City Council sinks property tax increase, prepares budget
November 13, 2012
By Warren Kagarise
City Council members decided Nov. 5 against a property tax increase for next year, and edged the 2013 municipal budget closer to adoption.
In a unanimous decision, council members rejected a proposal to increase the property tax rate by 1 percent next year. The council is expected to finalize the decision on property tax revenue for next year at a Nov. 19 meeting.
In October, Mayor Ava Frisinger proposed to raise the property tax rate by the maximum amount allowed under state law, or 1 percent, next year. Officials said the measure could raise $69,707 for the city next year and then compound over time. The city estimated the cost to the average homeowner at $4.75 per year.
Under the existing rate, homeowners pay about $1.20 per $1,000 in assessed value in city property taxes.
Issaquah City Council regular meetings
Issaquah homeowners pay about $12 per $1,000 in assessed value in property taxes. The overall figure includes the $1.20 per $1,000 assessed value for city property taxes. Other than the sliver in city property tax revenue, most property tax dollars go to the Issaquah School District and other local and state government entities.
“This is a very tough issue,” Councilman Joshua Schaer said before the decision. “I’ve lamented quite often that our taxes and fees as homeowners always seem to go up. We’ve had sales tax increases in our region over the last several years. We’ve had levies that we get to vote on and quite often get approved.”
The council last increased the property tax rate in 2007 amid a stronger economy.
“Some municipalities go with the 1 percent as a safeguard against the future, but I think that we have weathered the worst of this recession without having to use the 1 percent due to a lot of smart decisions in the past as a city,” Council President Tola Marts said before the Nov. 5 decision. “I’m not really inclined, now that things are starting to get better” to increase the rate.
The city is expected to collect more than $7 million in property tax revenue next year without the tax increase.
In a Nov. 5 presentation to the council, Deputy Finance Director Diane Marcotte said the city relies on multiple sources for funding, such as sales tax revenue, and license and permit fees.
The proposed $35 million general fund encompasses the dollars used to fund police and fire services, community development and planning, parks and recreation, and municipal government. The proposed property tax increase aimed to bolster the general fund.
The total proposed budget for next year — including dollars for capital expenses and from other accounts — is $89.5 million in the plan Frisinger sent to the council.
The proposed spending plan maintains existing water and storm water rates for Issaquah customers, but the amount residents pay for sewer service is due to increase, after a King County decision to hike the rate.