Residents provide feedback to city’s revenue problems
November 3, 2011
By Christina Lords
Faced with a bleak financial forecast due to a still-stalled economy, elected officials are looking to Newcastle residents for feedback on how the city should maintain operations as it braces for continued revenue decreases.
About 45 residents armed with electronic voting clickers responded to the city’s real-time poll questions at its annual town hall meeting held Oct. 27 at The Golf Club at Newcastle.
The questions ranged from how the city should seek new revenue sources — such as raising property taxes or implementing a car tab fee — to how its officials can better communicate with residents online. Of those polled, 60 percent opted for direct emails for updates over Facebook, Twitter or a city-sponsored blog.
Striking decreases in the city’s revenue from 2007 to 2012 have created budgetary problems for the city, including decreases in sales tax and other development-related revenue.
In 2007, the city took in about $1 million in revenue related to development. In 2012, that number is expected to dwindle to only about $220,000 — a 78 percent decline in five years.
Sales tax collected by the city has decreased by 23 percent in the past five years, while property tax collected has increased by 11 percent. New development revenue from construction — not city imposed taxes — account for much of that increase, said City Manager Rob Wyman.
All told, the city has seen a 12 percent decrease in revenue since 2007.
“Over the same period of time, as those numbers have dropped, you can see that we’ve become more reliant on property taxes to fund our operations,” he said.
For the average household in Newcastle, about 17 percent of a resident’s property taxes go to the city. About 31 percent go to the state and 39 percent goes to the school district.
In the preliminary budget, the next five years show expenses outpace revenue projections for the city, Wyman said.
“At some point you reach that tipping point where there’s no big ticket items to slash,” he said. “There’s no savings that make it up. You’re talking about paper clips at some point … we’re up there right now. We’re butting up against some tough decisions, and that’s part of the reason why we’re having these types of conversations.”
In order to maintain city operations, 56 percent of residents polled at the meeting said they would be in favor of raising taxes as a way to stabilize the city’s financial condition, while 28 percent said they’d be in favor of lowering the level of services the city provides.
About 16 percent said they’d like to explore consolidation with an adjacent municipality as a way to handle the financial situation.
Of the available revenue options, 42 percent of those polled said they’d prefer the city to implement a utility tax of 3 percent, 28 percent said they’d prefer to pay a $20 per vehicle license tab and 19 percent said they’d support raising property taxes above the allowed 1 percent by asking voters to approve a levy lid lift for a specific purpose.
Twelve percent of the residents said none of those options were preferred.
As a part of the Q-and-A session during the meeting, residents requested updates on the progress of the library and wanted to know whether the city is still looking into getting a ZIP code for Newcastle.
Mayor John Dulcich said city efforts to include apartments above the library stalled the beginning of construction, but the library is expected to be open to the public by summer 2012.
He said the city is still in the process of evaluating alternatives to get the city its own ZIP code.
Many residents thanked the city for its efforts to provide sidewalks with curbs and gutters along 116th Avenue Southeast and encouraged similar infrastructure improvements in other areas of town.
On the web
View the preliminary budget in its entirety on the city’s website at www.ci.newcastle.wa.us.
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