News

Vote would hike sales tax

By JESSIE STENSLAND

Staff reporter

Island County Commissioner Mac McDowell wants to give county voters the chance to raise sales tax by a fraction to help finance the emergency 911 system, and at the same time, aid the county and Oak Harbor with dire budget problems.

The Oak Harbor Council voted to go along with McDowell’s proposal Tuesday night, but the plan may be a hard sell to the county’s fire and hospital districts, whose approval is necessary to get the measure on the ballot.

The state legislature recently passed a bill that allows organizations such as I-COM, the county’s emergency 911 system, to put a measure on the ballot asking voters to consider a one-tenth of one percent sales tax. On a $10 purchase, it would add an additional penny in sales tax.

“All we are doing is allowing the voters to decide if they want to tax themselves,” McDowell said.

Based on sales tax figures from 2001, the tax would generate somewhere in the neighborhood of $591,000 a year.

The question is how to divide it up. Under the method supported both by the county commissioners and the Oak Harbor council, the money would be divied out on a per capita basis. That would mean the county and the island’s three municipalities would share the money, but the hospital and fire districts — which also pay for I-COM — would get nothing.

Under this proposal, Oak Harbor would receive around $147,000 and the county would get more than $424,000. That’s about a quarter of the county’s $2 million shortfall for 2003.

Langley and Coupeville would get the rest of the money.

The county, cities, fire districts and hospital pay for I-COM based on the number of emergency calls each generate. The county, for example, pays about $546,000 a year; Oak Harbor pays about $332,000; and Fire District 2 pays $28,000.

To put the proposed sales tax increase on the September ballot, McDowell would have to get approval from all three municipalities, the hospital and all four fire districts.

McDowell admits that it may be a “hard sell” with the fire districts, seeing as they don’t get anything. The sales tax money could be divided up by another method in which the fire districts and hospitals get a share. It could be split, for example, based on the percentage of the I-COM budget each entity pays.

In Oak Harbor Tuesday, Councilman Richard Davis argued that the sales tax money should be divided according to “point of sale” or where the sales tax was collected. Under this proposal, Oak Harbor would get much more of the tax money since most of the island’s businesses are in the city.

Then Davis, who seemed to be in an argumentative mood, reversed himself and argued that the fire districts should get a portion of the money, which would reduce what the city and county receive. “It may be worthwhile to give up a percentage to get something,” he said.

Yet McDowell defended his proposal. He argues that since the state didn’t set up a way to split the tax up, it should be done the way the same way the similar criminal justice tax is divided — which is per capita.

Also, fire districts and hospitals historically aren’t funded by sales tax revenue.

Perhaps most importantly, McDowell points out that the hospital and fire districts aren’t suffering from budget shortfalls the way the county and cities are. The county is facing a $2 million deficit next year because of the effects of Initiative 695 and cuts in state funding.

McDowell said he or another commissioner will be meeting with the towns, fire districts and hospital board over the next week. He will probably know by June 13 if there’s the unanimous support needed to put the measure on the ballot.

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