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Kent mayor proposes new B&O, cable taxes; cuts 20 jobs

Kent Mayor Suzette Cooke. - COURTESY PHOTO
Kent Mayor Suzette Cooke.
— image credit: COURTESY PHOTO

Kent Mayor Suzette Cooke presented her 2013-14 proposed budget Tuesday night to the City Council that includes a new business and occupation (B&O) tax and a cable television utility tax.

Cooke also announced the elimination of 20 jobs by Nov. 1, including eight current employees and 12 vacant positions as the city struggles to balance its budget. Two of the vacant positions are police officers.

"A B&O tax is a tax I hate because it's a tax based on gross revenue and not income and that does not make sense," Cooke said to the council at its workshop. "But I'm also limited in the revenues I can call upon to balance the budget."

Businesses already pay a state B&O tax. Other cities, including Seattle and Bellevue, charge the tax. Cooke said it's time for Kent to charge the tax as well as opposed to cutting more city services and employees.

"I will not accept cutting to the point that we cannot provide people in this city a living environment that is safe and that they are proud to call home," Cooke said. "The cuts I was looking at without implementing a B&O tax were unacceptable."

Cooke told the council a strong financial plan with new taxes needs to be adopted.

"Without new revenues we will win a race that I refuse to participate in and that is a race to the bottom," Cooke said.

Council members will review and discuss the proposed two-year budget of $321 million starting at a workshop on Tuesday. A public hearing on the budget is set for 7 p.m. Oct. 16 at City Hall. The council will vote to adopt the budget on Dec. 11 after it goes to the council's Operations Committee on Dec. 4.

"This is the first set, we are not done with this discussion," Council President Dennis Higgins said.

The B&O tax would start in 2013 and bring in about $6.9 million per year. Cooke proposed using $4.2 million to pay for street repairs, $500,000 to park facilities, $1 million to the capital improvement program and $1.2 million to the general fund.

The city would charge businesses a rate of .00050 on manufacturing and retail and .00200 on services and wholesale. The first $150,000 of gross revenue would be exempt.

Council members asked city staff to also give them the Kent Chamber of Commerce B&O tax proposal when they meet Tuesday to discuss the new tax. The chamber proposal would raise about $5 million per year with all of the money designated for streets.

Cooke also wants a 6 percent tax on cable television bills. That tax would raise about $1.3 million per year and help pay for  information technology staff as well as computer hardware and software. She said neighboring jurisdictions assess the tax and Kent should as well.

Despite the new revenue proposals, the mayor said she still needed to cut 20 jobs to lower expenses. She said 82 positions have been cut since 2008.

"We know the public typically wants to see government cuts but cuts come with consequences and in this budget those will be felt particularly in public works, police and parks," Cooke said.

The cut jobs include a human services coordinator, arts program coordinator, custodian, police administrative assistant, police records specialist, two public works maintenance workers and a public works engineering technician.

The vacant positions eliminated include two police officers, police evidence custodian, legal secretary, public works engineer, custodian, human services administrative assistant, parks maintenance worker and a court judicial specialist.

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