Palouse eyes adding water/ sewer tax

Palouse residents may soon see their water and sewer bills increase if the city council votes in a proposed six percent tax on utilities.

Because the town’s general fund has been receiving less in city assistance funds from the state, the city is considering other ways of increasing revenue.

Also contributing to the revenue bind is a steep drop in the interest rates off the state investment pool where cities and towns park excess funds.

Interest earning for the state Local Government Investment Pool has dropped to .45 percent from 5.2 percent in 2007. That drop has impacted cities, towns, counties and smaller taxing districts around the state.

“It’s just been slipping away,” said Joyce Beeson, Palouse clerk/treasurer.

Palouse City council members at the Sept. 8 meeting said that while they are leaning toward the utility tax route to boost city funds, they are also considering opening the city pool two weeks later than normal or canceling council salaries.

“You get past those items, you start talking about cutting bodies,” said Councilman Mark Bailey, meaning staff cuts could follow if the other options don’t work.

If the city votes in the utility tax, it stands to gain an estimated $16,000 in additional revenue. The tax would be put in place Jan. 1, 2010, Beeson said in a later interview.

The city would take this extra income and put it back into their general fund to boost their budget.

Around 545 water bills were sent out by city billing last month. The minimum water charge in Palouse is $17.50 and the basic sewer charge is $21.

The option to impose a tax on water and sewer bills was already written into the city’s code when rules on utility bills were originally drafted, said Beeson. Other towns around Whitman County, including Colfax, already add a utility tax on water and sewer bills. The Colfax tax is also added to power, disposal, and basic television utilities.

“Now our reserve balance is dwindling to the point where we are going to have to make expenditures and revenue balance better,” Beeson said.