Redmond needs more money if it is going to meet the needs of the growing community, Mayor Rosemarie Ives told the City Council during a...

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Redmond needs more money if it is going to meet the needs of the growing community, Mayor Rosemarie Ives told the City Council during a recent study session.

Ives is proposing to increase property taxes, development fees and business taxes, which would boost the city’s budget by $16.7 million.

The additional revenue would allow the city to restore and increase services that have been cut in recent years, Ives said. The city has had to cut services, in part, because of weaker than expected city revenue from development fees and statewide initiatives that have capped property taxes. The city also is using $1.7 million in one-time funds to balance its 2005-06 budget.

The mayor is proposing to increase property taxes by 93 cents, to $2.25 per $1,000 of assessed valuation from $1.32. The new rate amounts to $225 per $100,000 value, or $675 for a $300,000 home. The city would receive about $8.7 million annually from this increase.

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Under the proposal, the city’s business tax, which taxes businesses for each full-time employee, would increase by $93 annually, from $83.25 to $176.25, per full-time employee. The increase would boost the city’s revenue by $6 million annually.

The city also would implement various development fees to raise an additional $2 million annually.

The council will begin hashing out the details of the mayor’s proposal at an all-day Saturday session on Aug. 6. If council members approve an increase in taxes, residents will vote on a ballot measure in November.

The council agrees that the city needs to increase its revenue to bring its level of services up, said City Councilman Richard Cole. The question is, how much?

“It’s the amount she’s asking for that I’m staggering with,” Cole said. “The council is not going to rubber stamp her proposal. … I think it’s unlikely she’s going to get as much as she is proposing.”

Cole said he is worried about the effects the tax increases could have on residents and business owners. Many of Redmond’s businesses are small, with fewer than 50 employees, and the tax would have a big impact on them, he said.

“Microsoft would pay the most. They are a successful company … , but the burden would fall on our small businesses,” Cole said.

Rachel Tuinstra: 206-515-5637