All political power is inherent in the people, and governments derive their just powers from the consent of the governed, and are established to protect and maintain individual rights.

Wednesday, December 1, 2010

City Government Hikes Taxation

The State legislature must have a 2/3rds majority to raise taxes (I-1053). But hyperactive local government marches on.

Lynnwood Council Boosts Taxes To Avert Layoffs by Lynn Thompson of the Seattle Times.

The Lynnwood City Council approved several new taxes Monday night to close a projected $22 million budget deficit for the 2011-2012 biennium and avert the layoff of up to 102 city employees.

A majority of the council said the new revenues, including higher property and utility taxes, were necessary to preserve the jobs of 25 police officers, 15 firefighters and other city workers.

"The message we heard was that people are willing to pay a little more as long as they know what they're buying. We've reduced the cuts in the Police Department from $9 million to $3 million and saved 25 officers' jobs," said council President Mark Smith. [Is Smith lost in a fantasy? According to official Snohomish County results, about 64% of the SnoCo vote favored reduced taxation. - Impolite]

But anti-tax activist Tim Eyman, who was on hand for the council's approval of new $20 car-tab fees as well as the other taxes, denounced the measures as a "tax-hiking rampage" that ignored voters' message in the November election.

"Taxpayers are totally tapped out and can't afford any more taxes. Governments need to stop taxing and spending and start prioritizing and reforming," he said.

Even with the new taxes, Smith said that about 25 city employees will likely be laid off in January in order to cut $10 million in spending for the biennium and put the city budget on a more sustainable basis. The city had been heavily reliant on sales-tax revenue, which dropped $4.6 million in 2009.

A final budget must still be approved by the council before Jan. 1. The city is also negotiating for wage concessions from its unions.

A state audit released in October criticized elected city officials for spending millions in reserves in 2009 without raising new revenues or cutting services. That left the city with a negative general-fund balance in 2009.

In its meeting Monday night, the council agreed to raise property taxes by 11.5 percent. That means the owner of a $250,000 house will pay about $90 more next year.

It also approved an increase in utility taxes to 6 percent from 4 percent. Residents will see bigger bills starting in January for water, sewer and storm drains. The increases for electricity, gas and cable television go into effect in April.

The council also approved an increase in the city's business-license fee from $15 per employee to $85, over the objections of the local business community. Jean Hales, president of the South Snohomish County Chamber of Commerce, said imposing new taxes on an "already overburdened public" did not address the city's long-term financial picture in which liabilities — including employee pensions and benefits — continue to outstrip revenues.

Councilman Ted Hikel, who with Jim Smith cast no votes on the hikes in property and employee taxes, said that while the new revenues likely preserve most of the threatened jobs in the city, the plan isn't sustainable in the long run.

"Two years from now, when we fall off a cliff, there will be nothing to do but lay off an extraordinary number of people or adopt a B&O [business-and-occupation] tax, which is the worst possible option," Hikel said. "We've maxed out all our available taxes."
When the People of Washington State voted, they made it clear they were taxed enough (I-1053 & I-1107 were enacted). I suspect the People would have added they are restricted and regulated enough too. Perhaps we will get to the bottom of the problem and stop government from providing all the extra restriction they lay on us that they call $22 million in "service."

But, gee, aren't police and fire protection worth it? Lynnwood suffers from the same malfeasance as other Washington State cities: The actual public servants -- the people on the line -- are the first to be cut from the payroll. The staffers who make the bureaucracy top heavy are never threatened at all. This must change. Hold your city government accountable.

1 comment:

  1. Councilman Ted Hikel, who with Jim Smith cast no votes on the hikes in property and employee taxes, said that while the new revenues likely preserve most of the threatened jobs in the city, the plan isn't sustainable in the long run.

    ReplyDelete

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