Burien Council to Look for Ways to Offset Tax Losses at Monday Meeting


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Burien council members Joan McGilton, left, and Rose Clark.

by Ralph Nichols

Burien city council members will begin the laborious task of writing the city’s 2013-14 biennial budget at their monthly study session tonight (Monday, July 23).

Their efforts will be complicated by declining revenues and an unfunded federal mandate that likely will make a marginal tax increase necessary.

“There are good, solid reasons why we need to do this now,” City Manager Mike Martin told The B-Town Blog.

A primary factor is the police budget, which “is increasing at 4 percent a year,” Martin said. “It way outstrips everything else.”

While Burien “is not going broke by any means,” Martin said if steps are not taken now to offset losses in property tax revenue the city likely would face budget problems in two or three years.

“The City lost $467,000 in property tax revenues in 2012,” and is estimated to incur “another $300,000 in property tax loss” in 2013, City Finance Director Kim Krause noted in a presentation for tonight’s meeting.

This, Krause said, resulted from Burien losing “8.8 percent in assessed valuation” in 2012, “causing the City to hit its property tax cap of $1.60 per $1,000 in assessed valuation.”

Now staff is projecting “another $300,000 property tax loss” in 2013, which is “based on known assessed valuations” that will result in an anticipated 4.5 percent loss in assessed valuation.

And this is not a one-time dip. Even if “assessed valuation starts growing at 2 percent per year in 2015,” the city won’t return to 2011 property tax revenue levels until 2020, she added.

The new revenue forecast “assumes the council will levy the maximum” allowed under state law “each year until property taxes return to 2011 [levels] – this means that if [assessed valuation] grows by 2 percent, Council will levy a 2 percent property tax increase.”

Had assessed valuation in Burien “continued to grow rather than decline, the City would have collected an additional $5.5 million in property taxes from 2013 through 2018,” with $2.6 million of this going to the General Fund, Krause said.

Compounding the financial drain on Burien’s treasury are federal requirements that impose new federal requirements for surface water management and drainage control, which take effect next year.

The Drainage Master Plan, which was discussed at length at the July 16 council meeting, recommends a surface water management rate increase to offset the cost of the federal mandates.

Preliminary staff recommendations to the council to offset the decline in property tax revenues call for:

General Fund
A 6 percent franchise fee on the distribution portion of Seattle City Light rates, which would generate $1 million per year.

An increase in the electric utility tax from 3 percent to 6 percent; $90,000 per year.

Street Fund
Transfer the Solid Waste Utility Tax from the General Fund for $393,000 per year.

Increase the Parking Tax from $1 to $3 per transaction; $100,000 additional per year (the current tax generates $50,000 per year).

Surface Water Management Fund
A two-step rate increase – 12 percent in 2013 and 12 percent in 2015.

The cumulative monthly impact to Burien taxpayers would be an estimated $2.56 per month, plus electric utility tax increases that are different for Seattle City Light and Puget Sound Energy customers.

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Comments

12 Responses to “Burien Council to Look for Ways to Offset Tax Losses at Monday Meeting”
  1. Burien Citizen says:

    Welcome to Burien…anybody want to join our club?

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  2. Uh oh says:

    But this same manager will annex white center with over 50million in capital projects backlog without raising taxes???????? Come on folks wake the heck up

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  3. Loren says:

    If you want to increase tax revenue, vote against any liberal running for office for any position.
    Seattle and all of the towns in it’s vinicty are heading directly toward the same cliff that Detroit and California are falling off right now.
    It is so bizarre that so many people cannot see that liberal economic ideas are the death knell for any town, state, or country that adopts them.
    Demonizing and over taxing producers is idiotic and leads to burned out downtown cores and bankrupt cities and states.
    Making more people victims and then expecting hard working taxpayers to pay for them is insane. Only a liberal could think that those are good ideas.

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    • John Poitras says:

      Isn’t it a no brainer that if revenue from property taxes from the residents in the current city of Burien are going to be about half a million lower in 2012 and more in 2013 that the revenue projections of property tax revenue from the proposed annexation area are going to even lower since property valuation in Area Y decreased at twice the rate as it did in Burien proper.

      It seems like a no brainer and yet somehow I suspect that the city council will fail to take that into account because if they do, then from a budgetary standpoint annexation of area Y at this time would be tantamount to fiscal suicide.

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      • Mike says:

        Amen John. The council won’t see it that way, yet it is what it is what it is.

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  4. VERY TIRED says:

    This is what happens when a city overextends itself by ANNEXING. Burien was on shaky ground fiscally before the annexation. Why is this a surprise to anyone?

    I’ve got an idea…how about you go without salary for a year?

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  5. PatHToLogic says:

    Just like every resident in Burien who has no way to accommodate cost increases and exists within a strict budget we also expect our City to do the same.
    Our costs go up also and we change budgets, reset priorities accordingly and live within it.
    These are the times when very close attention should be paid to any expansion visions and other cost issues such as contracts.
    Do not raise taxes! Raise your ability to manage your responsibilities!

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    • John Potras says:

      Exactly Logic.. We need to be reacting to conditions as they exist NOW not when the projections they are working off are years old and were predicting a 2.5% INCREASE in tax revenues when the reality is we are looking at a 8.8% DECREASE in Burien and a 17% decrease in area Y.

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  6. jimmy says:

    wow ok if the city messying up this much as you say there not listing to you then may be its time for you to find some other area to live in unforently if you have this many problems and there not getting fixed insted complaining everyday on this blog of the same crap over and over then may its just time for you to pack up and move then you don’t have to worry about the city wasting your tax money and the other people in the city that like it here and like what city is doing won’t have to put with you anymore you won’t have to put up us anymore ether i mean i understand you probly lived here a long time and don’t realy want to move but with all this complaning and other non sense your going to drive your self in to a mental breakdown or end up in fist fight with someone its just not worth it to get your self that work up over things i do understand these topics are stress full but i think everone needs to get a little fresh air for a min or do we need set up a boxing ring in the town

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    • John Potras says:

      Jimmy.. I have yet to see anything out of you that isn’t blatantly blindly attacking ANYONE who is pro-annexation.. You never add anything to the discussion..From your diction its fairly obvious you are lacking proficiency in the english language and I suspect you are uneducated and unable to comprehend the issues before the residents of Burien. So you resort to voting for your team and it takes the form of the rambling nonsensical sniping you continually engage in.. I have a suggestion for you, if you even are a resident if Burien… which I very much doubt. Contribute something to the discussion I will and I suggest everyone else just ignore you
      . Perhaps in your world fist fights and mental breakdowns are the norm but for most people that’s exactly the kind of world we are trying to prevent from bringing to Burien.

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