Chehalis Council Reluctantly Votes to Increase Property Tax

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Chehalis residents will see an increase in the city portion of their property tax rates for only the second time in 20 years.

The city council voted Tuesday to raise both the regular and EMS levy amounts by 1 percent as well as to collect 25 percent of the city’s banked property tax capacity accumulated from years in which the council voted to defer the 1 percent annual increase allowed by state law.

Based on the amounts of $1,465,306 for the regular levy and $314,525 collected for EMS services, citizens will pay an additional 5.77 percent, or $14.22 per $100,000 of assessed value. The move will raise an additional $102,786 for the city, which receives about 22 percent of the total property taxes paid by its residents on an annual basis.

“I don’t take raising taxes lightly,” councilor Chad Taylor said. “I think it’s something we’ve talked about for years and has probably been needed for a couple years. This year is I guess the time we start to put a little bit of money back into not only the people that work here but also just in the community as a whole.”

City staff deemed it necessary to raise property taxes for the first time since 2012 in order to help close a nearly $300,000 gap between projected revenues and expenditures contained in the proposed 2019 city budget.

Councilor Bob Spahr, who served multiple terms as mayor dating back to 1990 during his time on the council, pointed out that the property tax dollars collected by Chehalis barely cover the nearly $1.9 million needed to pay salaries for its police department.

“That doesn’t count the road crews, the firemen, or the staff at city hall,” Spahr said. “I just want to drive that home, what we’ve been dealing with. … Not taking those increases, those salaries have been climbing over the years and we haven’t taken some of the increases that we probably should have in the past.”

Councilors voted unanimously to pass the proposed budget on first reading following a public hearing during which no members of the public spoke for or against any portion of the document. Another public hearing is required and will take place during the council meeting on Nov. 26 prior to a final vote to adopt the budget.

About $200,000 of reserves from the general fund are needed to balance the budget, which also includes a number of one-time fixes such as transferring $80,000 from the building abatement fund to the general fund.



Using the reserve funds takes the projected end balance for 2019 down below 8 percent of total revenues. Council policy is to maintain a reserve of at least 10 percent for unforeseen expenses or to account for unanticipated downturns in the local economy.

With more than half of the projected 2019 revenues of $9.82 million coming via sales tax, Chehalis could be particularly vulnerable to a recession. Those tend to happen every 10-12 years, with the last one taking place from 2007-2009.

In a memo attached to the budget document, City Manager Jill Anderson wrote that if there is a significant increase in costs or decrease in revenues, the city may need to make adjustments to the second half of 2019 while considering additional reductions in 2020. About 75 percent of the general fund budget is attributed to staff salaries and benefits.

“Even if revenue meets our projections, that would be great, but without evidence of economic growth, there will be tough decisions to make,” Anderson said. “Services are provided by people, and we did not and do not want to make premature decisions regarding additional cuts.”

There is some reason for optimism that the Chehalis economy will receive a boost in 2020, if not the tail end of 2019, from construction of a 70,000 square-foot shopping center to be built between the Dutch Bros. and I-5 Toyota on Northwest Louisiana Avenue.

The potential for revenues connected to work on city projects such as renovations at Recreation Park could also be beneficial, though that effort is largely dependent on the city receiving grant funding via the upcoming state capital budget.

Further development of Chehalis-Centralia Airport land or improved economic forecasts would also help assuage budgetary concerns for the time being.

“I think things will probably wind up a little better (than projected),” Mayor Dennis Dawes said. “Not that there’s going to be money coming out of pockets or anything like that, but I think staff has always been responsible with the budgeted amounts they’ve been given and I know since I’ve been on the budget committee, they’ve tried to make things stretch as far as they can and have not spent their budgeted capacity.”