DuPont fills budget gap with new taxes, fees

Business, Government, News 6 3

The DuPont City Council adopted its 2013 budget by a vote of 7-0 during the December 11 regular council meeting.

Included in the 2013 budget are increases to business license fees, utility taxes, a new business license fee for rental property owners and the adoption of a square footage B&O tax. New fees and a recent boost in the city’s Capital Projects Fund allowed the proposed 2013 budget to preserve a police officer, fire fighter and a public works maintenance worker position. The 2013 budget does not have funds to save three fire fighter positions that are currently being funded by a SAFER Grant, which expires in April 2013.

“This is a budget that is piecemealed together by taxes. I don’t like it, but the council had no other choice after the levy failed,” Councilman Mike Courts told South Puget Sound News after the meeting.

Councilman John Ehrenreich described the budget as balanced, while Councilwoman Penny Coffey said she doesn’t think the revenues are sustainable and they are again kicking the can down the road.

The utility tax rate on the water utility would increase from 11 percent to 12 percent. The tax rate on the storm water utility would increase from 8 percent to 10 percent. This would generate approximately $33,600 in additional annual revenue for the city’s general fund. The rental housing business license is tiered based on the number of rental units operated by the person or business within the city. The new revenue generated will fund a permit technician position to strengthen economic development by expediting permitting processes for new development. The fees will generate approximately $78,000 annually.

The city’s business license fee was increased from $50 to $75 and added two additional fee tiers based upon employee counts. These changes will produce an estimated $20,000 in additional revenue to the General Fund.

The square footage tax would apply mainly to businesses engaged in warehousing activities. The tax is designed to impose a business tax on businesses that owe little or no tax under the city’s existing business and occupation tax. Only businesses operating in facilities over 20,000 square feet would owe the tax and businesses would be able to offset the new square footage tax by the amount owed under the existing business tax. It is estimated that the new square footage tax will generate approximately $225,000 per year in additional revenue. The council said they will revisit the square footage tax in 2013. Intel raised some concerns over the square footage tax in a letter it sent to the city on  Monday, Dec. 10.

One last item introduced to the budget was the establishment of a transportation district, which would allow the city to impose a $20 vehicle license renewal fee on vehicles registered within city boundaries. The license fee would generate approximately $115,000 per year. A second reading of the transportation benefit district ordinance will take place at the January 8, 2013 council meeting.

“This is essentially a user fee, but it’s not an equitable tax,” commented Councilman Ehrenreich. “You have to register your vehicle in this state, and with DuPont having many military families living here who don’t register their vehicles in Washington, not everyone who lives here will be paying this.”

Earlier in the meeting, Mayor Michael Grayum sent a message to council asking them to re-direct lower priority resources, such as maintaining parks and greenways, to fund public safety to the best extent possible. In addition to the new fees and taxes being implemented, the mayor is calling for a continuation of reductions to exempt staff salaries and maintain the freeze on exempt staff wage increases.

“None of these proposals are ideal, and not all of them are long-term solutions, but given our current economic situation and fiscal obligations, we must get back to the basics,” said Grayum.

 

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6 Comments

  1. Tom Colegrove December 12, 2012 at 9:51 am - 

    No mention or discussion about a possible mineral extraction tax? Lumber extraction tax? Raising of admission tax rates? Why is it these topics are taboo? Could somebody help me understand why these options are not on the table?

  2. RealDuPont December 12, 2012 at 2:13 pm - 

    Maybe DuPont should implement a Teriyaki tax.

    • billyjack December 12, 2012 at 5:49 pm - 

      How about a $20 admission to the museum? That would bring in another $200 a year.

  3. RealDuPont December 12, 2012 at 2:15 pm - 

    How about a tax on any car with a DoD sticker? That way they won’t double dip on non-military renters. Of course, my Teriyaki tax would also disproportionately affect military too.

    • Whatpartofno January 10, 2013 at 6:17 pm - 

      Seriously, metered parking in the downtown business area with permits issued to city residents who pay the Transportation District Tax and permits issued to all others who pay a twenty dollar fee. Everyone else, pay at the parking spot. More revenue for the city with fees and fines,

  4. Whatpartofno January 9, 2013 at 5:40 pm - 

    An anonymous source revealed that City Council is also considering implementation of a “Rain” tax. This will be collected to offset revenues lost by residents who stop watering their lawns to avoid the 12 percent tax on traditionally delivered water supplies. Usage and tax liability will be determined by the square footage of residents property boundaries multiplied by the official rainfall within City limits, as measured by National Oceanic and Atmospheric Administration.
    In a related move, spearheaded by a member of City Council, the Teriyaki tax was voted down as being discriminatory and punitive.
    Also under consideration is a future tax to punish those who renew their license fees early to avoid the new TBD tax. B&O taxes were waived for businesses that employ or are owned by members or family members of the taxing authority.

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South Puget Sound News is the local news source for DuPont and Steilacoom. We report on and share news regarding local schools and businesses, government and politics, non-profits and the people who make this a great place to live. South Puget Sound News is owned by C.E.M. Communications, L.L.C.