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11/28/2012 12:32:00 PM Email this articlePrint this article 
City Council raises property tax
Kacie Thrift
Staff Writer



Cashmere residents will see an increase in property tax for the upcoming year as the city council tries to balance out the general fund for the 2013 budget.

Recently, the Cashmere City Council discussed authorizing the general property tax levy, and levying the general taxes for the city of Cashmere for the fiscal year of 2013 on all property. This property includes real, personal, and utility property in Cashmere subject to taxation.

The interest in authorizing a tax levy came about after the city staff considered the anticipated financial requirements for 2013, and the amounts necessary and available to be raised by taxes on real, personal, and utility property.

The City Council held a public hearing on Nov. 13 to consider revenue sources to balance next year's budget. A levy for property tax seemed to be one of the better solutions to the council to raise revenue for the General fund.

The last time the city of Cashmere increased property tax was in 2009. Jones said the city is allowed to increase the property tax by 1 percent each year. This generates about an extra $5,000 a year for the city budget.

Cashmere Mayor Jeff Gomes and council members discussed the disadvantages to not authorizing the levy.

"What I understood is you actually lose a little bit [of money] by not taking it each year," Gomes said.

This concerned Councilman Jim Fletcher.

"So do we penalize ourselves by saving our tax payers money?" asked Fletcher.

Cashmere Treasurer Kay Jones told Fletcher and the other council members by trying to save the tax payers money the city does get penalized. After the public hearing, the City Council decided the city will levy the general taxes to help the city of Cashmere's budget. There will also be an addition of revenue to the increase resulting from the addition of new construction and improvements to property and any increase in the value of state-assessed property.

Councilman John Bryant made a motion to approve the authorization of the levy. All members were in favor except for Councilman Skip Moore. The council approved to take the 1 percent tax levy and the three years of banked levies.

The ordinance for the tax levy states, "The regular property tax levy, plus a 3.77 percent increase over the levy from the previous year in the amount of $19,542.93, plus the maximum dollar amount allowed under the provisions of state law for new construction and improvements to property and any increase in the value of state-assessed property and any annexations that have occurred and refunds made, is herby authorized for the 2013 tax levy on all real, personal, and utility property authorized for collection in 2013."

"You would think it would be a 4 percent increase instead of 3.77 but it doesn't work that way," Jones said. "It doesn't compound because we didn't take it in the previous years."

The City Council estimated the city will collect around $563,031 in property tax in 2013. The levy will assist in covering the gap in the Public Works fund for the 2013 budget. Without the levy, the Public Works fund would be balanced if the transfer for capital savings is not included. With the $200,000 for capital savings the fund is out of balance by $91,385.

By law, the city council can approve a 1 percent increase in property tax each year. Jones said the council used to be a able to approve a 6 percent increase each year. Since the 1 percent increase only generates about an extra $5,000, Jones said it's almost useless to include the increase. However, this year it will generate close to an extra $20,000 since they are including the three years the city didn't levy the increase in property tax.

Jones said there are other factors that can impact the amount the city receives in property tax. If an evaluation goes up on a home the incoming money to the city for property tax increases but if the value on a home goes down then the incoming money to the city from property tax decreases.

The City Council also approved a 4 percent increase in utility tax to help close the gap in the general government fund. This utility tax will generate approximately $120,000. The city staff's ultimate goal is to have annual expenditures for operations and maintenance and the capital savings not exceed current year revenues. According to council policy, capital expenses can come out of reserves if necessary and approved in the budget.

Jones said with the utility tax increase for the General fund and the property tax increase for the Public Works fund, city staff will not need to find more revenue for the 2013 budget.

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



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