PORT ANGELES — The Port Angeles City Council has authorized a 1-percent increase in property tax collections for 2021, an annual move that conforms with fiscal policy.
Council members voted 6-1 Tuesday — with Brendan Meyer opposed — to pass a resolution authorizing the increase in the regular property tax levy due to a substantial need.
The council also conducted a first reading and public hearing Tuesday on an ordinance levying 2020 property tax for collection in 2021. That hearing was continued to Nov. 17.
A 1-percent increase in the general fund levy will generate about $47,300 in new revenue for core services like police, fire, parks and recreation and streets, Finance Director Sarina Carrizosa said.
The total amount collected from the levy next year will be about $4.79 million, she added.
“This 1 percent property tax increase is the only proposed increase in the 2021 budget,” Carrizosa said during a virtual council meeting.
“Our utility rates are going to remain the same as they were in 2020.”
Many cities, counties and junior taxing districts take an annual 1 percent levy increase, the maximum allowed under state law without a vote of the people.
Council member Lindsey Schromen-Wawrin said general fund expenditures, which include salaries and benefits, generally increase at a higher rate than revenue.
“This 1 percent limit is a major burden on the long-term fiscal sustainability of our general fund,” Schromen-Wawrin said.
Council member Mike French said the city made deep cuts after the economic recession of 2008 and has relied on property taxes to maintain core services.
“This is a time where the public desperately needs those services, and we desperately need to keep making investments with those public tax dollars as we have been doing,” French said.
Meyer, one of four freshman council members, said he campaigned on lowering property taxes last year.
“It resonated with voters,” Meyer said.
Meyer said he was concerned that the assessed value of smaller homes in Port Angeles had “gone up tremendously.”
“I think those are going to be the houses that are going to see the biggest increase in their property tax, according to this breakdown,” Meyer said.
“So that’s my concern with it, and that’s where I stand.”
Carrizosa said a 1-percent increase in the city’s property tax collection does not necessarily equate to a 1-percent increase on property tax bills.
“If the assessed valuation were to increase, the levy rate would decrease, and vice versa,” Carrizosa said.
“If the assessed valuation were to decrease, the levy rate would go up. The reason for that is it keeps us at the amount that we are allowed to take.”
The city’s regular levy rate has decreased in each of the last five years because of the rising value of property. The levy rate was $2.98 per $1,000 of assessed valuation in 2016 compared to $2.30 in 2020, according to Carrizosa’s presentation.
The assessed value of city property is projected to rise 5.7 percent next year and the levy rate is projected to be $2.21, Carrizosa said.
“Depending on how the assessed value of an individual’s property goes up relative to everybody else’s assessed value, and relative to the overall increase compared to that 1 percent that the city can receive, it doesn’t necessarily mean that the city is getting 1 percent more from your property,” Schromen-Wawrin said.
“It’s kind of confusing, but it’s more this 1 percent in city revenue, which is not necessarily the same as 1 percent increase for an individual property owner.”
In years when the implicit price deflator falls below 1 percent, the City Council must declare a substantial need to take the full 1-percent property tax increase as allowed by state law.
The implicit price deflator for 2021 collection is 0.6 percent.
“Without the resolution for substantial need, we would be limited to that 0.602 percent,” Carrizosa said.
Mayor Kate Dexter said the resolution declaring a substantial need would help provide budget predictability.
“Making a small increase in order to continue to provide services and have a balanced budget and stay within sound fiscal responsibility makes a lot of sense to me,” Dexter said.
No verbal public comment was made Tuesday in the public hearing. The hearing was continued to 6:30 p.m. Nov. 17.
For viewing options or instructions for making public comment to the council, go to the city’s website at cityofpa.us.
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Reporter Rob Ollikainen can be reached at rollikainen@peninsuladailynews.com.
