City council continues to spar over tax credit for commuters

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Marysville City Council may create an ad hoc committee to explore a possible commuter tax credit, but it likely won’t happen this year.
At the July 28 council meeting, a pair of residents joined council member Aaron Carpenter in asking council to create an ad hoc committee to study all forms of municipal taxation and to present recommendations to City Council.
During Monday’s work session, Council President Henk Berbee, who also serves as the mayor said he is not opposed to the idea of a committee to explore options that could include a commuter tax credit as well as other tax and revenue options, but would like to have more information to give the group as it starts.
“Before you can appoint a committee, you have to know what you are looking for,” Berbee said.
Berbee said council is in the process of updating the city’s strategic plan.
He said that document should help the city make decisions about cash on hand, infrastructure maintenance and improvement, increasing the income tax and a third public service building.
He added that the 2021 city budget and revenue projection should be taking shape soon. He said those items will help provide direction to the group.
Finance Director Brad Lutz said council should have a budget to look at in early September. The budget’s first reading is expected Oct. 21 with a final reading Nov. 25. He said spending will likely be higher than 2020 and revenue will be projected lower.
Council member Mark Reams said members have “a lot of competing priorities.”
He said that he would like to hire a financial consultant to look at the city operations.
“I’d like to maybe get someone to come in and see how Marysville is doing compared to some benchmarks,” Reams said.
He added that, “maybe there are some things we could be more efficient in by looking at these other communities.
Carpenter agreed it would be “helpful” to look at how other communities of similar size spend and raise money, but wanted to come back to creation of a citizen committee.
Council member J.R. Rausch said he is frustrated by Carpenter asking for more options and takes “offense” to the idea that council hasn’t already done the research.
Currently, a Marysville resident who works in another community pays income tax in both the city where the income is generated and also 1.5% in Marysville, where they live. Many communities extend commuters a tax credit for residents who work in another community.
Officials have said a .25% tax commuter tax credit would reduce city revenue by $640,000 each year and a .5% credit would reduce revenue by $1.2 million annually
Rausch said he has told Carpenter that if he can find the $600,000 or more to cut from the budget, he would consider a commuter tax credit.
“We have never seen a proposal from you on what we should cut,” Rausch told Carpenter.
Rausch said any credit should go before the voters, though it is too late to meet the deadline for this November’s ballot. He said the committee could be formed at the beginning of the year and have recommendations in time for the November 2021 election.
He said he didn’t know how Carpenter could keep his campaign promise of not raising taxes and continue to fight for a commuter tax credit.
Rausch said council should not even discuss the matter because it causes “infighting within the community.”
“That’s a dangerous situation because you might get a lot of people who don’t like their neighbor because of politics,” Rausch warned.
Carpenter responded saying council could give a much smaller commuter tax credit, preserving more revenue “and you would make a lot of people happy.”
He said he agrees the matter should go to the public for a vote.
Council member Deb Groat said the matter is not about the dollars.
“I see it as who gets preferential treatment in the City of Marysville,” Groat said.
She said a commuter tax credit would give residents an incentive to work outside the city. She said it would not matter what the ad hoc committee would recommend, she believes a commuter tax credit unfairly shifts the burden for lost revenue onto residents who work and live in the community.
City Manager Terry Emery said he agrees with a lot of what was said as part of the meeting. He said is on board with an outside evaluation of the city operations. He also said he would be in favor of an ad hoc committee, but feels like the city’s strategic plan should be finalized before the committee is formed.
Lutz agreed saying he “cannot emphasize enough how strongly I believe we need to finish the strategic plan.”
Berbee, who has the authority to create the committee, said he will wait until the strategic plan has been completed. He said council will discuss financial priorities at the September work session.
Council is also in the process of creating a Charter Review Committee. The committee is formed every four years to review the city charter and recommend changes. Those changes must be approved by city voters.
Each council member will nominate one committee member. The full council must approve those nominations and will select two additional members.



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