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City of Newcastle

Referendum No. 2
Levy of Utility Taxes

The Newcastle City Council passed Ordinance 2020-609, which levies 3% utility taxes on the total gross income of utility businesses providing telephone, cellular phone, gas distribution, light and power, cable television, sewer, solid waste, and water in the City to fund public safety services (police, fire). Under the ordinance, the utility taxes would take effect January 1, 2021.

 

Should this ordinance be:

 

Approved

Rejected


The Newcastle City Council passed Ordinance 2020-609, which levies a 3% utility tax on the total gross income of utility businesses providing telephone, cellular phone, gas distribution, light and power, cable television, sewer, solid waste, and water in the City to fund public safety services (police, fire). Under the ordinance, the utility taxes would take effect January 1, 2021.

Referendum No. 2 is presented to the voters pursuant to state law, which provides a process for the voters to approve or reject the City’s utility tax ordinance. If the measure is approved it will uphold the 3% utility tax. If the measure is rejected it will overturn the 3% utility tax. 

If approved, it is estimated that the 3% utility tax will generate approximately $880,000 in revenue per year based on both residential and commercial utility customers. Based on a total of approximately 5,500 residential dwelling units in the City, the average residential household would pay just over $10 a month on utility taxes. A smaller home or apartment may pay less and a larger home may pay more. The City anticipates using the projected utility tax revenue to pay for public safety (fire and police) services, as the City’s 2020 budget identified increased costs relating to police and fire contracts in the future.
 

Why raise taxes now of all times? Because it’s the only way we can maintain the police, fire, park and street services that make living in Newcastle so special.

For 26 years, the city has budgeted carefully and avoided collecting taxes, such as utility and B&O, that are levied by nearly every other city in King County. It was able to do this because it relied on fees from new development. But vacant land is nearly gone, and with it has gone the city’s income from new development. Meanwhile, expenses have risen at the rate of inflation, while property taxes can increase only 1% each year. City staff headcount, excluding police, is the same as it was in 2009, even though population has grown 25%.

Residents say that public safety and traffic control are high priorities. Without new tax revenue, city services you desire cannot be maintained. The proposed utility tax is 3%, with no provision for increases. It will cost an average residence $10 per month. Isn’t that a reasonable price for our continued safety, a quick response to a 911 call, decent streets, and good parks?

Get the facts and estimate your utility tax at FriendsforNewcastle.org.

Charlie Gadzik, Diane Elaine Lewis, Nathan Stix, friendsfornewcastle@gmail.com

Newcastle does not need 9 new utility taxes (cable, telephone, cellular, gas, electricity, water, surface water, sewer, solid waste) impacting every resident and business. Timing could not be worse given the COVID-19 economic challenge. With over $5.2 million in cash reserves—the most in history—our city refuses to focus on reducing expenses and controlling costs before adding new taxes. 

Newcastle has consistently overestimated an imminent need for additional revenue. In 2019, Newcastle staff’s deficit estimation was incorrect by over $700,000.  Council shows repeated lack of restraint in spending your money wisely.  Historically, Council has excessively increased salaries, benefits, and headcount – the worst possible area to escalate.

This Utility Tax begins at 3% and can easily increase to 6%+. Your Newcastle fee on garbage is already at 8.49%, just implemented in 2019, and jumps to 11.49%.  This tax will negatively impact Newcastle businesses who will understandably pass much of it on to customers.

Newcastle government was intended to be small and efficient, keeping expansion and taxation minimal.  Proponents falsely claim that police and fire services will be reduced without this tax. Voting no will not reduce existing services. Force your city to practice fiscal discipline. Reject this new tax.

Tamra J. Kammin, Kandy K. Schendel, Robert Clark, citizens4newcastle@gmail.com

Good management and cost controls are what produced Newcastle’s reserve. Salary increases over the past 10 years have simply matched the local economy. Newcastle has already reduced staff and is drawing on the reserve to pay regular operating expenses.

State auditors warn that a long-term solution is required. Our choice is to either raise taxes or face certain cuts. You can preserve services for about $10 a month. If you love Newcastle, vote “yes.”
 

Making voters think emergency services would be cut is terribly misleading. Property tax alone covers Police and Fire (Newcastle’s top priorities). Our highest-ever reserves, $5,215,340, exceed policy requirement by $2,500,000. Development and re-development fees also provide continuing revenue.

In 2012, through fiscal discipline, City headcount was 21, but has now ballooned to 27. Businesses and residents will be hurt by these 9 taxes, easily increased by Council vote.  Vote no, stating loudly, “practice fiscal discipline.”
 

Simple Majority (RCW 35.17.240)

For questions about this measure, contact: Paul White, City Clerk, (425) 649-4143 ext. 102, cityclerk@newcastlewa.gov

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