"I-695 effects: City eyes staff cuts, tax hikes"
July 3, 2008 · Updated 12:20 PM
"Oak Harbor officials say they dont know how theyre going to balance their budget now that Initiative 695 has passed.Employee lay-offs, service cuts, and the possibility of bringing a couple of dead tax increases back to life are all on the table.While the initiative cuts the Motor Vehicle Excise Tax down to a flat $30 fee for car owners, it decimates the states sales tax equalization program, which provides funding for sales tax poor cities.That means Oak Harbor will lose $800,000 in revenue from its $8 million budget next year and over $1 million in the years after.At the Tuesday night City Council meeting, Councilman Richard Davis said that a combination of budget cutting and tax increases will be the best bet for Oak Harbor.We need to re-examine all the alternatives, he said, adding that Patty Cohen, the recently elected mayor for the year 2000, might be able to help the city make decisions about the budget process.As he promised he would, Davis asked to have a proposal to raise utility taxes by 6 percent and start a new 0.2 percent business and occupation tax brought back before the council at the Nov. 16 meeting. The council rejected the new tax and tax increases, which was proposed by the city administration, before the election. Given that Councilmembers Paul Brewer and Rex Hankins who both won reelection promised not to raise taxes during the campaign, it might be tough to get the tax increases passed the second time around.In fact, Davis said he was politically threatened by a local business person who is opposed to the business and occupation tax, which businesses would pay on gross sales amounts.I was threatened tonight with a recall petition if I present this, he said, which really surprised me because I have to represent everyone in the community.On the other hand, no possible cuts have been identified in the budget yet. City Supervisor E.T. Silvers has predicted that such programs as DARE, parks and recreation, and the senior center respite program will have to be cut, along with up to 15 employees.But no matter what they choose to do, the City Council probably wont be making any friends.At the meeting regarding raising taxes, the council was mobbed by angry business people and real estate agents who argued that the taxes would be detrimental to local businesses and make housing even more unaffordable than it already is.On the other side, the council was also mobbed on another day by a group of nearly 50 city employees who argue that services should not be cut and the city simply cannot function if it lays off employees.Members of the fire department were particularly vocal is saying that budgets are already stripped to the bones and that cuts or lay-offs will greatly compromise safety."