One of the most powerful phrases in the English language these days is "tax hike." Few word couplings can generate such fear and consternation among the populace, and woe be to the politician who dares to utter those words in succession.So, we're quite certain that a proposal brought forth last week by the Vancouver City Council has raised some hackles. The council is considering a 1 percent increase in the property tax levy and is expected to pass the hike at Monday's meeting.
Now, before the virulent absolutely-no-tax-increase crowd gets too worked up, let's take a look at what this actually means. According to an example used by City Manager Eric Holmes, the owner of a property assessed at $200,000 would have paid $634 to the city's general fund in 2013. Because property values have been increasing, the tax rate has been declining; if that home is assessed at $217,000 this year, the owner will pay $640 to the general fund in 2014 — an increase of $6. The city's general fund, which is $351 million for the 2013-14 biennium, is derived from property taxes, utility taxes, and sales taxes, and the increase to the property tax levy would bring in an additional $419,000.
As Councilor Jeanne Harris said, "Save the bombastics for the big stuff." We agree. This proposed tax increase hardly qualifies as big stuff.
Yet at the same time, we encourage city government to remain vigilant in examining where costs can be cut. Since 2008, Vancouver has cut staff positions by about 20 percent in the face of The Great Recession, and the city's 2013-14 biennial budget was down about 12 percent from the level of the 2009-10 budget.
Times have been tough for everybody, in both the public and private sectors, but a 2012 study by Portland State University's Center for Public Service demonstrated that public employees on average are more expensive than those found in private industry. The study, which used data from 21 municipal governments in Oregon and Southwest Washington and included Vancouver and Clark County, found that for each hour a public employee works, the true personnel costs equal approximately twice the rate of salary. Also in 2012, the U.S. Bureau of Labor Statistics reported that private-industry employees cost an average of $28.80 an hour in total compensation, while state and local government employees cost an average of $41.10 per hour.
Benefits, rather than salary, are the primary reason for the difference, and until governments take firm steps to get benefits under control and bring them more in line with private industry, the public is going to consider the phrase "tax hike" to be anathema.
That being said, the city's proposed increase in property taxes appears to be reasonable. Councilor Jeanne Stewart pointed out that the hike would provide money for firefighter positions that currently are covered by grants set to expire next year.
While many people are staunchly anti-government these days, the fact is that municipal governments are essential for providing a thriving and civilized place for residents. By building and maintaining roads and providing public safety, they do, indeed, generate essential services. Those services have been somewhat hamstrung by property-tax limits in Washington, which cap increases at 1 percent annually.
If Vancouver does approve such a hike and does, indeed, use the additional money to maintain services in the realm of public safety, then a small increase in the property tax levy will help make the city a better place to live.