Whatcom County approves two-year budget with property tax hike, use of ‘banked’ funds
Whatcom County Council members approved a nearly $700 million two-year budget on 4-3 vote Tuesday night as dozens of residents spoke against a tax increase of 2.7% to fund county departments ranging from Public Works to the Sheriff’s Office.
County Executive Satpal Sidhu said his economic plan is a “status quo” budget that will retain most services and programs at their current levels but add sheriff’s deputies and boost staffing for the courts, including the Prosecuting Attorney’s and Public Defender’s offices.
Whatcom County’s budget for the next two years takes the 1% tax increase allowed by state law, along with about a decade’s worth of “banked” taxing capacity.
In all, it’s about $120 million less than the 2023-24 budget.
Council members Ben Elenbaas, Tyler Byrd and Mark Stremler voted against the measure, citing their opposition to the tax increase amid economic uncertainty from post-pandemic inflation.
“This whole government has gone out of control,” Stremler said. “With this financial climate that we’re in right now, we cannot continue the status quo. Tonight, the community of citizens has spoken very clearly and they are not in favor of this budget.”
Sidhu defended the tax hike in his budget message last month.
“This banked capacity was preserved precisely for a moment like this, when the macroeconomic situation has shifted dramatically and put in jeopardy funding for our core state-mandated services. I understand that any decision to increase the tax burden on our constituents cannot be taken lightly, but this must be weighed against the impacts of defunding local government,” he said.
County officials heard more than two hours of public comments before Tuesday’s vote, including Dave McCluskey of Bellingham.
“The reality is that we need to look at cutting costs, not increasing (taxes),” McCluskey said. “Just adding more income is not only lazy, but it’s irresponsible. None of us can do that with our own home budgets.”
In opposing the tax hike, Jason McFadden of Everson said the county can’t have a “steak dinner on a hot dog budget.”
Real estate broker Rachael Wilson said the tax increase would unfairly affect fixed-income residents and ultimately raise the cost of housing.
“Many residents are already struggling with inflation, housing costs and stagnant wages,” Wilson said.
Several speakers mentioned an 11.4% tax increase, echoing a claim from the Whatcom Business Alliance that Whatcom County spokesman Jed Holmes said is misleading.
Whatcom County residents who live in a city will see a 1% tax increase from the county’s part of their property taxes because they don’t pay for road maintenance. Those who live in unincorporated areas will see a 2.7% increase, which is less than the rate of inflation, Holmes said.
“So for a $500,000 house in a city (the owner) sees a $32 increase in the general fund levy. In unincorporated county, a property of the same value would see an increase of $97.50,” Holmes told The Bellingham Herald in an email.
Several speakers also said their homes have been increasing in value, leading to higher tax bills. Washington has no income tax, so property owners, businesses and consumers shoulder the burden of funding schools, state and local governments and other agencies through property taxes and sales taxes.
During discussion after public testimony, Deputy Executive Kayla Schott-Bressler recognized that issue.
“It is a real experience that people’s property taxes have gone up. Particularly as commercial values have declined, that shifts the burden more to residential properties,” Schott-Bressler said.
Councilwoman Kaylee Galloway said county officials faced tough fiscal choices in developing its budget.
“It’s been duly noted that we’re having to both cut and raise revenue in order to get to a place of structural balance. This is the budget climate that we are facing,” Galloway said.
A little more than 42% of county spending is in wages and benefits, and Sidhu enacted a hiring freeze last summer.
“I understand that you want us to make cuts. But what you’re really saying is that you want us to fire people,” Galloway said.
Whatcom County has “put ourselves in the hole for funding” by not taking its 1% annual tax increase for so long, Councilman Todd Donovan said.
“I really appreciate the comments we had from folks here and understand and share the frustration with a lot of this,” Donovan said. “We are cutting. We’re taking the banked capacity tax increase, but we are cutting millions from this budget.”
This story was originally published November 23, 2024 at 3:56 PM.
