More cross-border traffic and a stronger real estate market, cited by staff
By Stefanie Donahue
Blaine is increasingly becoming a destination to shop, play and, for some, live.
That is according to the city’s finance director Jeff Lazenby, who in a presentation to Blaine City Council this week forecasted that the general fund will increase to $6.7 million next year, up 3 percent from 2018.
“This forecast reflects the strong retail sales growth that we’re seeing currently as well as overall construction activity,” he said.
A slurry of taxes and fees, such as sales, utility and property taxes, contribute to the general fund, which can be used to pay for city administration, police services and utility billing, for example.
Lazenby said the city’s sales tax revenue is projected to reach $1.79 million in 2019, up from $1.6 million in 2018, partially as a result of the Marketplace Fairness Act.
The law went into effect on October 1 as a result of a Supreme Court decision which ruled in favor of allowing states to collect sales taxes on online purchases. Moving forward, businesses that have an online presence in Washington, but are headquartered in another state, must collect and submit retail sales and use taxes if they exceed $100,000 in sales to or 200 transactions with Washington purchasers.
“We will definitely see a boost from that next year,” he said.
Overall, the city retains just 12 percent of the total sales tax collected, while 75 percent is remitted to the state. The remaining portions are divided among Whatcom County and the Whatcom Transit Authority, among others.
The city’s budget projections factor in a 1 percent property tax increase, which Blaine City Council will be asked to approve on Monday, November 13. During the October 22 meeting, the council held a public hearing on the matter and closed it after receiving no comments from the public.
The 1 percent increase would generate approximately $11,385 in revenue for 2019, Lazenby said. For property owners with a home valued at $300,000, taxes would raise an additional $4.30 per year.
The city’s total property tax revenue is expected to reach $1.3 million for 2019, he said.
The city retains 13 percent of the total property tax collected, while 28 percent is remitted to the state’s general fund and 25 percent to the Blaine school district. The remaining monies are divided among Fire District 21 and the Port of Bellingham, among others.
Lazenby also projected a 12 percent increase in revenue from the city’s penny-per-gallon gas tax, for a total of approximately $190,000 in 2019, he said.
“This projection reflects increases we see with cross-border traffic,” he said. “The increased cost of gas in Canada is why we’re seeing more cross-border traffic.”
The city’s real estate excise tax, which is applied to all real estate sales in the city, is also expected to see a significant increase in revenue, rising to around $500,000 in 2019 from approximately $350,000 in 2018, Lazenby projected. The tax pays for specific capital improvements to streets, parks, water and sewer projects.
“The projection is reflecting current actuals and the strong real estate market that we’re seeing currently,” he said. “I anticipate that will continue into next year.”
The city’s annual budget will be the focus of several upcoming public meetings.
Blaine City Council will vote on the 1 percent property tax increase during the Monday, November 13 meeting at City Hall, 435 Martin Street, which starts at 6 p.m. A public hearing on the budget will be held at on Monday, November 26 at city hall, starting at 6 p.m.
The council is scheduled to vote on the budget on Monday, December 10.
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