Utility tax approved by SeaTac Council despite citizen opposition

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by Jack Mayne

Despite pleas from citizens that the imposition of a gross utility tax would be harmful to residents living on fixed incomes, the SeaTac City Council approved it 5 to 2 at Tuesday night’s session (Oct. 28).

The two members voting against the tax were Councilmember Pam Fernald and Terry Anderson.

The tax proposal was revised from earlier versions by eliminating public water and sewer district because they are non-profit public companies that under state law are exempt from such taxation.

No other way
After a long hearing on the measure at Tuesday’s meeting, the chairman of the Council subcommittee who hashed out details said all other ways to balance the coming 2015-2016 biennial spending program was with new revenue.

Councilmember Barry Ladenburg said even after all the comments from the citizens, “the reality is the only way we are going to get there is with this utility tax.” He said cuts in the budget have been made but it would have to be “very serious cuts” to avoid imposition of the utility tax. He and Councilmember Tony Anderson and Pam Fernald were on a committee to consider all of the objections and proposals.

“Yes, this is tough, we need to put this tax into place.”

Ladenburg noted the 1 percent limit on property tax increases was wrong with an economy expanding at around 3 percent.

Deputy Mayor Tony Anderson, speaking by telephone from Washington, D.C., said this is difficult and that the has avoided this utility tax for 20 years.

Other’s tax utilities
“Other cities have had this tax for 20 years … and had millions of dollars we haven’t had,” Tony Anderson said.

Even with the cuts proposed by citizens, the city would still be “a couple million dollars short,” he said. “It is a little disingenuous that making these simple cuts here and there is going to take care of a multi-million dollar shortfall.

The big factor in the budget, said Anderson, former mayor and retired Port of Seattle police commander, was the cost to the city for police and fire protection.

“They are well over half the budget and I don’t think we should be cutting public safety at this time. I am not going to support making any cuts in senior services.”

He said the cap on property tax income at 1 percent does not make sense with other costs going up 3 percent or 4 percent a year.

Councilmember Pam Fernald said she didn’t want her comments to be negative, but, “I did not vote for the (contract with the Kent Fire Authority) because I knew this was going to happen.”

Cost of that contract increased city expenses by a half million dollars, city staff said.

Fernald said the city is well known to be poor city, so we “really need to trim and we need to work leaner.”

No more to give
“The citizens, including me, have no more money to give,” she said.

She said she did her own “unscientific poll asking citizens what would you like to see cut in the SeaTac budget in order to have no higher taxes?”

She said she got 155 anonymous responses and the highest number was for cuts in Councilmember expenses and then for cuts in city staff. At a budget work session, she said City Council expenses “didn’t even show up for us to consider” cutting.

Councilmember Kathryn Campbell said the tight economy “isn’t specific to the current Council, but to the environment we are living in.” She said the restricted income to the city due to the cap on property taxes and the economy has been known since 2008. Everything has gone up and it is difficult to save, she said.

“Maybe something someone wants to cut, somebody really depends on and maybe something they want to cut, you really depend on,” Campbell said.

She said everyone should work together on the budget and running the city.

Councilmember Dave Bush said the city staff has worked to keep finances under control, “there are positions they haven’t filled – they are looking to cut wherever they can.”

Bush said he wanted to put the utility tax in at 3 percent in 2012 but “nobody wanted to put it in and now we have got to do 6 percent. Those who can pay will get hit the hardest and those who can’t will be hit less hard.”

City knew of problem
Finance Director Aaron Antin told Council that in 2012 the city projected a $4.3 million deficit for the 2015-2015 biennial budget but decided then not to impose a utility tax at that time, nor make budget cuts.

Then, in June this year, Antin said the Council was told the projected budget deficit was $5.5 million.

“So, for 2015-2016 we are proposing a 6 percent utility tax,” Antin said. Projections make that a $14 million deficit by 2018, including a built in three-month reserve.

He said the city got to this state because revenues have remained stagnant or even decreased in some cases, that property taxes are capped at 1 percent per year and “this is outstripped by the annual cost increase to provide service,” much of it because of staff salary increases and health insurance hikes.

The finance director said the “cost for fire services increased $500,000 more through contract with Kent Regional Fire Authority, than if the city had fully funded our own department” – even though “long-term savings” are projected.

Antin said the proposed budget cuts expenditures by $910,000, increases fees by $900,000 and projects the utility tax to net $5.4 million although that would decrease wen the council backs of imposing the tax on water and sewer districts following complaints and threats of lawsuits because public districts are not liable for such taxes.

A parade of objectors
Matt Everett, general manager of Highline Water District, told the SeaTac City Council he understood that the Council intended to remove water and sewer districts from the proposed 6 percent utility tax measure.

Everett said he wanted to reiterate that his district had good working relations with the SeaTac city staff and “wanted to continue that.”

Citizen Mike Lowe said low-income people “don’t have the money to pay this increase,” referring to a utility tax that would be passed onto ratepayer citizens. “If you actually let this tax happen, it is on all of your heads.”

SeaTac activist Vicki Lockwood said she opposed the utility tax and had sent to Councilmembers a list of “potential items” that could be cut from the pending budget to save money. The list totaled over $298,000 per year, she said.

“Hopefully you have decided that they were not all critical expenses and you will make some cuts to those items,” she said. “If you do, we do not need to implement a utility tax to balance our pending budget.”

Resident Roger Kadeg told the Council he believed cuts of “excess expenditures” that could be made to the budget that would let the city forgo a utility tax. He said retired people on Social Security have “over the last five years … have not even gotten an effective cost of living … increase, they have gotten a cost decrease.”

“Six percent to us is effectively like 60 percent or more to you folks,” he told the Councilmembers.

Ray Overholt, of McMicken Heights, said “there are needs and wants” and noted that Social Security recipients wanted a larger increase but will not get it next year, “yet the city insists on a 6 percent utility tax.” During budget debates with “more parks and trails sounds great” but the city seems to “blow off” costs of these items.

Pete Daigle lauded the SeaTac city staff and said he located his business in the city because of the staff. He said he is paying a “dust tax” that goes to the city general fund. The city needs to avoid new taxes, he said.

Former SeaTac Councilmember Rick Forschler hoped the current Council would pay more attention to him now than when he was a member, “but I have to try.”

Forschler said that before raising taxes, he said all other options should be tried, including competitive bidding on contracts “to reduce costs without raising taxes or reducing services … and when cities use competitive contracts wisely, they typically save between 10 percent and 30 percent. It is all about maximizing value for the people.” He urged the Council members to research whether some services can be done by outside contractors, “before raising taxes.”


6 Responses to “Utility tax approved by SeaTac Council despite citizen opposition”
  1. Mike Condon says:

    What do you know, more money taken from those that can least afford it. The rat pack known as SeaTac City Council, who did not get the $15.00 a hour for the port employees, is going to make them even poorer?? Next up a B&O tax on business to drive them out of SeaTac also.Who is going to pay these taxes when there is no longer any people or businesses in SeaTac??? I still remember the broken promises of Gregerson, Bush and Ladenburg on their flyers that portrayed them on playing cards, looks like in reality we the people and businesses, got dealt 3 jokes . Will the last one out of the west coast version of Detroit, turnout the lights!!!! Remember those millions that would come in to SeaTac with the wage increase, it would have covered the deficit, right Mia??????????

  2. Vicki Lockwood says:

    Fellow Citizens of SeaTac~
    I expect our Council Members and Staff to spend our tax money frugally every single day, and I hope each of you does, too. We citizens need to monitor their expenses and activities and provide feedback when/if we see unnecessary monies being spent . This feedback must be timely and continual to insure that a course correction is being made. If we ignore their everyday decisions and behavior, our apathy equates to approval and nothing will change. I urge everyone to stay engaged and to get involved. We hire and fire these folks with our ballots. You can see what Mia Gregerson has done to our City – don’t let her magnify the destruction by giving her a seat in Olympia!

  3. Erin Sitterley says:

    “Other cities have had this tax for 20 years … and had millions of dollars we haven’t had,” Tony Anderson said.”

    And, yet, somehow, until JUST LATELY, we have been able to survive as a city.

    Next year is an election year for the city council. Mia, Barry and Dave will all be up for re-election. Let’s do remember this latest blind eye move, ok?

  4. Janice Taylor says:

    On December 16, 1773, the Boston Tea Party began the chain of events that led to the American Revolution. The warring cry was “Taxation without representation.” Our Queen of Hearts on the SeaTac council, Ms. Gregerson, and her minions have not represented the citizens of SeaTac. They have continued to spend money the city does not have. They have lied, name called and bullied to force agendas and pet projects that have led to the disastrous financial situation the city now finds itself in. And in stereotypical form, Progressive Gregerson, et al., do not trim the excess fat and encourage business, but rob the taxpayers of their hard-earned money.

    Citizens of SeaTac, I think Council’s latest action should be our wake-up call just as the Tea Tax woke up our forebearers. We live in a Democracy, not the delusions of monarchy the majority of our council holds. (And blatantly campaigned.) Please do not think they were put in their positions by “the people”. Their seats were bought and paid for by outside forces with agendas far removed from the workings of our small city. Like the worst of the old European monarchs, they think their somehow “Divine Wisdom” is far and above we peon citizens. If we do not stop this, our city is doomed.

  5. jellybean says:

    They will ignore us and do what they want. They think they can do what they want and there is nothing we cando. They are wrong! It’s not over. They will be suprised and hit by something so big, it will change EVERYTHING. They won’t know until it’s to late. It’s coming, it’s just a matter of time… It will happen!

  6. seatac says:

    john wyble of winpower strategies has been manipulating seatac elections since 2010. this is the guy behind mia gregerson, kathryn campbell, dave bush, sally andrews, and dozens of other corrupt politicians and political action committees (PACs) always running smear campaigns: