- About Us
- Local Savings
- Green Editions
- Legal Notices
- Weekly Ads
Connect with Us
City of Kent projects slight increase in tax revenue for next 2 years
Kent city financial staff project revenues from taxes and fees to continue to slowly trend up the next two years.
Revenues from taxes and fees are projected to increase 1.5 percent in 2015 compared to the 2014 budget, according to a May 20 report to the City Council from Paula Barry, interim finance director. Revenues are estimated to hit $99.6 million in 2015 compared to the 2014 budget of $98.2 million.
"Going into the 2015-16 budget cycle, we're taking a very conservative approach when we're looking at revenues," Barry said. "We've looked at trending and there has been a very steady growth in revenues and it's projected as we're moving forward that growth is going to continue at a very slow and steady pace as we've seen in the past."
Sales tax revenue will bring in an estimated $27.9 million to the city in 2014, according to city reports. The next highest revenue producers include $25.8 million from utility taxes and $20.5 million from property taxes. The business and occupation (B&O) tax ranks next and will bring in about $5 million.
Even though the increases are small, it's certainly much better than during the Great Recession when the council dealt with revenue shortfalls by cutting employees and programs. Barry said revenue projections for 2016 show a 0.8 percent increase from the 2015 projected budget.
Barbara Lopez, city financial planning manager, told the council that finance staff emphasized to keep projections in check.
"One of the goals of the conservative budgeting is so that at the end of the year that the norm is 1 to 2 percent over budget," Lopez said. "That's your goal at the end of the year to budget your revenue sufficiently so that you're still coming in over budget by 1 to 2 percent. We feel this conservative budgeting will get us to that particular point."
Council President Dana Ralph told Lopez and Barry that's a good approach.
"I'm thankful that's the way we are looking at things," said Ralph as staff starts to prepare the 2015-16 biennial budget. "We are not in a position to say, 'all better.' And as you pointed out in the beginning we have our fingers crossed on $8 million and we hope that continues to go in our favor but we don't have a lot of control over that."
Barry told the council earlier in the night that the sales tax projections include about $4.8 million paid annually to the city by the state to mitigate the streamlined sales tax as well as the $3.5 million per year paid by the state to the city for annexing the Panther Lake area in 2010.
City officials fear each legislative session that state leaders might take away those funds.
The streamlined sales tax measure passed by the Legislature changed the state in 2008 from an origin-based system for local retail sales tax to a destination-based system. That cost Kent a lot of tax money with so many businesses in the city that ship or deliver goods to other areas of the state. The sales tax is now collected where the buyer purchases merchandise rather than where the product shipped from.
"As you know as the state goes through their fiscal cycle those always become revenues we look at as being at potential risk as the state looks at their positioning," Barry said.
Sales tax revenues, including that $8 million, are projected to increase by 3.4 percent in 2015 compared to the 2014 budget, Barry said.
The city increased overall revenues by about $12 million from 2012 to 2013 because of a new B&O tax, a new cable utility tax, an additional internal utility tax as well as higher than anticipated sales, utility and real estate taxes.