Editor’s note: This is a Kent Chamber of Commerce’ letter addressed to the City Council. The council is scheduled to vote during its 7 p.m. Tuesday, May 5 meeting about whether to override Mayor Suzette Cooke’s veto of a B&O tax amendment ordinance to spend all excess funds on street repairs. Cooke prefers the money be used to help pay down city debt.
We want to thank you for continuing to have conversations about the business and occupation (B&O) tax. While the Kent Chamber of Commerce is disappointed that the original ordinance that directed any excess B&O funds immediately to street maintenance failed, we understand the need for compromise and for the City of Kent to dig itself out of the debt that incurred during the Great Recession.
We support City Council President Dana Ralph’s amendment to the ordinance that gives a two-year window of time to pay down debt with any B&O funds above the original agreed upon numbers of staff costs ($700,000) and the $4.7 million to street maintenance. We understand that this amendment will then direct any excess B&O funds back to the original intent of the B&O Tax to fund street maintenance, so that all B&O funds go directly to street maintenance starting in January 2017.
It is our understanding from conversations with city staff regarding the increase of staff costs that went from $300,000 to $700,000 that the money would be used to hire additional staff in order to audit the business community, thus bring in more money. This would essentially pay for the additional staff, which will increase the B&O funds and bringing all businesses into compliance.
It is also our understanding that to date no audits have been done. We are extremely disappointed in that we agreed to the need to more than double the staffing cost, but have not seen any positive movement in audits. Furthermore, we ask that you ensure that any annual staff costs that are not incurred out of the $700,000 designated for staff costs for the B&O tax be put into the funds for street maintenance not rolled into CIP.
We urge you to overturn Mayor Suzette Cooke’s veto of the amended ordinance immediately. The majority of you were present for the months of meetings that led up to the vote to implement a B&O tax in 2012. We have had many conversations regarding this tax and how it is allocated. The Kent Chamber took an unprecedented stance when we agreed to work through the difficult budget for street maintenance. We operated in good faith to come up with a solution to fix our crumbling arterial infrastructure when we moved forward with the city with the implementation of the B&O tax for street maintenance.
We have made multiple concessions in the years after the implementation of the B&O tax, including the crumbling of the three-legged stool that funded streets, which included:
• B&O tax for street maintenance for arterial roads
• A property tax levy that failed for residential streets
• Efficiency study of the city that yielded no results regarding the $2 million that was allocated in the three legged stool approach.
The fundamentally flawed and heavily burdensome B&O tax on the business community is the only funding mechanism for street maintenance that is in place today. In addition to the destruction of the three-legged stool, many issues have arose, including:
• Failure of the city of Kent to continue to fund, as agreed upon, the street projects at the rate it was previously funding them at $1 million annually.
• Mayor Cooke’s most recently proposed budget to increase the B&O tax rates to balance the city’s budget.
• Borrowing of the B&O tax funds for projects not on the list of arterial road that were said to be shut down if not repaired. Thus diverting much needed capital to start working on the agreed upon project list.
• A disintegration of the original project list that was presented to the business community and a failure to honor that list. It was our understanding throughout the conversations that these projects were to be completed right away to avoid dire, road closing circumstance. Unfortunately, the majority of these projects have not been addressed to date.
The Kent Chamber of Commerce was presented with the threat of road closures if something was not done. We recognized this funding need and our responsibility and collaborated with the city to find the solution of a B&O tax, which we supported at minimal levels for street maintenance on arterial roads only.
However, since the passage of the B&O tax it has been a continuous dialogue with the city to prevent multiple attempts to divert funds to additional projects and raise the B&O tax. We are frustrated with this continuous assault on our efforts to provide solutions and are furious with the erosion of trust that has resulted in the continuous attack on our agreement with the city of Kent when we moved forward, in collaboration, to provide solutions to funding our crumbling infrastructure.
Please vote yes to overturn Mayor Cooke’s veto. The Kent Chamber has made yet another concession regarding the B&O tax for the next two years in hopes to get back to the original intent of the B&O tax and stop this ongoing money grab and diversion.
– Andrea Keikkala, CEO, Kent Chamber of Commerce, 253-854-1770, ext. 140, andreak@kentchamber.com
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