PORT ANGELES — Clallam County has given notice that its 0.2 percent sales tax holiday will sunset April 1.
Commissioners Mike Chapman and Mark Ozias voted Tuesday to notify the state Department of Revenue that the tax on items purchased in unincorporated areas will be restored to 8.4 percent.
Commissioner Bill Peach voted no.
Because county policy requires an ordinance to change the optional sales tax, final action will occur after a public hearing Jan. 26.
The hearing will begin at 10:30 a.m. at the Clallam County Courthouse, 223 E. Fourth St., Port Angeles.
Counties must give the state Department of Revenue 75 days’ notice to change the 0.5 percent optional sales tax.
“I will be voting in favor of this, not because I’m in favor of raising taxes on one of my first votes as commissioner, but because I have serious concerns about the long-term sustainability of the county budget,” said Ozias, who was sworn in as the east county’s District 1 commissioner Dec. 29.
“In consultation with my fellow commissioners and others, I’ve only had those concerns reaffirmed. I believe that reinstating the sales tax to its previous level is a solid first step in terms of helping to address some of the long-term structural problems of the county budget.”
Last April, commissioners voted unanimously to lower the sales tax to 8.2 percent in an effort to stimulate the local economy.
The tax break means a $100 purchase costs 20 cents less now than it did before the reduction took effect July 1.
It also represents a $1 million hit to county coffers if left in place for an entire year.
Clallam County budgeted $4.6 million in sales tax revenue for 2016 based on an earlier forecast of robust economic growth.
County Administrator Jim Jones said he and Chief Accountant Stan Creasey now project that the county will be $450,000 to $500,000 short of the $4.6 million target.
Several elected officials and county department heads urged the board to restore the sales tax rate during a roundtable discussion on county finances Monday.
Chapman, who originally supported the tax holiday, said feedback from other county officials helped change his mind.
“Before the decision was made to cut the sales tax, we didn’t consult with our leadership team,” Chapman said.
“I know I wouldn’t have voted for it at that point if I would have heard what I heard [Monday] last year,” Chapman said.
James Preston of Port Angeles, who testified in support of the tax reduction, criticized Chapman for changing his position.
He urged the full board to put the tax issue on the ballot and cited several Peninsula Daily News articles from last spring and summer that quoted Chapman as saying he supported a permanent tax cut.
Chapman said he accepted the criticism as fair.
“It’s good to be criticized when you’re an elected official,” Chapman said.
“It’s good to be held accountable. But what’s not good is to make justifications. Last year, I believed what I said, and this year I believe what I say, and people can take that for what it’s worth.”
“I wish we had met with the leadership team last year,” he added.
Chapman said the tax holiday was approved before the 2016 budget was set.
“The current budget has upwards of a $3 million budget deficit that was passed,” Chapman said.
“So that, also, changes a lot.”
The $36.8 million budget was balanced through the use of general fund reserves.
The anticipated draw-down would leave $9.2 million in reserve, all but $869,083 of which would be restricted by policy.
“I appreciate you criticizing me,” Chapman told Preston.
“You’re not the only one. I think it’s fair. It is an utter, complete, 180-degree change, but there’s a lot of things in my life that I’ve 180-degree changed over the course of my life. There’s a lot of things in public service that I’ve 180-degree changed.”
As an example, Chapman said he now supports a critical areas code that he opposed when he took office in 2001.
“Probably in the next 11 months, I will 180-degree change again,” Chapman said.
Peach said he opposed raising the sales tax back to 8.4 percent but understood the concerns raised during a “very constructive” meeting with county officials Monday.
“The real issue that I see is the need for sustainability, and it’s measured in the amount of money that’s held in reserve,” Peach said.
“And the idea of moving from a really comfortable place at $12 million to an uncomfortable place at $9 million has people concerned.”
“We’re not always going to agree,” Peach added.
“This is an example. But at least we get along as a team.”
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Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 5072, or at rollikainen@peninsuladailynews.com.
