The city's 2009 property tax levy was approved by a 4-2 vote at the Nov. 24 city council meeting. It will bring the city another $11,499.70 in property tax revenue.
The new levy represents a 1-percent increase in 2008 property tax collections plus the value of $60 million in new construction and $4 million in annexations.
City Councilors Erik Erichsen and Walt Schubert voted "no," saying this isn't the time to be raising taxes.
But Mayor Laura Dubois said, "The city has been losing ground every year and now the voters will see services begin to decrease."
The tax levy now will total $1.33 per $1,000 assessed valuation or $333 per year for the owner of a $250,000 home.
Sequim residents also pay $1.09 per $1,000 to Clallam County Fire District No. 3, 27 cents per $1,000 for the fire district's emergency medical services levy and 31.6 cents to the North Olympic Library System for a total of $3.03 per $1,000 assessed valuation.
"Property tax revenue is a key source of revenue to the general fund, representing 16 percent of general fund revenues, and is also used to fund street operations," Karen Goschen, administrative services director, wrote in a memo to the council.
The state's voters passed Initiative 747 in November 2001. It limits property tax collections to 1 percent more than the previous year plus the value of new construction and annexations.
Based upon preliminary numbers from the Clallam County Assessor's Office, new construction totals $46 million, up from the earlier estimate of $26 million. Annexations total $4 million.
Total budgeted 2009 property tax revenue is $1,230,511, of which $62,831 is new construction and $6,210 is annexations.
The city's total assessed valuation according to the assessor's office is $923,523,987, which results in a levy rate of $1.33 per $1,000 assessed valuation, plus 31.6 cents per $1,000 for the North Olympic Library System and $1.09 per $1,000 for the fire district.
Interim city manager Robert Spinks told the council that the city's property tax revenues are accounting for less and less of the city's general fund revenue each year.
During the public comment period, Sequim planning commissioner Ted Miller said the inflation rate is 3 percent so this 1-percent increase still leaves them 2 percent behind.
"I don't think that raising taxes just because we can is the reason to do so. We should keep it where it's at," Erichsen said.
Schubert said, "I've voted for this every year but now it's not setting a good example. So I'm going to vote no."
City Councilor Paul Mc-Hugh said Clallam County has been able to forego its 1-percent property tax increase because it receives timber tax money, will get money from the $700 federal bailout bill and also is spending down its reserves.
Since Sequim doesn't have those options, he was going to vote for the 1-percent increase, McHugh said.
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