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I-695 could impact proposed city's budget

"According to those opposed to the incorporation of Silverdale, Initiative 695 could throw a wrench into projected revenues for a new city.It could even force residents of a new city to vote on every tax and fee imposed by a new city council – even hold-over taxes like retail sales tax that are already levied by the county, according to Ron Templeton of the anti-incorporation group Save Our Silverdale.Richard Sheak of Citizens for Silverdale, which supports incorporation, disagreed with that assessment at an Oct. 6 forum sponsored by the League of Women Voters.“I don’t believe (I-695) would have any impact whatsoever,” Sheak said.Templeton estimated that the initiative, which would make car license tabs a flat $30 fee and would require a plebiscite to approve any governmental tax or fee increase, would cost a new city of Silverdale 10 percent of its projected budget.According to the Kushlan study, a report prepared for the county by an independent contractor which examined incorporation in detail, “state-shared revenues” that a new city would have access to would total $744,023 for 2000. Given the projected city budget of more than $8.1 million, that indeed is nearly 10 percent of the budget.The “state-shared revenue” to which the report refers, however, also includes other state taxes and fees unlikely to be directly impacted by I-695. They include gas taxes, profits from state-run liquor stores and other fees.Of more import to Templeton was I-695’s less-publicized tenet: that any new or increased tax or fee would be put before a vote of the public. According to Templeton, a Silverdale attorney, that means Silverdale voters would vote on each of the state’s new revenue sources, from sales tax to property tax, including every building fee in between.Reached after the forum, county Budget Manager Ben Holland agreed, though he said I-695 raises so many logistical questions that it is hard to predict how it will be interpreted. It appears Silverdale voters would have to approve at least the city-imposed property tax, he said.According to Templeton, the existing state sales tax law allows the state to levy a 6.5 percent sales tax. It also gives cities and counties the option of levying new taxes. That means, according to Templeton, that a city sales tax would be a new tax, and subject to a public vote.“There isn’t an automatic sales tax available to the city (only to the state),” Templeton said. “It (a city) has to first take advantage of the power the state has granted to it, the power to levy a sales tax. Therefore, that’s a new tax and the people would have to vote on it.”Bert Cole, who is spearheading the pro-incorporation group Silverdale 2000, disagreed with Templeton. In a Thursday phone interview, he explained that the one percent of sales tax the county assesses will be redistributed between Silverdale and the county if incorporation occurs. “That (Templeton’s assertion) sounds like a convoluted fabrication. These are taxes that are already levied today ... the county’s role in tax collection doesn’t change with incorporation. It’s all whether these taxes go into county coffers or city coffers.”Sheak, for his part, didn’t think a public vote was such a bad thing.“I don’t see having more control for the people as being a problem,” Sheak said.And while the city waited to see if voters approved a “new” sales tax (the city’s sales tax would likely be at the same rate currently levied by the county) the new city government would have operating capital available through loans. The process for acquiring those loans, Sheak said, is laid out in state law. “The city isn’t going to start out broke,” Sheak said."

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