Commissioners looking to max out on taxes

By Meg Olson

Fire district commissioners are looking at taking the maximum allowable tax increase this year as well as collecting taxes they have not taken in previous years.

At their October 12 regular meeting commissioner Stan Riffle said he did not approve of the district “banking” taxing capacity by not taking the yearly 1 percent increase in their levy allowed by the state. “We need to keep up,” he said.

Commissioner Bill Meursing agreed. “It’s kind of a make-me-feel-good thing,” he said. “Then you feel kind of embarrassed because you take the chunk back.”

That’s what the district did last year, when for the first time since voters agreed to double the district’s levy in 2010, commissioners voted to take the annual increase plus approximately half of their banked capacity. Riffle and Meursing at that time supported taking all the banked capacity but agreed to a more modest amount suggested by commissioner Jeff Wilmot and fire chief Christopher Carleton.

Until 1986, taxing districts either had to take the maximum increase allowed, then 6 percent, or lose that levy capacity. The state introduced the idea of “banking capacity” so taxing districts would only take what they needed, when they needed it, without being penalized.

“The statute that allows banked levy capacity has a clear purpose: to encourage taxing districts to levy only what they need rather than the most they can get,” said Cindi Holmstrom, state revenue director until 2010. “This is simply good tax policy. They don’t lose it if they don’t use it.”

The fire district can now collect the tax dollars they could have collected from 2011 through 2014 but did not.

“Every year the banked capacity isn’t used the taxpayer pockets it, but the district doesn’t lose the ability to collect it in a subsequent year,” said Whatcom County Assessor Keith Willnauer.

The fire district’s levy last year was $552,756, Willnauer said. District commissioners need to approve next year’s levy by resolution, and can choose to either not take any additional funds, or a maximum of $13,942, which represents the annual 1 percent increase of $4,675 plus $9,267 in banked capacity.

Carleton said staff would prepare several resolutions and budget scenarios, looking at a 1 percent increase up to the maximum increase allowable using that and all the banked capacity. These alternatives will be discussed at a special meeting scheduled for Friday, November 4 at 1 p.m.

The challenge, Carleton said, was to balance fiscal conservatism with maintaining service levels and healthy reserves. “Costs are still going up on a yearly basis and we hadn’t been keeping up,” he said. While Carleton said he was applying for grants to address some pressing equipment needs, such as replacing aging engines, the department needed to be able to operate without grant support if needed.

“Most taxpayers would like districts to take only what they need,” Willnauer said. “Then again taxpayers need to be ready to pay for the services they want to have.”