Kent Mayor Cooke proposes property tax hike for next year

Kent Mayor Suzette Cooke made one last pitch to the City Council to raise property taxes.

Cooke, in her 12th and final year as mayor as she decided not to seek re-election, proposed during her annual budget message Tuesday to the council that it raise property taxes in 2018 to bring in about $2.3 million per year to help cover an anticipated general fund budget gap as expenses grow higher than revenues.

“To close the gap this year, I am proposing to use the city’s banked property tax,” Cooke said. “The increase in our property tax will balance the proposed general fund budget and provide much needed, ongoing resources for city operations. While raising taxes is never easy, the increase for a Kent resident with property valued at $300,000 will result in a $37 increase in annual property taxes.”

If the council approves the increase, that property owner would pay an estimated $424 in 2018 compared to $387 without the tax jump.

Kent has about $5 million in banked capacity because the city reduced its property tax levy by $1.00 per $1,000 assessed valuation in 2011 after voters in 2010 approved the formation of the Kent Fire Department Regional Fire Authority (now Puget Sound Fire), which levies a property tax of $1.00 per $1,000 assessed valuation.

The use of banked capacity allows the city to raise property taxes above the 1 percent annual state cap imposed by Initiative 747 approved by voters in 2001. The council used general fund reserves last year for the 2017-2018 budget rather than using the banked capacity as Cooke proposed. The council approved use of the banked capacity as part of the 2015-2016 budget, which dropped the banked capacity amount by about $1 million.

The council will begin budget deliberations at a Tuesday, Oct. 17 workshop. The council is expected to vote on the budget adjustment on Dec. 12. Residents can testify about the budget at a public hearing at 7 p.m. Oct. 17 at City Hall.

Cooke didn’t propose any other additional taxes or fee increases in her budget adjustment.

“My 2018 proposed budget continues to fund current city services and programs at their current level, adjusted for necessary increases for inflation, workload, and labor cost changes and contract requirements,” the mayor said.

One of the largest budget expenses in 2018 is about a $1.2 million increase in medical insurance rates paid by the city. Cooke said the city has experienced a significant and sustained increase in medical claim costs, putting the balance in the Employee Health &Wellness fund in jeopardy.

Another large jump is in salaries. The council earlier this month approved salary increases to non-represented city employees that will cost about $465,000 next year.

While not part of Cooke’s budget proposal, she strongly urged the council to begin work on raising the warehouse square footage tax, a component of the business and occupation tax, to bring in about $3 million annually for capital and major maintenance projects in the park system.

Cooke also wants the council to place a police and criminal justice measure before voters in April to increase the city’s utility tax to 8 percent from 6 percent on cable, electricity, natural gas and telephone bills.

“Doing so would generate approximately $4 million annually and would provide enough funding to fully staff our city’s police department and allow for additional prosecutors, public defenders, court clerks, police records clerks and corrections officers necessary to support a larger police department,” Cooke said. “With the police staffing and workload crisis, I urge the new mayor and council to place the measure on the April ballot, which will require your affirmative decision in February.”

The mayor said the square footage fee increase and utility tax hike are needed to help the city prepare for its fiscal cliff, which refers to the city’s expected losses in state funds.

Kent is expected to lose in 2020 the $4.7 million it receives each year from the state for the Panther Lake annexation in 2010. The city also could lose as soon as 2019 the estimated $5 million per year it gets from the state (streamlined sales tax mitigation) to help compensate for revenue lost when legislators changed the state in 2008 from an origin-based system for local retail sales tax to a destination-based system, gutting the tax revenue the city received from its large warehouse district.