City considering local option tax

BONNERS FERRY — Among the ideas generated at a special city council meeting last week was a proposed future vote on a local option tax.

The Bonners Ferry City Council met Jan. 10 to discuss revenue options to cover the city’s shortfall. Open to the public, the meeting was held as a roundtable discussion.

Bonners Ferry officials are asking the community to come together to help solve the shortfall. To date, the leading community idea from the special meeting is adoption of local option tax of 1 percent to go towards the city’s general fund.

Since the 1950s, the city transferred 5 percent of its gross sales in enterprise funds to the city general fund. This excluded garbage.

Due to a 2017 Idaho Supreme Court case ruling which changed how cities can fund their general budget, Bonners Ferry officials said the city now has a general budget shortfall of approximately $450,000. This shortfall is an ongoing one where the city will have to find ways to cover the general budget each year or make cuts equaling that amount, city officials said.

A local option tax is a tax on taxable goods within a jurisdiction used for funding. The city could run a 1% local option tax on taxable goods to cover the shortfall. The tax is local due to being controlled by a local jurisdiction and anyone shopping in the Bonners Ferry would be paying towards the city’s general fund instead of exclusively city property owners.

The general fund is paid for by the city tax payers and grants. City departments that fall under the general budget include, Bonners Ferry Police, volunteer fire department, streets department, contracted planning and zoning, city pool, golf course and city administration.

The general fund consists of approximately 25 percent of the city’s budget.

At the Jan. 10 special council meeting, the city council and community members participated in a rebound table discussion in order to solve the shortfall.

City Administrator Lisa Ailport provided background on the situation and options for the city provided by Idaho Code.

Other options considered at the meeting were cutting services or increasing property taxes to cover the shortfall. Ailport said she was not for cutting additional services since the city is already running fiscally conservative and she did not want to affect quality of life.

At this time BFPD is still operating 20 hours a day seven days a week and is down one officer. Councilman Rick Alonzo, a former BFPD police chief, said the BFPD has operated with the same amount of officers for 50 years, yet crime is rising.

Due to the rising costs of products and inflation the city is spending more money to maintain the level of service it already provides.

In addition, the city has seen an increase of 12% in health insurance. There were discussions at the meeting to not increase staff pay, but the council has been firm that they want to retain employees and provide a fair wage, especially to staff at low pay grades.

In order to cover the deficit from property taxes alone, city property owners would pay 63 percent more on the line item for the city.

Ailport said in simple math terms, if a home in Bonners Ferry is at a value of $300,000 after expectations, the property owner already pays $700 to the city. With the 63% increase the property owner would pay $1,141. A supermajority of 66% would be needed to pass this tax.

Councilman Rick Alonzo quoted his projected tax increase and said the increase was “ridiculous.”

The city council will discuss a local option tax at tonight's city council meeting, at city hall at 6 p.m.