Is this the time for the biggest tax increase in city history?
October 21, 2008 · Updated 4:14 PM
El Jahncke and Mike Cero
In the Nov. 4 general election, in addition to national and state candidates and another huge Sound Transit tax proposal, you will have the opportunity to vote on what the city’s finance director has confirmed as the largest tax increase in Mercer Island city history. The city is presenting you with a $12 million bond and a $900,000 levy for parks and recreation. Actually, when one includes the $7.4 million interest on the bonds’ 26-year life, the total cost to Mercer Island taxpayers is $19.4 million. That is on top of the $900,000 levy which increases each year for the next 14 years. If the City Council continues its normal practice of raising property taxes each year, the total cost to Island taxpayers over the life of these bonds and the levy will be in excess of $33 million.
In light of the recent unprecedented disruption in the world’s credit markets, a near crash of our stock markets, which will be causing at least a serious recession, this does not seem to be the best time for an enormous increase in Island property taxes.
Our taxes provide necessary services for the community: schools, parks, utilities, police, fire, roads and other services. We endorsed increasing our sewer tax because of the unacceptable risk in not replacing the northwest line. We endorsed the schools’ tech levy because of the school district’s critical need to upgrade its services. We do not support the proposed city’s Park and Recreation Bond and Levy.
Unlike the sewer lake line and unlike the school tech levy, we do not feel that the projects identified in this bond and levy are critical in maintaining our wonderful parks and fields for future generations. On the contrary, this levy/bond establishes poor policy by financing Luther Burbank’s operations and maintenance (O&M) as a special levy instead of through the general fund. Bonds and levies should be reserved for capital projects, not O&M. We are not ignoring the demands of our parks and recreational fields. The present Luther Burbank levy does not expire until Dec. 31, 2009. In the past year, the city has spent more than $1.5 million at Luther Burbank Park and almost $1.1 million on ballfield improvements.
The projects financed by the bond are good projects, but they are not time-critical projects. Given the unprecedented disruption in financial markets, the city, not withstanding its excellent credit rating, will pay an exceedingly high rate for these bonds.
What other tax increases are in store for next year? According to the Seattle Times, if the Sound Transit proposal passes, it will cost $69 per person every year. In addition, local utility rates will increase next year as follows: water, 10.5 percent; sewer, 13 percent (after an 18 percent increase last year); storm water, 5.5 percent; and emergency medical service, 4.5 percent, as well as the recently approved school tech levy.
Now, when the entire world is deleveraging (reducing debt) as we head into a likely severe recession, it hardly seems the best time for the largest property tax increase in city history.
As Mercer Island City Councilmembers, we voted “no” in bringing these propositions to the voters. As citizens of Mercer Island, we are voting “no” at the ballot box and are encouraging you to do the same.
Mike Cero and El Jahncke are members of the Mercer Island City Council.