Faced with a budgetary squeeze, the city of Bingen is weighing a proposal to boost the local sales tax by one-half of one percent. If approved, the move would increase the sales tax on retail goods sold within the city limits of Bingen from 7.0 percent to 7.5 percent.
A public hearing on the proposal is set for Nov. 16 at Bingen City Hall.
"Our revenue has been pretty stagnant for awhile. We have to look at other revenue sources," said Mayor Brian Prigel during the Oct. 19 City Council meeting. "We have to consider the extra half percent of sales tax, which is not popular, but we have to do something."
Prigel said he thought the sales tax was necessary.
"I'm tentatively recommending that the council pass it. The Budget Committee made that recommendation as well," Prigel said. "Our revenue for our general fund -- police, fire, legislative, jail, and streets -- has been getting slowly squeezed. Essentially, our revenue has been stagnant for about 10 years. while costs are steadily going up."
According to Prigel, the added sales tax would bring in an extra $45,000-$50,000 to the city's general fund.
"There is no fluff in this budget. Our current expense fund is short about $19,000, while our street fund is $14,000 short," Prigel said. "This would get us out of trouble and would cover our needs."
Jan Brending, Bingen's city clerk/treasurer, pointed out that the sales tax boost would add an additional five cents to the cost of a $10 item. The current tax for an item purchased within the city limits of Bingen would be 70 cents; it would be 75 cents if the City Council approves this proposal.
Brending also pointed out that there are only four cities in the state of Washington that have not adopted the optional one-half percent of sales tax to provide extra revenue. Those cities are: Bingen, Stevenson, Asotin, and Clarkston.
The City Council of White Salmon voted to boost its sales tax to 7.5 percent in January 2003, although the action sparked controversy and strong opposition within the business community.
"If a majority of the council thinks this is a good idea, we'll move it to the next stage," Prigel said.
Bingen City Council member Jeanette Fentie said she was reluctant to support the proposal.
"I know we need to come up with money somewhere, but we have struggling business owners now, and now we're talking about slapping them with an added tax," Fentie said. "Our community has been hammered lately, and it's hard to justify. Our businesses are struggling. It gets overwhelming. I'm concerned for the business owners. We've put them through a lot, and I don't want them to get hammered again."
"Bear in mind we put these people through two years of disruption with the downtown construction," added council member Betty Barnes. "We are also a border town."
Brending noted that the city needs revenue in reserve in the event of an emergency.
"I don't like the idea of raising the tax, but if we don't make up the difference in revenue by doing something, there will be more impact on citizens," Brending said. "If we don't have money in our reserve account to deal with a flood, we will be in trouble."
Prigel said if the council approves the tax in November, the earliest it could go into effect would by March 1, 2005.