Speaking of Blogs and Budgets

On the previous post, regarding the effectiveness of Kitsap Sun blogs (and this one in particular), Bob Meadows complains about the way some articles on the Kitsap Sun’s home page have more hang time than others, which seem to be playing hide and seek.

Bob, I’ll forward your comment to editor Lloyd Pritchett, as well as the comments about wanting posts to go up immediately like they do on stories.

In the meantime, here’s the link to the story on the county budget. Bob sought this sucker out and made two comments on it so all that is now part of the archive on this blog (which is another purpose the blog serves, since items are searchable by categories I assign, unlike the home page).

Today, I filed a story on Port Orchard’s budget hearing, but it’s not up yet, so I’ll paste it below.


PO Council Holds Hearing on 2008 Budget

Parking Garage Plan on the Back Burner for Now
By Chris Henry
chenry@kitsapsun.com
PORT ORCHARD
Nearly a dozen citizens braved Monday’s storm-induced havoc to attend a public hearing on the City of Port Orchard’s preliminary 2008 budget. Mayor Kim Abel said that was more than have shown up in past years, even with favorable weather.
The $25 million budget is up from $21.7 million in 2007. Taxes on new construction, including the soon-to-open Lowe’s Home Improvement store, will add to the city’s coffers.
The budget includes a $475,000 line item for the purchase of property across from City Hall that will provide additional office space as the city expands, said Abel.
One item that was removed from the budget was $35,000 to complete planning and preliminary design for a downtown parking garage. The city this year spent $50,000 to have Art Anderson & Associates develop schematics for six site options.
Gil Michael, a resident and member of the city’s planning committee, spoke out against the 2008 expenditure on a parking garage, saying the need for such a structure has not been thoroughly documented, a step he said should come before the planning.
“Where is the evidence that for a town our size that a parking structure is needed, that it works, that it brings the economic vitality we’re searching for as a city?” said Michael, who also objects to the proposed property purchase.
Michael said, especially in light on Monday’s storm flooding of downtown businesses, a higher priority for the city should be improvements to its storm water system, which the city is now mandated to phase in under the state’s Growth Management Act.
The reason the $35,000 was reassigned within the budget, however, had to do with the mayor’s recent veto of a 5 percent admissions tax ordinance. Income from the tax would have netted the city around $80,000 a year.
Abel said she would support a modified ordinance if the revenue from movie theaters and other entertainment venues would be designated for youth activities. The council is considering the modification and will vote on the revised ordinance at their Dec. 10 meeting.
In the meantime, in order to balance the budget, the council replaced the $35,000 into its property tax reserve fund, earmarked for capital improvements. They returned another $40,000 to that fund by declining to purchase a bucket truck.
Money in the property tax reserve fund is generated from a decision the city made in 2006 to access some of its unused taxing authority, known as “banked capacity.”
When a taxing district takes a lower percentage of increased property tax than that allowed by law, they can “bank” the difference for future use. The city’s banked capacity became available as a result of an earlier merger of its fire services with Fire District 7.
In this year’s proposed budget $250,000 of revenue from the property tax reserve fund will be used to underground utility wires in the downtown area.
Earlier this month the council passed a $1.59 million property tax levy ordinance. The ordinance came after the state Supreme Court found I-747 unconstitutional, but the council, like other Kitsap jurisdictions, decided to stay within I-747’s 1 percent increase (exclusive of new construction). On Nov. 29, the state legislature reinstated the rules of I-747.
The council will vote on the budget Dec. 10. The preliminary budget can be found on the city’s Web site at www.cityofportorchard.us. For more information, call (360) 876-4407.

5 thoughts on “Speaking of Blogs and Budgets

  1. This weekend I read an article in which the Kitsap County Sheriff’s Office was bemoaning budgetary cuts. And then I came upon this document whereby our county salmon recovery officials are proposing $40 million in recovery projects over the next THREE YEARS for the EAST HALF OF THE KITSAP PENINSULA. According to the document, $25 million is to come from local sources. View the document here: http://www.sharedsalmonstrategy.org/watersheds/3-year08/EastKitsap.pdf

  2. Blue Light – Thanks for your comment. Our environmental reporter Chris Dunagan is not at his desk. I will forward your comment to him and see if he knows the source of the local funding. I’ll also see what I can find out from the county.

    Chris

  3. Bob – It appears this post did not come through on the list of comments to be approved. My apologies. I will post it here on your behalf and alert our Web editor, again, to the problem of missing posts. Please e-mail me any other entries that have not yet been posted.

    Here’s what Bob had to say about my PO Budget story. Note his comments about what I called “banked capacity.”

    The article on Port Orchard’s budget stayed up, but no “conversation” started. I guess people just don’t have much to say about taxes and budgets.

    The comment I posted regarding the increases in the city’s property tax after being annexed into the fire district is something that people ought to know for more than one reason.

    First, it is something that may impact Bremerton taxpayers, if their city follows the lead of Poulsbo and Port Orchard and annexes into a fire district (or joins a regional fire protection district). The city’s levy lid is measured in dollars, and it would stay the same after the annexation — making it possible for the city to go back to its “highest prior levy” as quickly as its maximum tax rate allows.

    The residents of Poulsbo and Port Orchard didn’t know this when they voted to approve the annexations into the fire districts, so far as I can tell.

    Second, when people are ranting about the increases in their tax bills, it sure would be nice if they had a clue which taxing districts did it — and how they did it.

    Taking off after every taxing district with a scattergun isn’t necessarily the best thing to do, although there are times when it seems the only way to get the attention of elected officials is to treat them as one group.

    Third, when people (like Eyman and some Republicans) advocate the elimination of “banked levy capacity,” it is critically important for everyone to understand what it is — and the Port Orchard tax increases did not involve “banked levy capacity.”

    “Banked levy capacity” is not simply the difference between the levy lid and the current year’s levy. It is levy capacity which has not been used in previous years. When annual increases are less than the maximum allowed, the difference is “banked” for later use as needed.

    When Port Orchard’s annexation into the fire district became effective in 2003, Port Orchard had already used all its levy capacity. In both 2001 and 2002, the city’s tax rate was at its maximum, and there was no “banked levy capacity” from previous years.

    In 2003, the city gained an increase of 17 percent in the amount of property tax revenue available for things other than fire protection. Rather than pay a large part of its revenue to the fire district under their contract for fire protection, the city was able to keep all its revenue — and the city’s residents began paying the fire district separately. Although the city’s levy dollar amount went down because of its new tax rate, the amount was 17 percent more than the city had left in 2002 after paying the fire district.

    The loophole in the levy laws kept the city’s levy lid at the dollar amount it had been, so the city was able to increase the property tax as quickly as the maximum tax rate allowed until the current year’s levy amount was back up to what it had been in 2002. The increase from 2002’s net after paying the fire district ($789,616) to the levy in 2007 ($1,509,652) is 91 percent. That’s big, and it’s not from using “banked levy capacity.”

    Those increases weren’t made possible by restraint shown in previous years. That is, they didn’t occur because of “banked levy capacity” created by previous years’ increases which were less than the maximum allowed.

    True “banked levy capacity” is a good thing, in my opinion, since it means the taxing districts don’t have to “use it or lose it.” They can preserve some of their levy capacity for later via the “banked levy capacity” concept.

    When they do “bank” it, the tax payers don’t experience as big an increase as they otherwise would — until, of course, it is eventually used.

    As Port Orchard and Poulsbo demonstrated, even the absence of a “use it or lose it” situation doesn’t always lead to restraint. They both could have left the windfall from the fire district annexations alone, or raised taxes more slowly; but they both raised their property taxes quickly (with a pause by Port Orchard caused by ignorance of their actual levy lid, not by restraint) to get back to their “highest prior levy” dollar amount.

    If more people knew the history (including the reporters who have the opportunity to say, “oh, but didn’t you just raise taxes like that a short time ago?”), we might have a better public discussion.

    That is, if anyone actually cares about such things as taxes and budgets.

  4. Bob,

    The folks out in McCormick Woods might do well to pay attention to this max-tax mindset as the City woos them for annexation…

  5. As a resident of McCormick Woods and a participant in the community effort to assess the value of annexation I want to assure Jerry Harless that we are well aware of the tax implications we face.
    I’m no expert in taxation issues and wish not to venture into that swamp but I know enough to think we, as residents, have a better chance to control our destiny by aligning ourselves with a jurisdiction that gives us a stronger voice in the future.
    The numbers tell the story. The county has 134,081 registered voters and 72,147 voted in the last election. Port Orchard has 3,391 registered voters and 1,570 voted in the last election. The Woods has 1104 registered voters. From that point of view Port Orchard, where we will represent about 25% of the registered voters, looks like a good option to me.
    Based on an analysis of a typical home in the Woods each resident would see a slight reduction in current taxes. No one can predict with certainty what the tax future may be in any jurisdiction and there are circumstances where a tax increase is acceptable but I want the opportunity to have a strong voice in that decision. Annexation appears to offer that to me.

Leave a Reply

Your email address will not be published. Required fields are marked *

Before you post, please complete the prompt below.

Please enter the word MILK here: