Monroe council considers property tax increase

The Monroe City Council advised Mayor Geoffrey Thomas and Finance Director Dianne Nelson it is willing to consider a 2017 property tax increase during financial planning last week.

This is a departure from recent years, as council has typically been adamantly and unanimously opposed to the idea of increasing property taxes. The discussion was held during the council meeting on Tuesday, May 10, to help guide the city into its 2017 budget preparations. The mayor facilitates the budget creation process each year, by providing direction to city departments based on council priorities. The process of creating the budget takes several months and begins in June.

A preliminary version of the mayor's budget will be presented to the council in October, giving it the opportunity to recommend changes. In November, per state mandates, two public hearings will be held prior to the passage of the final budget, giving the public the opportunity to provide feedback.-á

For the last two years, the mayor's instructions were to deliver a "status quoGÇ¥ budget that included no property tax increases. This year, based on a recommendation by the City Council Finance and Human Resources Committee, that could change.

Nelson initiated the discussion, saying throughout the recession Monroe councilmembers strongly opposed the idea of a property tax increase because they felt it would place undue burden on residents who were already struggling. Additionally, the economic downturn resulted in staff reductions at city hall, as departments were forced to do more with less.

But things are starting to change, she said, and staffing shortfalls at city hall are becoming problematic.

"We are now growing, and there's this huge demand for services, and we can't quite deliver at the level that the community would like us to,GÇ¥ Nelson said.

Another area that's taken a hit is transportation funding, which pays for preventative maintenance of streets with projects like chip-seals and overlays. There is currently a backlog of transportation infrastructure maintenance projects that have been deferred over the years.

Nelson asked for direction as to whether the council would support a property tax increase that used the city's banked capacity.

"Basically, I'm hoping you guys will discuss and hopefully come to some consensus of whether you're willing to support a budget that would use banked capacity of property tax, and if so, what would your main priorities be for that,GÇ¥ Nelson said. "The reason we are looking for some type of direction from council is because this is a radical change from the past.GÇ¥

Municipalities can't increase property taxes beyond the 1 percent annually, as established by state law. Should a city opt not to increase its property taxes by the 1 percent, as Monroe has done, it is "bankedGÇ¥ for potential future use. The idea behind banked capacity is that it would encourage cities to be fiscally conservative without penalizing them, since they don't lose the taxing capacity by not using it.-á -á

At the start of the year, the Monroe City Council held focused financial planning discussions over the course of several council meetings, to establish a baseline of priorities for the city. The matter was then referred to the council's Finance and Human Resources Committee, made up of Councilmembers Jason Gamble, Patsy Cudaback and Kevin Hanford.-á

The committee came back with a recommendation that uses banked capacity to increase the tax rate to $1.60 per $1,000 of assessed value, bumping the annual property tax paid by the average homeowner in Monroe up by $112.18 per year. This would equate to a monthly increase of roughly $9.35.

Currently, the average homeowner pays $287.56 per year in property tax. The $112.18 increase would bring the total up to $399.74.

"I think it's a good recommendation. It's a very fiscally responsible recommendation,GÇ¥ Gamble said. "As Dianne said, it's a departure from what this council has done previously, as opposed to not raising the property taxes in any way, shape or form. I've been proud of our record in that regard.GÇ¥

But the time has come for action, he added.

"It's our responsibility to move forward and make sure that we are providing the services at the service levels that our citizens expect,GÇ¥ Gamble said.

Based on the city's projections, the increase would bring in $798,546.95 in additional revenues. The committee recommendation dedicated $485,283 to addressing the backlog of transportation infrastructure maintenance and operations improvements, including ADA sidewalks and long-term road preservation and rehabilitation. The remaining $313,263 would be dedicated to staffing.

Positions recommended by the committee for consideration included an accountant, a deputy city clerk, a code enforcement officer and a parks department supervisor.

Cudaback agreed with Gamble, adding she is also proud of the council's record of not increasing property taxes, but they need to do something different.

"I think we're at a point now with home values increasing, getting back up to certain levels, and the need and the growth happening, that we've got to do something,GÇ¥ Cudaback said. "Not doing something really isn't an option.GÇ¥

Councilmember Ed Davis disagreed. He said he's concerned about a snowball effect; if the city of Monroe implemented an increase, what would the county and the state do? If everything goes up, it could compound the increase and make it burdensome for taxpayers. If wages were climbing, Davis said he would be able to see the justification, but that's not the case.

If anything, it's the opposite, he said. Home values may be going up, but wages are not.

"As a matter of fact, I'm still recovering from considerable loss over the last five years,GÇ¥ Davis said.

He said he is opposed to the idea of raising property taxes because economic conditions have not improved enough to warrant a tax hike.

"I'm not ready to go with the property tax increase,GÇ¥ Davis said.-á -á

Gamble said that there will never be a good time to raise taxes. It's a difficult decision, but in order to function successfully as a city, they need to look at ways to increase revenues.

"I get that $10 a month is going to be huge for certain folks, but I think it's the right thing to do. It's fiscally conservative and responsible,GÇ¥ Gamble said. "I think we put a lot of effort into it. I feel really strongly that this is the right thing to do.GÇ¥

Councilmember Jim Kamp said he supports the recommendation for an increase. Councilmembers Jeff Rasmussen and Hanford were absent.

Nelson thanked the council for its work on the matter.

"I really appreciate the attention and thought that the council has put behind this,GÇ¥ Nelson said. "These are big decisions.GÇ¥