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Poulsbo Finance Committee stops car tax early in its tread

August 25th, 2010 at Wed, 25th, 2010 at 11:49 am by Jennifer Morris

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A finance committee for the city of Poulsbo decided not to impose a $20 car tax on citizens, despite struggling to balance next year’s budget and pay for some road maintenance.

The committee briefly considered a Transportation Benefit District during a meeting on Aug. 18. Tax revenue from the district would go toward neighborhood road maintenance, which the city currently doesn’t have money for in its 2011 budget. Those repairs will have to wait another year.

At $20 per vehicle per year — which is the highest dollar amount the City Council could impose by ordinance — the tax would bring in about $108,000. The city estimates 5,400 vehicles within city limits.

If the issue were taken to vote the tax amount could be as high as $100.

Either way, the Department of Licensing would retain 1 percent of the revenue.

A majority of finance committee members agreed a car tax isn’t the way to increase revenue, especially during a recession.

“I really loathe to impose anything on the voters,” said Councilwoman Connie Lord. “We have people strapped in this community. If we were to put another fee on them … I just think it’s a burden.”

Several cities have passed a similar taxing district, including Edmonds, Des Moines, Burien, Shoreline and Lake Forest Park.

The city of Bremerton considered imposing one, but the ordinance was unsuccessful, Poulsbo Mayor Becky Erickson said.

The city still plans to conduct repairs to major roadways and complete any grant-funded road projects next year, but because a portion of property tax revenue normally used for street maintenance is being shuffled to help balance a general fund shortage, side streets will be put on the back burner.

The city is considering other measures to balance its general fund. It announced last week it would eliminate 11 staff positions by the end of this year to save roughly $840,000.

Even with staffing cuts the general fund is roughly $275,000 short, officials said last week.

Councilman Jeff Bauman said a car tax in the future could help pay for projects popular with the public, such as a downtown parking garage, but agreed a tax in this economic climate isn’t a good idea.

“This isn’t the time to resolve our budget problems by increasing fees to people,” he said.

What do you think: Would you pay a car tax? Do your neighborhood roads need repairs? Leave a comment and take a poll below.  JM

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