Port Orchard Council to Reconsider Tax Ordinance

By Chris Henry, Kitsap Sun
Posted November 18, 2009 at 12:01 a.m.

PORT ORCHARD —

Port Orchard City Council members who earlier this month voted against a 1 percent property tax increase said they’re willing to consider an ordinance setting the 2010 levy at the same level as 2009.

The proposal, hammered out at a work study meeting Tuesday, will come before the council Nov. 24. It will include a provision for “banking” the allowed 1 percent increase for a possible future tax increase.

Without the ordinance, the amount the city could collect would shrink, because of the shrinking economy, to 99.2 percent of the 2009 levy amount.

On Nov. 10, the council voted 4-3 against an ordinance that would have increased the city’s total property tax collection to 101 percent of what it collected in 2009. Voting against the measure were Jerry Childs, Jim Colebank, Fred Chang and Fred Olin. Voting for the measure were Carolyn Powers, John Clauson and Rob Putaansuu, all on the finance committee.

The tax hike would have cost property owners less than a penny per $1,000 of assessed value, or $3 per year on a $300,000 home.

But Mayor Lary Coppola did not take no for an answer. He convened a meeting with Treasurer Allan Martin on Friday to “educate” the no voters. Olin declined to attend.

Until this year, the council could take the 1 percent without a vote. But with annexations, the population has grown over 10,000, triggering new rules for setting property tax levies.

Clauson said the city’s 2010 budget, even with the 1 percent increase, would have been lean. Spiraling health care costs and pension contributions weigh heavily on the general fund, about half of which goes toward salaries and benefits, he said.

The council on Tuesday reached consensus on a compromise that would allow the city to tread water for 2010. Olin was home with the flu.

“I don’t feel like we’re raising anybody’s taxes, so I’m ready to go with the 100 percent,” said Childs, who also is on board with banking the 1 percent increase.

Colebank, too, has changed his position.

Under state law, taxing districts that forgo an allowed tax increase in any given year can apply it in the future. The provision was meant to discourage a use-it-or-lose-it mentality, Martin said.

Kitsap County Assessor Jim Avery said the provision had a greater impact before Tim Eyman’s Initiative 747 in 2001 limited annual tax increases to 1 percent of the previous year’s total property tax amount (not counting the amount due from new construction).

“Some districts did have a lot of banked capacity, and they probably lived off it for a number of years after the Eyman initiative,” Avery said.

The council, with seven members, needs a majority plus one to pass the tax ordinance. Powers will be out of town on Nov. 24. So the outcome of the vote, as Putaansuu noted, could be determined by “the Fred factor.”

Chang at Tuesday’s meeting said he supports keeping the levy at the 2009 level, but he wasn’t ready to commit on the “banked capacity” provision.

Olin said on Wednesday said he’s always favored maintaining the 2009 levy amount. But he will vote against the banked capacity.

“To me all it’s telling our citizens is we’re not going to charge you now, but we’re going to reserve the right to charge you later,” Olin said. “That’s not the message I want to give our citizens.”

Both provisions will be included in a single ordinance, making it an all-or-nothing vote.

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