Wednesday, October 23, 2013
Voters living in the city of Omak will notice Proposition No. 1 on their general election ballots. The measure asks voters about imposing an additional 1/10th of 1 percent on taxable sales in the city.
During the 2013 budget process, we came to the harsh realization that we need to reduce our general fund expenditures significantly.
The fund pays for things like fire, police, parks and the swimming pool, planning and building inspection, Omak Municipal Court, the mayor and city council and also supports the library, airport and cemetery operations.
In prior years, the council had mandated the city’s fund balance — often called a “rainy day fund” — not drop below $1 million to make sure we had adequate resources to weather additional revenue losses or a catastrophe.
As we approached the 2013 budget, we froze wages of approximately one-third of city employees and eliminated two seasonal positions that primarily maintain parks. The Public Works Department re-allocated its crews toward the sewer replacement project. Travel and training budgets were reduced, and the replacement of police vehicles was delayed, one of them for the second time.
In the current budget, there is a request to replace three police vehicles and the Fire Department’s command vehicle and other essential emergency-response tools.
With the reductions, the 2013 budget was going to leave an ending fund balance of $738,000, and would authorize the expenditure of $482,000 more than expected revenues for the next year. That’s unsustainable.
Further searches for budget reductions did not provide any significant relief.
The only option available was to reduce the police force and eliminate two officers, if we were to near the mandated $1 million threshold.
The actual budget ending fund balance for 2013 was $989,000, and the expenditures exceeded revenues by $218,000 even after the loss of the two police officers.
The council received significant public opposition to reducing the police force. But in the end, the money simply was not available.
During that time, those testifying pointed out the city could request voters approve a sales tax increase of 0.1 percent — increasing the sales tax in Omak to 7.8 percent.
The incremental increase is authorized by the Legislature through Revised Code of Washington 82.14.450 (5).
Under the law, at least one-third of the tax increment must be used for enhanced delivery of law enforcement, fire protection or both.
The 2013 city police and fire budgets account for more than 56 percent of current city expenses.
The tax increase would result in a cost increase of 10 cents on the purchase of $100 worth of taxable goods or services.
Those testifying also pointed out some neighboring towns have already adopted the higher tax.
After the budget was approved, the council followed up on the tax increase idea and approved the necessary resolution to place Proposition No. 1 on the ballot.
It is appropriate to further point out some of the revenues the cities have traditionally received from the state have been significantly reduced over the past few years.
Liquor excise taxes and liquor profits have dropped more than $21,000 from the amount received in 2012 as a result of privatization, and the allocation from the City Assistance Account has dropped more than $9,000 in the past two years.
It’s ironic that privatization of liquor sales, which has caused a reduction in state shared revenue, has also come with an increased demand for police services as liquor theft and under-age liquor possession has skyrocketed.
Based on the current sales tax collections, if Proposition No. 1 is approved by the voters, the city would receive an additional $75,000 in the 2014 year.
Thereafter, the annual revenue would be approximately $125,000.