After much delay and deliberation, the Vancouver City Council on Monday night approved a replacement funding plan for police services.
The funding plan has endured several iterations after an initial proposal from Vancouver Strong — an advisory committee tasked with developing a sustainable funding plan for the city — received pushback from the nonprofit community.
The yearlong process began because the council needed to find an alternative funding mechanism to stop a looming per-square-foot tax on multifamily housing and businesses.
The new mechanism increases the existing business license fee from $125 to $200 annually on all businesses, including nonprofits. The existing $90 head tax will continue to apply to businesses and exempt nonprofits, but the cap for businesses with more than 400 full-time employees will be phased out over the next two years. To come up with the full $6.1 million needed to fund the police department, utility taxes will also increase a total of 4 percent. In 2019, the tax will increase 2.4 percent and an additional 1.6 percent in 2020. Vancouver’s Chief Financial Officer Natasha Ramras said the tax increase on utilities will increase the average customer’s monthly bill from $77.20 to $88.10 when the increase is complete in 2020.
Nonprofits still disapprove of the amended proposal.
JoAnn Crabtree, representing Washington Nonprofits and executive director Laura Pierce, said they appreciate the scaled-back proposal but the current iteration is still too costly for nonprofits and could take charitable resources out of the community.
“Few, if any, donors would consider this to be an appropriate use of their donations,” Crabtree said. “Raising taxes on nonprofits is not the best way to address this need.”
Nonprofits with revenues amounting to less than $12,000 a year are exempt from the business license fee. The tax, however, is essentially based on the honor system. Ramras said the city will ask known nonprofits to self-report their revenues and staffing numbers and levy the tax based on those reports. The business license fee program actually relies entirely on self-reporting, City Manager Eric Holmes added.
Although the plan was unanimously approved, some issues still linger.
Councilor Ty Stober said there are two major holes they have yet to close. Credit unions do not all pay the tax and one of the largest employers in Southwest Washington, PeaceHealth, is not subject to the head tax.
Barring a solution at this time, the council was relatively pleased with the solution.
“It is our challenge to try and find ways we can share the investment in our community … as fairly as we can,” said Councilor Linda Glover. “We’ve had a lot of resources and a lot of study has gone into this. At this time I feel comfortable with the solution we’ve reached.”
Councilor Bill Turlay added that police services, and emergency services in general, are not free.
“We have to find a way to pay for those,” Turlay said. “The nonprofits, I understand what you’re talking about, but those services are available to you. We would like you to (help) cover the cost.”
The tax will go into effect Jan. 1, 2019.
