Bonney Lake councilmembers voted 6-1 Oct. 27 to table action on setting property tax levels for the coming year.
The council decision will come during Tuesday night’s meeting.
Under state law, for cities with populations more than 10,000, property tax collections are capped at the lesser of two sums: either 101 percent of what was collected the previous year or 100 percent plus inflation.
The Pierce County Assessor Treasurer has certified that the implicit price deflator – a formula used to determine inflation – has been established at minus .848 percent. Therefore, property taxes collected in 2010 would be less than collected this year.
Deputy Mayor Dan Swatman said property taxes collected by the city could shrink by $46,565.
“At what point in time should we be raising or not raising taxes?” asked Swatman, the lone opposing vote. “That’s the question on the floor.”
“I’m concerned this action along with I-1033’s possible effect on property taxes may have multiple effects come 2011,” Councilman Dave King said. “With a 99-pecent deflator, then I-1033 kicks in in 2011, I’m concerned we’ll be losing far more in terms of revenue than we can ever recoup.”
King said if I-1033 passes, it still has to be adopted by the state Legislature.
He asked Chief Financial Officer Al Juarez to provide data for the council on 100 percent level.
Because of the ongoing recession, city revenues are at historically low levels, forcing cutbacks in programs like street maintenance, public safety, animal control and senior services.
Depleted city revenues would force furloughs and layoffs of city employees.
Council passed a motion for a public hearing Tuesday to consider revenue sources and a possible property tax increase before setting the property tax rate.
“We can set the…rate after the Nov. 10 public hearing,” King said.
No one spoke during a public hearing for a Transportation Investment Generating Economic Grant from the U.S. Department of Transportation.
Public Works Director Dan Grigsby said funds made available from the grant program would fund intersection improvements at state Route 410 and Sumner-Buckley Highway, which is Phase II of a two-step project.
“This grant program is specifically targeted to projects that cost $20 million or more,” Grigsby said. “We’ve asked for a waiver of the $20 million.”
The grant application, submitted Sept. 9, requests approximately $3.4 million to supplement the city’s contribution to Phase I of the project and design of both phases.
The city has funded $202,000 for Phase II design while the state’s Department of Transportation funded $400,000 for Phase II design.
The $3.4 million in estimated Phase II construction costs would come solely from the TIGER grant.
