City Council decides against property tax increase for 2012

November 15, 2011

By Warren Kagarise

The still-struggling economy prompted the City Council to decline to increase the property tax rate for 2012.

In a Nov. 7 decision, council members decided against a possible increase and directed city staffers to prepare legislation to set the rate for next year. The council last increased the property tax rate in 2007 amid a stronger economy.

The unanimous decision is meant to hold the property tax rate at the 2008 level — $1.38 per $1,000 in assessed value. The council is poised to set the property tax rate at a Nov. 21 meeting.

The council adhered to a recommendation from Mayor Ava Frisinger not to increase the property tax rate for 2012.

“The fact that the council has not raised property tax for what — if this motion passes — for five years is a reflection of the fact that we understand that a lot of our citizens are having a lot of difficult times during the economic downturn,” Councilman Fred Butler said before the decision.

Instead, officials trimmed spending and reduced the size of city government to compensate for the decisions not to increase the property tax rate.

Roxanne Hagood, a representative from the municipal Finance Department, said sales tax revenue continues to increase from the nadir in 2009.

Overall, sales tax revenue encompasses 37 percent of the tax revenue collected by the city, followed by property tax revenue at 31 percent, utility tax revenue at 20 percent and business-and-occupation tax revenue at 11 percent.

“Basically, you’re having a lot of services in the city that are being paid for by people who come here to do business,” Councilman Mark Mullet said. “It really benefits the residents to continue to sustain that economic vitality.”

Overall, Issaquah homeowners pay, on average, about $11 in property taxes per $1,000 in assessed value to the Issaquah School District, King County, and numerous state and regional districts. The school district receives the largest slice at more than 40 percent.

State law allows Issaquah and other local governments to increase the property tax rate 1 percent per year.

Washington voters approved a Tim Eyman-backed initiative in 2001 to institute the cap. Courts later declared the measure unconstitutional, but state legislators reinstated the 1 percent cap in 2007.

Leaders did not rule out future increases to the property tax rate, especially if state legislators cut aid to cities or inflation continues.

“It’s not a lot of money this year, but over time, the inflation can really eat you,” Council President John Traeger said.

Warren Kagarise: 392-6434, ext. 234, or wkagarise@isspress.com. Comment at www.issaquahpress.com.

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