Whatcom Council allows executive’s veto of property tax hike to stand

Jack Louws
Jack Louws Courtesy to Bellingham Herald

Whatcom County property owners won’t have to pay a 1 percent property tax increase a year over the next two years, because the County Council didn’t overturn County Executive Jack Louws’ veto.

The council had approved the increase and the 2017-18 budget on Nov. 22. Louws vetoed both. The increase was part of that budget.

It would have taken five council members to overturn each of the county executive’s vetoes.

Louws explained his action in his veto message, but an upset council told him during the council’s meeting Tuesday that his statements were wrong. And, they said, the council approved the property tax increase after Louws gave them a biennial budget with a $1.3 million deficit each year.

“That’s essentially what this veto message was: randomly cherry-picking something and saying that’s why we raised taxes. That’s something that’s just throwing meat to the crowd,” County Council member Todd Donovan said. “A lot of damage has been done with the misinformation that came out of that veto message.”

Louws stood by the statements in his veto message. “I guess we’ll agree to disagree,” he said.

Veto fight

The reasons Louws gave for his vetoes were:

▪ $150,000, or 53 percent of the increase in the first year, was set aside for a legal review of potential legislation developed by the County Council that was related to the export of fossil fuel out of Cherry Point.

Council member Ken Mann said the council approved the legal review after staff asked them, saying they didn’t have the expertise in-house for issues such as the federal commerce clause or railroad clause.

▪ The remainder of the tax increase wasn’t allocated for a specific mandated purpose, Louws said, or for solving existing challenges related to county infrastructure. It also could hurt the county’s ability to get voters to approve a tax to pay for a new county jail.

▪ It also wasn’t the right time because of an Oct. 6 state Supreme Court ruling that has, as a consequence, halted – for now – new developments that depend on exempt wells in much of rural Whatcom County, leaving property owners reeling.

Council member Barbara Brenner, who along with Rud Browne originally voted against the property tax increase, asked Louws why he didn’t say he was concerned about the amount for the legal review when the council made its decision.

Browne, who voted against the property tax increase because the dollars weren’t allocated toward a particular expense, said he was startled to see that the county executive had tied it specifically to the legal review.

Mann was particularly pointed in his criticism.

“I think you guys are getting played if you override this veto,” he said Tuesday to fellow council members.

“He wants you to override this veto. He gets to run around and make all these political statements and bogus linkages about what our intentions were and what we were doing,” Mann said. “And then he gets to spend all the money and you guys get to take the hit for overriding the veto. Don’t do it.”

New budget, “no trust”

State law allows taxing districts, such as counties and cities, to raise the property tax at the beginning of each year by 1 percent of the previous year’s tax revenue.

A 1 percent increase would have applied to the county’s entire property tax pool – the total amount of taxes to be collected in a year – not to individual homes.

The proposed property tax increase would have raised an additional $285,313 next year for the county’s general fund and $581,092 more in 2018. The general fund pays for the cost of running the county and providing services.

Had the tax been implemented, the owner of a $300,000 home would have paid $3 more for this property tax increase in 2017, and $6 more in 2018, according to figures provided by the county.

In response to the criticism of his actions, Louws said the original budget he gave the council didn’t include the property tax increase, that the council knew about the deficit throughout the budget process, and that the council proposed the additional revenue but then added about $300,000 more in expenses.

“I’m challenged to find out how spending $20,000 more than what you’re bringing in helped the budget deficit,” Louws said, adding that Mann had plenty of chances before adopting the budget to “voice his opposition” and he didn’t.

After Louws vetoed the property tax increase and the budget, Mann – who said “there is no trust now” – proposed cutting what he called Louws’ “luxuries” from the budget.

Whatcom County voters in November approved raising their property taxes to pay for emergency medical services.

While that freed up money that would have come from the county’s general fund, the plan for now is to set that money aside specifically for public safety needs such as a jail or triage center instead of putting it back into the overall pot; Mann proposed reserving $1.5 million in 2017 and $1.7 million the next year.

He also suggested about $383,000 in cuts, which included the executive’s request for a facilities projects and operations manager, an assistant for the manager, and an evaluation of the financial system.

The council approved cutting the financial system evaluation and the assistant, saving about $227,410.

Council members also voted on a new budget because of Louws’ veto.

It passed 5-2, with Brenner and Mann opposed because they wanted more cuts.

Kie Relyea: 360-715-2234, @kierelyea