Covington City Council is changing its financial plans for 2020 after voters across the state approved Initiative 976, which put a dent in the city’s future budget.
These plans include eliminating half of a full-time employee, a loss of the Covington Days Festival parade and elimination of some city maintenance programs.
“If I-976 passed we would lose about $400,000 a year in revenues that goes strictly to our roads,” Covington Mayor Jeff Wagner said to The Covington Reporter in October. “So our budget workshops are held int he last Saturday of October. We pushed it to November 16. We’re waiting till after the election … there is no reason to have a budget workshop to have to come back to change things if we have a $400,000 shortfall.”
The council held its first budget workshop and voted to cut the budget in anticipation of I-976 going into effect in January. The city council approved almost $220,000 in budget cuts across city departments.
“Now we know that a large chunk of our street fund, which goes toward street maintenance and operations, will disappear,” stated Covington City Manager Regan Bolli in a city press release.
Because I-976 removes the ability for cities across the state to collect car tab fees that go directly toward local transportation improvements, the city’s general fund will also be taking a large hit as it heavily subsidizes the street fund.
The approved cuts to the city’s budget include;
- Removal of one half of a full-time employee in street maintenance.
- Elimination of crack sealing and graffiti removal programs.
- A one-third cut to the right-of-way landscape maintenance budget.
- Elimination of the parade at the Covington Days Festival, one summer concert, the Battle of the Bands event and the Summer Volleyball Tournament.
- A 50 percent reduction in the city’s art fund.
- Cancellation of the city’s GovSpend subscription.
- Elimination of the State of the City event and Business Breakfast.
- Cancellation of the Regional Economic Development Alliance membership.
- Removal of the city logo items budget line.
- A 75 percent reduction in the council contingency budget.
“It is never easy to cut budgets, especially staffing,” Wagner stated in the press release. “We are a small city, so even small cuts can make a huge impact on service levels.”
In October, Wagner explained how car tab fees help the city maintain its small budget.
“We are still putting in $1.4 million a year on road maintenance but we are doing $63 million in road projects right now,” Wagner said. “Those we’ve gotten grants for, but those are only for new roads. So the funding that we need for operation and maintenance depends on everything that we can get.”
Initiative 976 was created by activist Tim Eyman and was approved by state voters in November. The proposal will do a number of things including limiting car tabs to $30 a year. The proposal would also eliminate 0.3 percent sales tax on vehicle purchases, lower fees on electric vehicles and snowmobiles, bar transportation benefit districts from imposing vehicle fees, and reduce the Sound Transit motor vehicle excise tax.
Eyman announced on Wednesday, Nov. 21, that he is planning to run against incumbent Jay Inslee for Governor after the success of his initiative.
The city did attempt many times to increase the city’s sales tax by 0.2 percent, $0.002 for every $1, to help increase funds for road maintenance.
“We as a council said this last time ‘if the voters approve of the sales tax increase … we’d eliminate the car tabs, $20 a car, here in Covington,” Wagner said in October.
If the sales tax increase had passed, the city would have gained about $800,000 a year in the budget for road maintenance and operation. This would double what is brought in by car tabs. Sales taxes are unique in a way because instead of taxing a certain group in a localized area, it would be a tax anyone shopping in Covington would pay.
“Right now we have one of the lowest sales tax, we only have an 8.6 percent sales tax ($0.086 for every $1),” Wagner said. “Because we are not inside the Regional Transit Authority. So when you go into Kent or Auburn it’s at 10 percent for sales tax because that extra portion goes to Sound Transit.”
City council will consider adopting the final Fiscal Year 2020 Operating and Capital Budget at the upcoming Dec. 10 City Council Meeting. There will be a public hearing where residents can voice their opinions about the potential cuts at the upcoming regular council meeting at 7 p.m. on Tuesday, Nov. 26.