Post by Admin on Jan 9, 2017 10:57:59 GMT -8
Newcastle News / Jan 5, 2017
The City Council has just completed a contentious 2017 budget process — a process that normally begins with estimates on revenues and proposals for expenses for next year. If agreed-upon expense requirements exceed expected revenues, then additional sources of incomes are considered.
This year the cart came before the horse and along with it came emotional pleas, condemnation of past actions and even threats from passionate residents. There was a premature, ill-advised vote on a utility tax before 2017 expenses were established. Posts of half-truths and misinformation were provided on internet vehicles, such as NextDoor, by supposedly “people in the know.” As it turns out we will not have to raise taxes for 2017.
The passion of some of our residents against any new tax revenues made me consider the long-term fiscal viability of Newcastle. Since incorporation in 1994, Newcastle has had three primary sources of revenue: property tax, sales tax and development revenue. The city portion of the property tax (about $950 on a $500,000 valued home) may only rise by 1 percent per year by state law, or $9.50. Sales tax stays fairly constant and generates $800,000 per year. Development revenue varies greatly from year to year and, since the city is pretty much built out, will be dropping.
The cities around us (Bellevue, Renton and Issaquah), along with unincorporated King County, have all taken advantage of taxing authority provided by the state and have utility taxes, transportation benefit districts, franchise fees, levies, admission taxes and bonds. Newcastle has been able to exist for 22 years without any of these. With the upcoming increase in population of 30 percent, the 5-plus percent yearly increase in fire and police costs (partially based on population and assessed valuation), and a growth in city staff to accommodate the increased number of residents, new revenues are required in order to balance the budget on a year-by-year basis. There is an operational reserve of $1.8 million for unexpected events, but the goal should be to balance yearly without using the reserve.
Due to the fervor of some residents against any new taxes, we have a dilemma. Without new taxes, we are not viable long-term. If we are not viable, we have to unincorporate and return to King County. Then we would be hit with all of those new taxes. Neighborhoods could petition to be annexed into Bellevue or Renton. They might approve some areas, but not others. Either way, residents would be hit with new taxes. They would also be a much smaller fish in a big pond rather than the situation of today.
As an elected representative, I do what the majority of our residents want and will follow direction. I do believe we are better off by staying a city. Most of our residents chose to live in Newcastle, and not in Bellevue, Renton or Issaquah. We will need some new revenue sources going forward, and by staying a city we can control what and how much they are.
What do you think?
The City Council has just completed a contentious 2017 budget process — a process that normally begins with estimates on revenues and proposals for expenses for next year. If agreed-upon expense requirements exceed expected revenues, then additional sources of incomes are considered.
This year the cart came before the horse and along with it came emotional pleas, condemnation of past actions and even threats from passionate residents. There was a premature, ill-advised vote on a utility tax before 2017 expenses were established. Posts of half-truths and misinformation were provided on internet vehicles, such as NextDoor, by supposedly “people in the know.” As it turns out we will not have to raise taxes for 2017.
The passion of some of our residents against any new tax revenues made me consider the long-term fiscal viability of Newcastle. Since incorporation in 1994, Newcastle has had three primary sources of revenue: property tax, sales tax and development revenue. The city portion of the property tax (about $950 on a $500,000 valued home) may only rise by 1 percent per year by state law, or $9.50. Sales tax stays fairly constant and generates $800,000 per year. Development revenue varies greatly from year to year and, since the city is pretty much built out, will be dropping.
The cities around us (Bellevue, Renton and Issaquah), along with unincorporated King County, have all taken advantage of taxing authority provided by the state and have utility taxes, transportation benefit districts, franchise fees, levies, admission taxes and bonds. Newcastle has been able to exist for 22 years without any of these. With the upcoming increase in population of 30 percent, the 5-plus percent yearly increase in fire and police costs (partially based on population and assessed valuation), and a growth in city staff to accommodate the increased number of residents, new revenues are required in order to balance the budget on a year-by-year basis. There is an operational reserve of $1.8 million for unexpected events, but the goal should be to balance yearly without using the reserve.
Due to the fervor of some residents against any new taxes, we have a dilemma. Without new taxes, we are not viable long-term. If we are not viable, we have to unincorporate and return to King County. Then we would be hit with all of those new taxes. Neighborhoods could petition to be annexed into Bellevue or Renton. They might approve some areas, but not others. Either way, residents would be hit with new taxes. They would also be a much smaller fish in a big pond rather than the situation of today.
As an elected representative, I do what the majority of our residents want and will follow direction. I do believe we are better off by staying a city. Most of our residents chose to live in Newcastle, and not in Bellevue, Renton or Issaquah. We will need some new revenue sources going forward, and by staying a city we can control what and how much they are.
What do you think?