McDonald adds info on B&O tax proposalSeptember 5th, 2012 by Steven Gardner
Following up on Wednesday’s story about the Bremerton City Council’s move to (eventually) kill off the city’s B&O tax, City Council President Jim McDonald contacted me Wednesday to provide updated information I didn’t have. We were unable to speak on Tuesday, otherwise this would have been in the story.
McDonald was the one backing the 2.5 percentage point credit option, having it go up 2.5 points a year. He’s now backing off. City staff had argued the credit complicated tax collections, an issue that was pointed out in the story.
What McDonald would propose now is an automatic 20,000 rise in the exemption floor every year. “You actually have to take action to not implement it (each year)” he said.
McDonald had opposed the exemption rise before because inflation would reduce the benefit over time if the exemption were not continuously raised by the council. Making the rise automatic addresses that point.
If the city were actively trying to annex beyond current boundaries, the tax would be a hindrance, McDonald said. Where that would likely come into play is south towards Gorst, he said. The city has built sewer infrastructure in that area. The Wheaton corridor north of Riddell, while it could probably generate enough sales taxes to make killing the B&O possible, is not on the radar. Much of that area is in an urban growth area, but is not affiliated with any city.