Several local business advocates are hoping the White Salmon City Council's decision to boost the retail sales tax is not an irreversible decision.
At the Jan. 15 council meeting, Debra Reed, the manager of the Mt. Adams Chamber of Commerce; Robin Hale, owner of Bridge RV Park; and Gordon Malella, former owner of Town Mart Foods (now Thriftway), all slammed the recent vote to increase the sales tax from 7.0 percent to 7.5 percent within the city limits of White Salmon.
"I'm upset," said Hale. "I'm not making a profit on my business yet. You've ducked and weaved and punished the little guy. You can't even look me in the eye. One-half a percent is not much, but when you have to compete, it's a big blow. You've put the whole burden on the businessman's back."
Hale told the council the tax rate change had a significant economic impact on small businesses. He pointed out that bookkeeping, cash registers, and advertising would have to be changed.
"It will cost me $1,200-$1,500 to gear up for this change. It's a nightmare," Hale said.
Malella said the increased tax would hurt the city's retail businesses.
"I totally disagree with the action of the council," said Malella. "If taxable sales in White Salmon go down five percent as a result of this new tax, how much would that reduction be in revenues to the city?"
Kelly Ingraham, the city's clerk/treasurer, responded that other cities have not seen a drop after raising the sales tax.
City Council member Tim Stone said he agreed with the concerns raised by local business owners, but added that he saw no alternative.
"I agree it's a regressive tax," said Stone. "We cut the budget as much as we could."
Hale said one possible solution would be to stop traffic coming off the Hood River Toll Bridge and collecting sales tax for all the merchandise purchased in Oregon.
"Collect the money the county is sending to Oregon every day, instead of punishing a handful of businesses in this community," Hale said.
"As a practical matter, there is no mechanism to collect sales tax from those coming over the bridge," responded Mayor Roger Holen. "The City Council does not have those police powers."
Malella asked if the city had considered any cutbacks in personnel or labor costs rather than raising the sales tax.
Mayor Holen said that had been considered, but personnel cutbacks were dropped because the city did not want to decrease services.
"If someone were to make a concrete case to the council, would the council sit back and say, `we made a mistake?' Is that possible?" Malella asked. "You have businesspeople on record, the Chamber of Commerce on record, the local newspaper on record against this sales tax. Can you close City Hall on Fridays, or whatever it takes to fix this?"
"This need not be the end of the dialogue on how to finance the city," Holen agreed.
However, Holen added that he was not optimistic the sales tax could be ended after one year.
"Frankly, if I were prognosticating right now, I'd say we'd need that extra one-half percent for 2004," Holen said.
Ironically, after the discussion about the sales tax, the City Council approved increased salaries for union and non-union employees on two separate 4-1 votes.
Only council member Tim Stone voted against the pay hikes.
"City employees work hard, but I have a hard time giving approval to a salary increase after approving a boost in the sales tax," Stone explained.
City employees will receive a 1.3 percent wage increase for 2003.