Council to put tax hike for streets to the voters

By Meg Olson

Blaine city council is ready to ask voters if they’ll pay more taxes to keep city streets from falling apart. “One more time we’re upping everything, but the alternative is to leave the streets alone and let them fall apart,” said council member Marsha Hawkins at a July 8 city council work session.
Council and staff reviewed the recommendations of a committee that looked for ways the city can replace street maintenance dollars it’s lost since the state motor vehicle tax was eliminated, the city decided to stop collecting gambling tax and gas sales dwindled, meaning less tax dollars for local roads. “It’s not that we need more. We’ve lost what we had and people need to understand that,” said council member Bonnie Onyon.

The top two proposals from the street maintenance committee were to ask voters to approve a property tax increase and to pass the cost of street lighting to the electric utility. Other recommendations were increasing the gambling tax and cable television tax, instituting a business and occupation tax, or cutting city services.

By one or several of these revenue sources, the city needs to raise $275,000 a year to implement the maintenance plan council felt would best serve the city. The plan would be to maintain sidewalks and asphalt streets at the level recommended by the state and the paving industry but to not upgrade chipsealed roads to asphalt. The committee had recommended reducing maintenance on smaller city streets to the bare minimum, but council decided at an earlier work session that skimping on maintenance would be more costly than road reconstruction. “We’ll lose in the long run,” said council member Ken Ely.

Staff members presented council with a bundle of revenue streams that, taken together, would come within $10,000 of the money needed to keep up the streets. “It was suggested in our last workshop we look at a combined solution,” said city finance director Meredith Riley. The package included $34,000 saved by the street fund if the cost of electricity to light streets were absorbed by the electric utility. By making cable television subject to the same six percent tax charged other utilities instead of the current five percent franchise fee the city could collect an additional $8,000 a year, a cost staff anticipated cable providers would pass on to customers.

Most of the new revenue would come from a property tax hike. The city still has authority to collect an additional 15 cents a year for every $1,000 of assessed property valuation because they did not increase taxes by the legal maximum from 1997 to 2001. That could be collected after council approval and could generate $63,000.

The city will need to ask for voter approval to bump taxes up further than the anticipated one percent increase in the general fund, but they don’t have much wiggle room. After collecting the banked levy there’s only 38 cents per $100,000 of valuation left in taxing authority before they hit the $3.10 cap on regular taxes the state imposes on cities. “If we do this we’ll be maxed out,” Riley said. Voters would be asked to approve the 38-cent hike to generate $157,000 specifically for streets.

Mayor Dieter Schugt suggested an alternative was to leave the banked levy and ask for voter approval on the entire 53 cents per thousand dollars of property value. While the cost to taxpayers would be the same, he said, it would put more decision making power directly in voters’ hands. Assistant public works director Steve Banham said that would be more consistent with the intention of the street committee. “They felt the most important thing was to let the voters decide,” he said. “Some may feel there are other things that might be more important than streets.”

Mike Myers wondered why the city couldn’t figure out how to care for streets with dollars from the regular city budget. “The question is where will the revenue come from,” said city manager Gary Tomsic. “You’d have to reassess some programs.”

“If you try and fund street maintenance through the general fund we’ll have to cut positions,” Riley said. Wolf said that might be a more sensible alternative than letting streets regress back to chipseal if voters turn down a tax hike. “I think there are positions that can be cut without loss of service,” he said.

Banham pointed out the new maintenance levy would last until 2006, when the current 90-cent residential street levy expires. “At that time we could go for a combined levy that had money to build new streets but also to maintain them,” said Banham. He added that, had other revenue sources not been paying for maintenance in 1996 when the street construction levy was passed, that would have been included then. The issue now is to maintain the new streets built under that levy and other crumbling roads. “There’s a crisis here that needs to be answered,” he said. “Costs are continuing to escalate.”

Council will take a final vote on putting the levy lift on the ballot at their July 22 meeting, but consensus was the revenue was needed, but the best path was to put the full tax increase of 53 cents to the voters...

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