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City's tax lid will stay on
By MIKE HALLIDAY
No lid lift for now was the Federal Way City Council's decision earlier this week.
City officials gave the council the option of asking voters this fall to raise the dollar amount per thousand of assessed property value to help the city's funding situation. The city currently collects $1.30 per $1,000 of assessed property. The state's constitution and state laws limit the city to collecting $1.60 per $1,000.
But council members said Tuesday they aren't in favor of putting a lid lift before voters for several reasons chiefly that anti-tax advocate Tim Eyman's Initiative 864 is no longer a threat.
Before 1997, the city could raise the amount collected each year by as much as 6 percent from the previous year. Referendum 47, which passed in 1997, limited that increase to 2 percent. When Eyman's Initiative 747 passed in 2002 the increase was lowered to 1 percent or inflation, whichever was smaller.
Inflation has grown faster than 1 percent, so the city went with that number. Taxing organizations like the city and the Federal Way Fire Department can ask voters to approve a taxing percentage higher than 1 percent, but that voter-approved increase a lid lift is good for only one year. Hence, that is why voters see a proposal each year on the ballot asking for an increase for the Fire Department, which is funded separate from the city.
But when I-864 was announced, governments of all kinds began looking at options.
I-864 proposed rolling back property taxes by 25 percent and would have been a $2 million hit to Federal Way. Officials said the revenue cut would have meant fewer services could be paid for and the municipality would have to rely more on sales tax.
But if voters approved property taxes at the polls, they would be exempt from I-864's rollback.
The Eyman initiative expired earlier this summer because it lacked the requisite number of voter signatures on petitions to make the ballot.
Councilman Jim Ferrell urged his colleagues to reject a city lid lift and said that other taxing entities are now taking a "wait and see" approach.
Councilman Jack Dovey called the lid lift "a good idea at the time."
The council also pointed to a lack of time before the primary election in September or the general election in November. Educating voters about the levy lid lift needed more time, they said.
In the end, the council voted 6-1 to have the city's staff monitor the dollar amount being assessed and notify the council if the lid lift needs further consideration in the future. Ferrell was the lone nay vote.
The council meeting was the first in the new City Hall that opened fully Monday after city offices relocated last weekend from the old city hall building a few blocks away. The Police Department and Municipal Court moved in last month.
Staff writer Mike Halliday: 925-5565, firstname.lastname@example.org