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Oak Harbor eyes 1 percent annual property tax hike

With Oak Harbor facing its first budget shortfall in years, the City Council is gearing up to vote on its state allowed 1 percent annual property tax hike later this month.

The proposal is anticipated to add $37,460 to city coffers in 2011, according to Oak Harbor Finance Director Doug Merriman. While that number pales in comparison to the city’s entire 2010 $84.6 million budget, the increase is only really relevant to the general fund — the pot of money that pays for city services ranging from public safety to parks.

It’s the same fund that Merriman is predicting will decrease by at least $426,000 in 2011. That number should stay constant over 2012, but could increase by $268,000, for a total of $694,000, if state liquor Initiatives 1100 and 1105 pass in the November general election.

The proposal was introduced to the City Council for discussion this past week at its Oct. 5 meeting. Few council members expressed objections, despite the prevalent anti-tax climate in Island County.

City Councilwoman Beth Munns said the 1 percent increase in property taxes cities and counties are allowed to collect each year, without a vote of the people, is necessary to keep up with inflation and the rising cost of services.

Even if the city declined to adopt the increase, it would only be putting off a need for necessary funds. At some point, the city would have to ask for that money; this just makes the burden easier to bear as it will be spread out over time and not all at once, she said.

“The fact is I’d rather take small incremental steps,” Munns said.

City Councilman Jim Campbell asked how or if the proposal is linked to a 1 percent increase from the county. Merriman said they are completely separate. The only relationship is that all property taxes, no matter who they benefit, are mailed to the Island County Treasurer’s Office.

Under the current breakdown, less than one-third of an Oak Harbor resident’s total bill comes back to the city, he said.

“For each dollar you send to the county, about 30 cents goes to the city,” Merriman said.

In a later interview, Campbell said he had no problems with the increase. Not only is it a cost of doing business item that all Oak Harbor citizens should help out with, but the 1 percent hike works out to a paltry sum, especially when divided by the city’s population of over 19,000, he said.

“Yeah, it’s a raise of taxes, but it’s not a heck of a lot of money,” Campbell said.

The council voted 5-1 to put the proposal on its Oct. 19 agenda for consideration. City Councilman Scott Dudley voted against the motion because he said the council hasn’t even seen the city’s full revenue picture yet, making it too soon to know if a tax increase is truly warranted.

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