Johnson says money for services should come from economic growth, not tax increases
Pullman Mayor Glenn Johnson said increased sales tax revenue would be a sure-fire way to decrease the city's budget woes.
"It is essential that we expand our sales tax base if we are going to sustain our current level of operations," Johnson said.
Johnson addressed the City Council and public Tuesday during his 2008 budget message.
His report was followed by a public hearing, during which city residents could comment on each department's preliminary 2008 budget request.
A final public hearing regarding the budget is scheduled for Nov. 27, with its adoption slated for Dec. 4.
As of October, Pullman is at the $50 million mark in building permit valuation, and single and multi-family permits have exceeded the number sought in 2006.
"This high level of building permit activity reflects the fact that businesses and residents are finding Pullman to be a very attractive community," Johnson said.
Johnson said he and city leaders are pleased with the construction activity citywide, including the WSU Compton Union Building remodel, the Martin Stadium revamp and the university's 18-hole golf course, slated to open in 2008. Pullman's construction has been strong as well, with the wastewater treatment plant work underway and the construction of the Pullman Transit storage facility.
In spite of construction activity, Johnson said 2008 will be another financially "challenging year." The city will need a substantial revenue boost in order "to sustain current operations without cuts in services or employees," Johnson said.
Johnson said the 2002 Initiative 747 limited property tax revenue - the city's largest source of general fund income. The initiative allows the city to increase property tax by only 1 percent each year, so "it is understandable why we are having difficulty in keeping pace with escalating costs."
Johnson said Pullman's per capita sales tax is $50.77, according to the state Department of Revenue, while the statewide average is $108.72. On the property tax side, the assessed valuation per capita in Pullman is $31,541, while the statewide per capita average is $104,913.
"We are only at 30 percent of the statewide average," Johnson said. "This is not a total surprise since our major local employer is Washington State University and it is property tax exempt. What these sales tax and property tax figures underscore is Pullman's challenge in trying to deliver desired services with such a limited tax base. We must seek to expand the economic base rather than raise taxes. That is why the growth of the local economy is so critical to our future."
Johnson said increased health care, cost of living and insurance costs are the main reasons for the budget strain. In order to balance the budget, $854,967 will be taken from the city's reserves, decreasing the savings percentage below the 13-percent target. The council approved the preliminarily budget at $43.3 million Tuesday - an increase of $1.84 million from the 2007 budget.
Johnson said there was no need to panic.
"We are confident we will be able to attain the 13-percent reserve target by the end of the year," Johnson said.
Finance Director Troy Woo echoed Johnson's optimism.
Woo said he has deliberately estimated year end savings conservatively, trying to make due with what the city has. That way, he explained, additional year-end savings are not desperately needed, but a pleasant surprise.
Wednesday, November 07, 2007
"Pullman mayor: The city needs to expand its tax base"
Keep preaching, Glenn. Maybe the idiot PARDners will drop their frivilous appeal one day. From today's Moscow-Pullman Daily News: