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‘Banked’ property tax hike considered

Struggling to fill a $1.2 million deficit, Island County commissioners are considering raising the county’s property tax levy by the amount former commissioners “banked” during healthy economic times.

But even then, the extra revenue would fill only a small portion of the budget gap.

During a budget meeting last year, Budget Director Elaine Marlow explained that the working 2010 current expense budget, with a $1.2 million shortfall, already assumes that commissioners will increase the current expense budget by 1 percent. That will brings in an extra $72,000 to county coffers from property taxes.

Under state law, the levy can only be increased by the lower of either 1 percent or the implicit price deflator (IPD), a measure of economic growth, unless there’s a finding of substantial need. This year the IPD is in negative territory, at minus 0.85 percent.

But Marlow explained that the commissioners could make a finding of substantial need to get the 1 percent increase. In addition, the current expense budget has $67,000 in banked capacity. That’s a levy increase that past commissioners didn’t adopt, but they banked so it could be used in a financial emergency.

Marlow explained that her projections for the 2010 county road budget also assumes that the commissioners will make a finding of substantial need and increase it by 1 percent.

The road budget has a much larger banked capacity of $270,000.

Marlow urged the commissioners to consider using the banked capacity of both levies.

“We are one of the few counties that does have banked capacity and I would hate to see you lose it,” she said, noting that initiatives-sponsor Tim Eyman is always up to something.

While the current expense and road levies are separate pots of money, there is some inter-mingling. The sheriff’s office receives about $500,000 this year from the road levy to support the work the deputies do to make the roads safer. The amount transfered to the sheriff’s office cannot be more than the actual cost of the deputies’ work, but Marlow said about $100,000 more could be transfered next year, for a total of about $600,000.

The commissioners also have to make a decision about the conservation futures levy, which finances the protection and purchase of property. They can make a finding of substantial need and increase it by 1 percent, or they can reduce the levy by the IPD.

All three commissioners spoke in favor of increasing both the current expense and the county road levies by 1 percent, plus the banked capacity. They directed Marlow to prepare ordinances which they will consider at a regular meeting.

The trio disagreed, however, on whether to increase the conservation futures levy. Commissioners John Dean and Helen Price Johnson spoke against an increase. Dean said he wanted to give the taxpayers a break; Price Johnson said she would have a hard time justifying a finding of substantial need.

But Commissioner Angie Homola argued that it wouldn’t be a good idea to let the levy split backwards. She said the commissioners should send the message that the program is as important as other programs.

In the end, the commissioners asked Marlow to prepare two resolutions for them to consider — one with a 1 percent increase and one with a 0.85 percent decrease.

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