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11/21/2012 4:18:00 PM Email this articlePrint this article 
City Council raises utility taxes to balance the budget
Kacie Thrift
Staff Writer

At the start of the new year, city residents will be paying an extra 4 percent in utility taxes on garbage, water, and sewer services.

Recently, Cashmere city staff and council members have been going over the 2013 budget. City staff has been recommending the council approve a 4 percent increase in utility tax to cover a shortage in the budget mainly due to public safety.

City staff told the council a 10 percent tax on water, wastewater, and sanitation would generate approximately $120,000 or more for the General Government fund.

Without the utility tax increase, the General Government fund would be out of balance by $117,865 if the transfer for capital savings is not included. With the $100,000 for capital savings, that number increases to $217,865. The Law Enforcement contract, RiverCom contract, and the increase in the regional-jail fees increased the budget for 2013 for public safety by $105,539.

Kay Jones, Cashmere treasurer, said she recently checked with the City Attorney Chuck Zimmerman if the city council could also approve a tax increase on telephone services but Zimmerman told her telephone, gas, and electricity can't have more than a 6 percent tax without a vote of the people.

"I have been under the assumption electric is the only utility set at a maximum 6 percent with a vote of the people but actually telephone is too. I thought we might be able to include telephone in the utility tax increase but it's under that maximum 6 percent," Jones said.

Councilman John Bryant asked if city staff had approved a utility tax on telephone service of more than 6 percent before. Kay said the city has never charged more than a 6 percent utility tax for telephone services.

The Cashmere council members discussed the increase in utility tax for garbage, water, and sewer services and decided the increase to 10 percent is necessary in order to balance the 2013 budget.

There is no limit on how high the city can make the utility tax for garbage, sewer, and water. Jones said some cities have a 28 percent utility tax.

In order to provide the level of services, the city staff determined, after exploring all reasonable methods for reducing costs within the budget, an increase in revenue is necessary.

The ordinance for the tax increase states city staff, mayor, and council members have studied potential sources of additional revenue for the city and determined the most equitable manner of increasing city revenue in an amount sufficient to meet city revenue needs is by increase the utility tax by 4 percent.

Before approving the ordinance to increase the utility tax, council members discussed how much money on average this will cost each household.

"If the average bill is around $150 and it goes up 4 percent it will be a about $156 so that's $72 a year increase for an average home," Bryant said.

Councilman Skip Moore said he is for the utility tax increase, because unlike other taxed services or items, utilities are something people can moderate. He said the idea behind the tax increase is it is something a person can moderate. People can do things to maintain a certain level of utilities.

"We have reached a level of city services for what we are doing. We can't cut our way out everything and this is something the public can control somewhat. It's not like your property value," Moore said.

Moore made a motion to pass the tax increase and all other council members agreed.

Kacie Thrift may be reached at 782-3781 or reporter@cashmerevalleyrecord.com.

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