Why Sequim’s sales tax revenues are falling short

SEQUIM — You’d think the streets would be paved with gold. Not potholed.

By North Olympic Peninsula standards, Sequim has become big-box rich, with a new Wal-Mart in late 2004, The Home Depot in 2005, Costco and Petco in 2006 and Office Depot, Sleep Country Plus, Popeye’s Chicken and a slew of others opening in 2007.

Sales-tax revenues swelled apace, as people came, saw and shopped.

In 2005, Sequim reaped $2.138 million from taxable sales. In 2007, it was $2.395 million.

Contrast that with Port Townsend, whose population is 9,069 to Sequim’s 5,951. The Jefferson County city collected $1.65 million in sales-tax revenue last year.

The Sequim City Council is asking voters to approve a sales-tax increase of 0.2 percent in the Nov. 4 general election.

The hike would bring Clallam County’s 8.4 percent sales tax to 8.6 percent inside Sequim only. A $10 restaurant meal here would have 86 cents tacked on instead of 84 cents.

The increase, Mayor Laura Dubois says, could pour some $600,000 in new revenue straight onto Sequim streets.

If voters pass the ballot measure, the money will be earmarked for street improvements: new or repaired sidewalks, fixed potholes.

Dubois adds that the city needs the tax increase because it has several long-overdue street projects in older neighborhoods.

Fir Street, which fronts Helen Haller Elementary School and the Sequim Boys & Girls Club, has a sidewalk on only one side, for example.

At the same time, sales-tax flow has slowed in 2008, along with the nation’s economy. Sequim Finance Director Karen Goschen projects a nearly $400,000 drop from last year’s revenue.

Dubois expects the 2009 budget process to be a painful one, with another drop: $300,000 less in building-permit and utility-hookup revenues this year.

But why didn’t the city fix streets and lay sidewalks during the big-box boom years of 2006 and ’07?

“Good question,” Dubois said.

Then she looked to something this city of 5,951 did pour money into: the Police Department led by chief Robert Spinks since 2005.

The police budget, over the past three years, has almost paralleled the sales-tax revenue figures.

“They’re about equal,” Dubois said, holding up both palms as if to weigh the two amounts.

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