By Alyssa Evans
Blaine City Council unanimously voted to approve a recommendation drafted by the city’s short-term revenue task force that details ways to generate revenue in the 2018 budget year.
Next, the draft will be brought to the Blaine Economic Advisory Committee for additional discussion on how to take action. The finance committee will also be involved in the process.
Unless the city takes action, Blaine will experience a fiscal shortfall in 2020, meaning Blaine’s expenditures will exceed revenues, according to the task force. The city is now operating using reserves and if the reserves are depleted, city services such as police officers could be cut.
The task force approved the draft recommendation at the end of May, after five meetings. The task force is the second step of the Strategic Economic Initiative, which was started in 2016 as a way to improve Blaine’s economy. The first step of the initiative was asking voters to approve a sales tax increase to fund street and trail projects, which was passed by 72 percent.
The additional sales tax won’t be enough to save the city’s budget. To hire a new police officer with no training, the cost is $93,392, according to Blaine city manager Dave Wilbrecht.
To pay for that officer’s salary, the city would need to add 13 new restaurants, which each would generate $7,000. If restaurants weren’t the direction the city wanted to take, 10 new retailers or 200 new homes could cover the cost of the one officer, Wilbrecht said.
To generate more funds, the task force recommends maintaining the current general fund revenue and avoiding adding a business and occupation tax or increasing utility taxes.
During a regular city council meeting on June 26, Blaine resident Eric Davidson, who was a member of the task force and is the current committee chairman of the Blaine Public Works Committee, spoke out against adding a property or utility tax as a way to increase property growth and business development.
“I think it’d be good for revenue long-term,” Davidson said. “If somebody puts in for a development today, it could be three years before we see any property taxes from them and we’re talking about paying bills now.”
In opposition to the task force’s recommendation, Davidson urged the council to consider a business and occupancy tax and to create an exemption for a midpoint of revenue such as $200,000, $500,000 or $1 million before a business owner has to start paying taxes.
“If you had a $500,000 revenue increase by paying a business and occupancy tax, the hairstylist, the accountant with a couple of employees, the landscapers – the guy or gal who owns a small business is not going to be too adversely affected by that,” Davidson said. “But the bigger companies may feel a bit of that.”
Davidson also suggested adding a “sin tax” to alcohol, cigarettes and marijuana as an additional revenue source.
The task force also suggested creating an “aggressive economic development program,” which could include an annual fundraising event such as a garage sale, working with the Port of Bellingham to improve Blaine Harbor and additional promotion of the city. Enhancing the city’s online presence and considering a review of city services were additional recommendations by the task force.
“We think all of the things have to be done,” Wilbrecht said. “You’re going to have to look at economic development initiatives, sales properties, taxes, all other kinds of things to manage and maintain levels of service.”