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Cities balancing budgets with fees

 


Have you carefully checked your utility bills lately? Most people don’t unless they are monsters like the ones for garbage in Scranton, PA, and Los Angeles.

In Vancouver, WA, our garbage and recycling bill now has an added 3.6-percent refuse tax. It costs us $1.29 more every two months.

However, according to the Wall Street Journal, in Scranton, residents started receiving a $300 annual trash collection fee, which is a 68-percent increase since 2014. In LA, an assisted-living operator’s bill was less than $500 a month, but jumped to a whopping $1,500.

Mayors and city councils find it is difficult to raise property, sales, income/gross receipts (B&O) and other business taxes. Unlike federal elected leaders, they must balance expenditures with revenue collections. Most can incur debt by selling bonds only for roads, bridges and buildings, but must repay them within a time limit.

WSJ reporters Heather Gillers and Sarah Chaney correctly identified the problem. “Cash-strapped American cities are increasingly asking their residents to pay higher amounts for mundane services as they struggle to pay for mounting pension obligations, cover costs of infrastructure and replace revenue depleted by the last recession. Bills are rising for everything from parking tickets and 911 calls to sewer service and trash pickup.”

A year ago, Vancouver city leaders approved a police-funding package to raise $12.5 million a year by 2020 to hire 61 police officers and supporting staff. To pay for it, they added surcharges on multi-family housing; retail, commercial and industrial property; business licenses; and utility taxes. A citizen’s advisory committee was engaged help to determine the financing.

Then there is the skyrocketing price of homelessness.

Last November, the Puget Sound Business Journal said the Seattle area now spends more than $1.06 billion per year on the homeless crisis.

To estimate its economic impact, the PSBJ staff spent six months examining costs to nonprofits: city and county budgets; police and emergency calls to encampments and resource center; housing; and hospitals and drug treatment.

Thankfully, some of Seattle’s wealthy investors are now involved with funds to address the city’s affordable-housing project.

In LA, Eric Feingold, who owns five assisted-living facilities that cater to low-income senior citizens, says he can’t pass along the costs to residents because many live on a fixed income of $32 per day. The high garbage rates have forced him and others to admit fewer poor people and even evict current low-income renters, who often become homeless.

Further complicating the problem, WSJ reported fees are expected to go even higher because of recent changes at the state and federal level. New tax legislation caps the amount of local property and income taxes which can be deducted from federal taxes.

At the state level, Washington is considering additional taxes such as those on capital gains and carbon emissions. They add to the drain on people’s already strained bank accounts.

While there is no one solution, there are some things public officials can do.

First, consider the cumulative impact of taxes and fees. While they impact the same bank accounts of business and families, elected officials tend to view only their own. They need to look at the total impact of all local, state and federal taxes and fees.

Second, elected officials need to involve the folks who are impacted. Often those affected are the ones who can be the most innovative problem solvers.

Finally, elected officials need to slow down and make sure they consider the consequences of their actions. What good does a hasty decision do for Scranton and LA if they double or triple garbage and recycling rates and, as a result of their actions, add to the homeless population?

Don C. Brunell is a business analyst, writer and columnist. He recently retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com.

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