Utility tax test for council

Roegner argues cuts or spending delays might be a better answer than a utility rate hike.

Federal Way Mayor Jim Ferrell has again recommended the City Council raise utility taxes. But how does that square with election promises from him and the other candidates from last fall, and has the case really been made to the public that they are necessary? Shouldn’t raising taxes be done as only a last resort?

This is not a new debate for city government. Ferrell says the city needs more money for police officers, though he also blames increases at the regional jail and the city’s parks and recreation and public works departments and an increase in minimum wage. However, the political messaging to the public has emphasized that additional future policing is tied to the need for additional utility and admissions taxes. It is a two-year-old battle. Ferrell has repeatedly said he wants to increase police from 131 to 136 officers. But that is a guideline, not a law, and is safety the real issue?

In spring 2016, with four murders, Ferrell amended his own budget to recommend to the council the city add nine police officers over two years, even though his police chief had only requested two and Ferrell had denied those. He then changed course and wanted to add a tax on Lakehaven Utility District to pay for the additional officers. With the 2017 election only months away, some viewed the move as a political reaction to public pressure rather than a thoughtful decision.

Readers may recall that Lakehaven Utility District resisted that idea and threatened legal action. In 2017, with crime down, Ferrell’s former Chief of Staff Brian Wilson preached to residents and council members the line of “creating a perception of safety.” But with local municipal elections on the horizon and Ferrell expecting a challenge from council member Susan Honda, the urgency of a tax increase seemed to fade away. Then, in the closing days of the election, Honda challenged Ferrell on his city finance management. But it was too late for the issue to gain traction.

At one of the debates Ferrell, Honda, council incumbent Martin Moore and eventual winning candidates Hoang Tran and Jesse Johnson all held up a “no” sign when asked if they supported the utility tax. In statements later, Tran said he really didn’t have enough information and would want to “thoroughly examine the effects” prior to any action. Johnson also added in written statements that he would support a utility tax for additional police officers, but that “we must look at each and every line of the budget and make sure that the money is already being spent appropriately.”

Now, just four short months later, Ferrell has resumed his previous position and again recommended a utility tax, along with an increased admissions tax, and they could pass. He also recommended what appears to be an ill-considered and likely short-lived business registration increase for non-profit agencies.

Political cynics dismiss Ferrell’s flip-flop as just “what you should expect from politicians.” Believers in good government are not so charitable and will watch to see how council members actually vote.

Even though the city saw no urgency to pass the utility tax in 2016 or 2017, the mayor-council retreat appeared designed to slow walk the council toward a preconceived notion that the tax was absolutely necessary. But is it? Little justification was offered other than other cities have more money.

Overall crime was down by 10 percent last year and is actually down by 5 percent over the last five years. The police chief continues to say the city is safe and believes police caught the 2016 murderer, although they have not yet charged him with those crimes as he is in jail for other crimes.

That leads to a bigger question. If the mayor and council have been concerned about the city’s fiscal health since 2016, why did they apply for a COPS grant for 2018 for five more police officers, when they knew they couldn’t pay for them? Should the city give the grant back?

In the last 18 months, we have not read of a hiring freeze or seen a list of cutbacks in city spending. When the Performing Arts and Event Center was passed, the public was told it would not result in a tax increase, nor was there any fiscal concern when the city built a downtown park. But here we are in the first full year of the PAEC with an expected subsidy approaching $400,000, and a tax increase is up for debate. The subsidy for 2017 had to be between $600,000 and $700,000. One former council member says those dots are connected and also notes the city has not sold the Target property, nor the naming rights to the PAEC.

The city has tried to make the case that Lakehaven has plenty of money and can afford to help the city. But Lakehaven says it needs its reserves for future capital costs and does not want to have the city transfer its financial problems to Lakehaven. Also, the city says it costs more to have the franchise agreement with Lakehaven than the city gets for it? That should have never happened and suggests some significant errors in negotiations that council members should review.

If the city’s fiscal need is truly dire, then cuts or spending delays might be a better answer, as Lakehaven seems likely to oppose and delay any tax increase in court.

With crime down, Lakehaven unwilling to be the banker for City Hall, increased costs with the PAEC, and elected official flip-flops, the City Council has a lot of work to do, and the March 6 council meeting should only be the start of serious debate. In a clear message for the council, the Mirror poll of readers showed only 14 percent support a tax increase to pay for police, while 63 percent oppose it and 23 are supportive only after all other options are considered.

Holdover incumbents Mark Koppang and Lydia Assefa-Dawson are thought to have political aspirations and are not up until 2019. Both appear to lean toward supporting the utility and admissions tax. Dini Duclos also appears to favor the tax. She is up in 2019 but is not expected to run again. Three possible yes votes. Are Honda and Moore still opposed, or was that just election year rhetoric? Where will Tran and Johnson stand?

This debate will serve as the first real test of the new council on policy. How will it respond?

Federal Way resident Bob Roegner is a former mayor of Auburn and retired public official. He can be reached at bjroegner@comcast.net.

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