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Longview council rejects property tax hike, proposal to kill car tabs

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Longview street crews

In this 2017 file photo, Jeff Geier, left, Kaleb Carr, center, and Garrett Klein finish a large sidewalk patching job near the Longview Police Station on Hudson. They are members of the street crew added with revenue from Longview's Transportation Benefit District.

Despite difficulty finding money for five more police officers, the Longview City Council on Thursday unanimously voted to not increase the city property tax levy rate — an action which will cost the city about $93,000 in 2020.

But later in the meeting, council members rejected Councilman Mike Wallin’s attempt to immediately repeal the city’s $20 car tab fee after voters approved the statewide Initiative 976 this month.

Cities are allowed to increase the property levy rate — also known as the ad valorem tax — by no more than 1% each year. Following nearly two hours of testimony from Longview citizens regarding the city’s homeless problem, Councilman Mike Wallin proposed holding the 2020 levy rate to its 2019 level.

“We’ve heard pretty loud and clear from our residents that they’re feeling the pain and the pinch of the increased cost of living. Much of that is driven by government through the cost of taxation,” Wallin said.

Had the council approved the increase, the rate would have been $2.67 per $1,000 of assessed value. The increase would have cost the average homeowner an additional $6.97 annually, City Manager Kurt Sacha said.

Sacha said city staff created the 2019-2020 budget with revenue assumptions that included the ad valorem increase. The revenue lost as a result of the council’s action would be about $93,000 overall, enough to pay for one police officer. The council supports hiring five additional officers but so far the city has not found a way to afford the $500,000 expense.

“We just talked this evening about the many services that it takes to operate this government, and this is one of the small resources available to us to do that,” Sacha told the council.

Failing to raise the tax 1% will have a compounding impact, because the city can’t bank that taxing authority for future years. The law simply allows a 1% annual increase.

This year’s inflation rate is just under 2%.

Longview resident Nick Wells said he praised the city at a recent council meeting for underspending its budget this year. Citizens are tired of tax increases, he said.

“Yes it is $6 on an annual basis, but it’s $6 here. It’s $5 there. It’s $20 here, $100 there. That all adds up. We’re getting to a point where we’re really stretched,” Wells said.

Councilman Chet Makinster said he was “caught flat footed” by Wallin’s proposed change, but he supported it anyway because he doesn’t like taxes. However, he said the city will need to find a way to balance its $80.6 million two-year budget.

“I really believe we’re going to be heading into a recession in a few years, so we need to have ourselves in shape so we don’t get in trouble,” Makinster said. “Tonight a lot of people have been asking for things (like) building houses (for the homeless). In my opinion, the city can’t afford that stuff.”

However, the council later shot down Wallin’s proposal to immediately end the city’s car tab fee.

I-976, among other things, will eliminate additional vehicle license renewal fees that Longview has been using to fund street improvements to parts of 15th Avenue, Oregon Way and Nichols Boulevard. Longview receives about $615,000 annually from the fees, which finance the city’s Transportation Benefit District.

While the TBD is eliminated under I-976, Longview issued 20-year bonds in 2017 and 2019 for road repairs with the intention of paying them off with TBD funds. Because the bonds were finalized before the initiative passed, Longview officials have said the bonds are essentially grandfathered in, meaning the city needs to continue collecting the $20 fee until its obligation is paid off.

About 73% of voters in Cowlitz County voted for the initiative. It passed statewide with 55% approval, but King County and others are challenging it as unconstitutional.

Wallin said he was concerned about the reactions of residents when they see Longview continue to collect the vehicle license renewal fees next year. He suggested finding existing money in the budget to continue paying off the bonds.

City Manager Sacha and City Attorney Jim McNamara had uncharacteristically strong reactions to Wallin’s proposal.

“Tim Eyman (who circulated the initiative) has a horrible track record in his inability to draft a constitutional initiative,” McNamara said. “It might be premature to be repealing the fees in response to an initiative that may well be held to be unconstitutional.”

Sacha said the city made an obligation to bond holders that it would pay back their investment.

“This is not a ‘whoops,’ “ Sacha said, referring to the largest public bond default in U.S. history by the Washington Public Power Supply System, better known as “whoops” for its initials, WPPSS. “We are not going to default on those bonds. If we don’t have the resources to pay those bonds, it will be painful.”

The City Council had difficult conversations one year ago when it tried to cut one fourth of the Longview Public Library’s budget. Trying to find $615,000 annually to pay for the bonds would be much harder, Sacha said.

“I think we’d regret that as a community,” he said.

Councilman Scott Vydra, who supported Wallin’s proposal, said it is important to recognize the will of voters.

“I fully believe that the city has done the right thing and tried to use those dollars as efficiently as possible. But do we agree with the will of the voters and do we recognize that there’s an expectation, or do we tell them we know what’s best and keep opening your wallet and we’ll keep spending your money?” he said.

Mayor Don Jensen said he worries that a future economic downturn could force the city to layoff employees in order to continue paying off the bonds.

“That would scare the heck out of me,” he said.

Both Jensen and Vydra will be stepping down from the council after their defeat in the Nov. 5 general election.

Creating the TBD was one of the smartest things the council has done, Councilman Steve Moon said, because it ensured funds for future roads.

“For us to pull it out now, is ludicrous. We’re going back on our word,” he said.

Councilwoman MaryAlice Wallis, who typically is quiet during meetings, had the strongest reaction. She called I-976 a “mistake” and said Tim Eyman’s initiatives are “ridiculous.”

“People don’t understand the benefits of the monies that they pay to help our roads and then they complain about them,” Wallis said. “We work hard, our staff works hard to put that money to good use.”

A bond is a promise, she said, and “we need to stick to our promise.”

Wallin and Vydra were in the minority on a 5-2 council vote that killed Wallin’s proposal.

Also during the meeting, the council:

  • Held a public hearing and then amended the Six-Year Transportation Improvement Plan to include three new accessibility projects.
  • Awarded contracts to Cascade Columbia Distribution, Northstar Chemical and HASA, Inc., for water treatment chemicals such as sodium hypochlorite. The total estimated cost is about $117,000 — about $9,000 less than the projected 2019 chemical costs.

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