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November 27, 2007

One town rushes to raise taxes

Posted by David Postman at 8:18 AM

The Port Townsend City Council will hold a special meeting tonight to consider raising property taxes. The council wants to act before Thursday when the Legislature is expected to impose a statewide tax cap. To clear the way for the increase, the Port Townsend City Council voted Monday night to rescind a law that would have required a a public advisory vote on the tax hike, according to the Port Townsend and Jefferson County Leader.

Reporter Barney Burke writes in the PT Leader that if the city had stuck to the 1 percent limit it would have been allowed to raise taxes on a $300,000 home by $4.22. Under the city's plan, though, that tax bill would go up $46.40. And Burke reports that it's not clear what happens if the city raises taxes tonight and the Legislature reinstates the 1 percent cap Thursday.

At issue in Port Townsend is what's called "banked capacity." When local governments raised property taxes less than the limit, they were allowed to bank the difference for future tax increases.

Gov. Christine Gregoire has asked local governments to refrain from raising taxes over the 1 percent limit until the Legislature acts. She says that since I-747 passed overwhelmingly statewide, the people have spoken and local taxing districts should not take advantage of the small window of opportunity to raise taxes above the limit.

Port Townsend would use its new tax money to balance next year's budget. The money would go to a trust fund for the city library, to maintain the city pool and to match private funds being raised to build a new pool, according to the Peninsula Daily News.

The vote last night to rescind the law requiring an advisory vote was 4-3. But from what City Manager David Timmons told the Daily News' Evan Cael, it doesn't look like local officials are too worried about the governor's call for tax restraint.

"I understand that it's a political issue in Olympia more than a reality here," Timmons said.

"People have reminded us that the city of Port Townsend did not support any of the Eyman initiatives. They rejected them all."

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