Letters to the Editor

Letter to the Editor | Sales, B&O taxes are more equitable options

Posted on April 9th, 2024 By: Edward Nadler

Gig Harbor voters are being asked to approve a permanent levy lid lift on property taxes. We are told that there has been no levy increase in over forty years, that in the last decade our population has increased 65%, placing a strain on city services. We’re told that in the last decade the property tax rate has decreased from $1.40 per $1,000 of assessed value to $0.70 per $1,000 per assessed value.

We do not hear that since 2013 the city’s actual property tax dollar receipts have increased 43%. Nor have we heard that during this same period total General Fund Revenues increased 63%. Perhaps it is time to look at expenditures. While the money being spent on a consultant to educate voters on this tax increase is minimal, the mindset which approved this expenditure is not that of leaders striving to be responsible stewards of public money.

Initially the increase was needed to cover a $2 million shortfall, now we’re told the shortfall is $3 million. What will we be told next week? We’re told the shortfall will impact among other services, police and public safety, parks and recreation, street maintenance, community activities and support for small business. There are options available to the city managers other than raising property taxes.

The August 6 vote on a Public Safety Sales tax increase of one-tenth of one percent (0.1%) will raise $1 million for the city and will help to fully fund our police department.  We should support this sales tax increase.

Council members have stated that they are adamantly opposed to the city adopting a B&O tax.  These same council members have no qualms about increasing our property taxes.  The Finance Director has stated that a B&O tax that exempts small businesses would generate $1.5M to $2M!

If voters approve the Public Safety Sales Tax and Council were to adopt a B&O tax, as most municipalities in the state have done, Gig Harbor would realize an increase in revenue of $2.5M to $3M. Further, the city should actually implement an Economic Development Plan, rather than rezoning commercial properties to residential use, our commercial/business revenues would only increase. Relying solely on property taxes is a losing proposition, one that neither homeowners nor the city can afford.

Our current budget allocates $2.1M per year to parks and recreation, roughly 51% of this allocation is for payroll. Since 2013 the city’s total salary expense has increased 63% and with the adoption of Ordinance 1524, salaries are set to increase another 4.5%.  That’s better than the Social Security COLA.

Perhaps during discussions with PenMet Parks to find a mutually beneficial solution to policies pertaining to non-district participants, the Mayor and PenMet can consider Parks & Recreation Operating and Maintenance cost-saving measures that would benefit both the City of Gig Harbor and the Parks District. We’ve outsourced tourism activities to the Chamber of Commerce, why not partner with PenMet Parks, it makes a lot of sense.

Another option, is the Cultural Access Program Sales Tax, something the city should already have adopted. This is a one-tenth of one percent (0.1%) sales tax that benefits or expands access to nonprofit cultural organizations. These are the organizations which preserve our city’s charm, natural beauty, and historic heritage. Services that we are told may be at risk due to the forecasted shortfall.

Use Taxes such as Sales and B&O are more equitable options for funding city services, especially street maintenance. Given that our daytime population almost doubles, these taxes would spread the cost of services across all users not just residents of the city.  As we continue to expand our tourist footprint, tourism should help fund our city services.

Keep in mind that Proposition 1 is permanent!  It will increase the Property Tax Levy to $1.10 per $1,000 of assessed property value.  Council will have the authority to annually increase the levy so as to maintain the $1.10 rate.  All such increases will be at the sole discretion of Council, voters will have no further say in these increases.

Proposition 1 will increase the city’s portion of our tax bill by 57%!  We are told that the impact to our total property tax bill will be less than 5%.  I cannot speak for everyone, however, in the last several years my total property tax bill has increased over 79%!  That certainly impacts what can be spent on groceries and medications every month!  Adding to that burden is problematic.

I for one will Vote NO on Proposition No. 1, there are other options available, and our property taxes are already too high.

Edward Nadler

Gig Harbor

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