state requires budgets to be completed by the end of the year.
The city is expected to pass a budget at a special meeting Wednesday at 7 p.m. at City Hall.
Tyler Graf: 360-735-4517; http://twitter.com/col_smallcities; firstname.lastname@example.org.