The City Council could approve an increase to 2017’s property tax levy as high as 6.48 percent Monday.
Council members, in a committee meeting Wednesday, voted to bring two ordinances to Monday’s agenda: One would increase the property tax rate over last year’s by 1 percent; the other would increase it by 6.48 percent. The council could then approve one ordinance or the other.
For Ferndale homeowners whose houses are valued at $250,000, a 1 percent increase would add $2.18 to last year’s tax bill, according to city documents. A 6.48 percent hike would add $14.49.
But council members could also vote to amend the language to have the increase fall somewhere between those rates – and that was the idea, Councilwoman Cathy Watson said, when she proposed the two options Wednesday.
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State law allows cities to increase property tax revenue by 1 percent each year, but when cities forgo that increase, those rates are saved as “banked capacity” and can be applied later.
The city last took its 1 percent increase for 2015’s taxes, said Whatcom County Assessor Keith Willnauer. But Ferndale has banked 5.48 percent, meaning the council could take the 1 percent increase in 2017, plus all of the 5.48 percent of banked capacity, for a 6.48 percent increase.
The city collected $1.04 million in property tax in 2014, documents show. A 1 percent increase would bring an additional $10,398 in revenue. A 6.48 percent increase would generate an additional $67,379.
Watson said she proposed the increase as a way to fund a position dedicated to maintaining streets and sidewalks, a program the city did away with amid the recession. The funds could also help improve the city’s parks, she added.
The City Council will vote on the increase after a public hearing at Monday’s meeting, when residents can provide input about the proposal. The council is scheduled to meet at 6 p.m. at the City Hall Annex, 5694 Second Ave.