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Pasco staff propose 1.5% increase to city-owned utility tax to close budget gap
Summary
Staff recommended raising the utility tax on city-owned services from 8.5% to 10%, generating an estimated $900,000 annually; council asked staff to return with options and suggested earmarking uses for any new revenue.
City staff told the council that raising the utility tax on city-owned services from the current 8.5% to 10% would yield roughly $900,000 in annual general-fund revenue.
Miss Sigdell, presenting the proposal, said the city relies on utility taxes as a major revenue source and that "every 1% provides you with about $600,000 more" in revenue; the proposal under discussion would apply only to city-provided utilities (water, sewer, stormwater, irrigation and the process-water reuse facility) and would exclude some services such as electric and gas that are subject to caps or voter approval.
Council members asked for clarity about how new revenue would be used. Council member Perales said he was a "soft no" unless the council specifies how the funds will be allocated (for example, police/fire, parks and rec), and others asked for options and clearer fiscal targeting. Council member Barajas supported the recommended 1.5% but noted the burden on taxpayers. One resident asked whether the increase would be applied to privately supplied utilities; staff clarified the increase would be limited to city-owned services.
Staff left the item seeking direction and said they would return with options and more detail on uses and allocation if council requested it. No vote was taken during the workshop.
