City budget and misleading information | Federal Way letters
October 7, 2010 · 8:01 PM
The Oct. 6 article on the city budget explaining the problems faced by the city in 2011 and 2012 relies heavily on the information presented by City Manager Brian Wilson in the series of public meetings that concluded on Sept. 30. There are a few misleading statements in the presentations which are repeated in the article.
The article states that Federal Way residents pay less taxes than residents in neighboring communities. The figures quoted in the article are taken directly from the city manager's presentation and are determined by dividing the General Fund tax and fee revenues by city population, which is quite different to the average amount of taxes paid by residents. Two factors that can lead to anomalies in this type of analysis are:
• Individual city governments determine which taxes are levied and which revenues are directed to the General Fund.
• Revenues and taxes are generated by businesses, retail, etc., as well as by city residents, which can lead to major differences on a per capita basis.
The presentation lists Tukwila as the highest in tax and fee revenue per capita at over $1,100. With Federal Way at $328 per capita, does that mean that Tukwila residents pay more than three times as much in taxes as Federal Way residents? I think not!
Until the council can make good on its goal to "establish Federal Way as an economic leader and job center in South King County by attracting a regional market for high quality office and retail business," I fear we will continue to languish in the basement of the tax revenue per capita league table.
The article also states that "The brunt of the expected revenue in the next two years will come from sales tax (27 percent of all revenues collected), property tax (25 percent of all revenues collected) and utility tax (19 percent of all revenues collected)." Again this is misleading in that the figures quoted pertain only to the General Fund. In the overall 2011 budget projections, utility tax is the city's largest single revenue stream and is 17 percent higher than local sales taxes and 30 percent higher than property taxes.
It is unfortunate that the data presented to date deals only with the General Fund and not the entire budget.
Derek Purton, Federal Way