WHY WE SHOULDN?T RAISE PROPERTY TAXES IN REDMOND NEXT BUDGET
At Tuesday night?s City Council Meeting, Finance Director Mike Bailey outlined the state of the current Redmond budget as we passed the 75% mark of the biennial period. The highlights are that Redmond?s cash on hand position is $9.5 million better than projected for this point in time. Even excluding a $4.0 million sales tax special payment from the State, we are still well over $5.0 ahead of our own projections. This strong cash position is due to our recovering sales tax revenue, as well as property tax collections that are about $1.5 million better than projected. On the expenditure side, Mayor Marchione and his Director team are under-spending the budget by 7.63% (compared to 7.08% last quarter). The City Council is the most frugal department, under-spending its budget by over 23.5%.
Last week Mr. Bailey presented an analysis of overall economic trends which show a strengthening recovery, particularly locally. If sales taxes follow the economic trends, we should see significant improvement in our single largest revenue source. Unlike other cities in our area, Redmond continued to raise property taxes in each of the last four years of the great recession. In dollar terms it is not a big amount, but it is not the only tax increases our residents have had to pay, and it came during a time when real income was declining.
Looking at all this, there are three excellent reasons why we should not raise property taxes in the next budget.
First, we don?t need the added revenue. We are looking at a budget-end cash surplus approaching $12 million. This is the third cash surplus in three budgets. At the end of the last budget we added a new multi-million dollar reserve fund that puts our reserve capacity well above city averages in our state. At the end of 2008 we created an innovation fund to encourage more efficient service delivery out of that surplus. By contrast, increasing property taxes the allowed 1% raises just under a million dollars for the biennium. Our residents rate city service delivery at impressively high levels. Conservatism is a laudable virtue in budgeting, second only to accuracy.
Next, how a government considers its citizens is vital. Except for a small amount of development services, all of the general fund revenue comes from taxing the productivity of the community. There are easy rationalizations for tax increases: ?it?s not a lot of money? or ?other governments are raising taxes more?. The bottom line is that any government that puts its own needs ahead of those of its citizens is not worthy. Besides, the property tax is the only general tax within the direct control of the city.
Third, the budget will be structurally balanced without a tax increase. We did not need the property tax increase in the current budget to assure a six-year structurally balanced budget, nor did we need it in the previous one. The question is how do we use our current surplus to create the most sustainable benefits for our residents? We have spent the last two surpluses creating innovation funds and super-safe reserve levels. Now is the time to use our surplus outside of city hall, almost literally putting it on the streets for the benefit of everyone.
My suggestion is....(please read the newspaper edition for Mr. Myers's?closing remarks).?
Hank Myers
Redmond?City Councilmember
P.O. Box 7151
Bellevue, WA? 98008-1151
(425) 892-4820
Source: http://redmondcity.blogspot.com/2012/07/why-we-shouldnt-raise-property-taxes-in.html
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