We want to thank the Kent City Council for continuing to have conversations about the business and occupation (B&O) tax. We continue to be alarmed regarding the management of this tax.
We have rehashed this issue multiple times with the city and maintain that the Kent Chamber of Commerce was presented a list of projects that were in such dire need of repair that we had no other choice than to become part of the solution by agreeing to a B&O tax.
In multiple presentations and conversations it has been stated that key arterial roads were declining and that as we continue to let that infrastructure crumble due to a lack of funds, the more expensive the repairs become, eventually leading to an entire road replacement.
We supported Council President Dana Ralph’s amendment to the ordinance that gives a two-year window 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 in May of 2015. We understand that this debt will be paid down at the end of 2015 and for the next year, B&O funds will again be diverted from arterial street projects to city projects that have nothing to do with our city’s crumbling arterial infrastructure, which the B&O tax was meant to address.
We ask that this ordinance again be reviewed to make sure that B&O funds are used for the original intent of the tax, street paving, not to be spread over the city budget to pay for projects that have nothing to do with street paving.
The Kent Chamber was presented with the threat of road closures and skyrocketing costs for repair 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 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.
As the years go by, those priority projects that were identified for the original tax continue to deteriorate, multiplying the cost of repair. Of the projects presented for B&O tax use in 2016, almost $2 million in project costs have nothing to do with the original issue that was presented to the business community including:
• $950,000 in contracting work for pavement markings, overhead sign replacement, guardrail replacement, traffic island rehab, crack sealing, additional sidewalk ramp upgrades
• $765,000 in sidewalk replacement and sign retro-reflectivity and another residential road project on Gowe and Kennebeck Avenue
• $200,000 in traffic loop replacement and traffic signal controlling
Diverting $1,915,000 from the 4,615,000 of proposed B&O funds to projects that have nothing to do with the crumbling infrastructure that we were presented with in the first place violates the very essence of the agreed upon B&O tax and continues to compound the problem we are facing with our key arterial and freight mobility infrastructure.
The Kent Chamber took an unprecedented stance when we worked 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 to fund streets that included:
• B&O tax for street maintenance for arterial roads
• A property tax levy for residential streets that failed
• An efficiency study of the city that yielded no savings
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 arose including:
• Failure of the city of Kent to continue to fund street projects at the rate it was previously funding them, $1 million annually as agreed upon
• Borrowing of the B&O tax funds for projects not on the list of arterials that were threatened 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 circumstances. Unfortunately, the majority of these projects have not been addressed to date
We ask, again, that the B&O tax be used for its original purpose for street maintenance on arterial roads. Please stop diverting these much needed funds.
Andrea Keikkala, CEO of the Kent Chamber of Commerce, can be reached at 253-854-1770, ext. 140, or andreak@kentchamber.com.
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