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City Council Approves Auburn B&O Tax, Rejects Grocery Worker Hazard Pay

The Auburn City Council voted on four ordinances and two resolutions during its regularly scheduled meeting May 17th. (watch the full meeting)

After hearing submitted audience participation, committee reports, and passing the consent agenda the council moved to ordinances.

Ordinances


B&O Tax

First on the agenda was Ordinance 6814 (text), which would create a city business & occupation tax.

Deputy Mayor DaCorsi opened comments with the following statement: (watch here)

“First on this ordinance, I definitely want to thank [Finance Director] Jamie Thomas for all of her diligence, her hard work, her working along with [the] council, her communications with us. The presentations she’s done the efforts she’s done within the business community and all the other items that have been there to present this ordinance to us tonight.

The first one to say that has to be aware of the current biennial budget was adopted by council with the assumption that included a b&o tax provision. This assumption requires additional information, research, data, analysis, review, communications, conversations, presentations, and discussion to provide for final decision making by this council. There are a series of virtual meetings that were held with the [Auburn Area Chamber of Commerce] membership. I attended eight out of nine levels were two meetings with chamber business members on the proposed tax. The message from the business community at that time was there was no support for local b&o tax, presently. Just as a reminder, the membership with the Chamber represents a small percentage of businesses that are located in the city of Auburn. Since those virtual meetings, is my understanding that the lack of support for b&o tax is not significantly changed in the business community. Yes, there are businesses that would support this measure. I have also received calls from businesses that are completely opposed to this tax. And I did have one conversation with a local business owner, who was definitely in support of this tax.

As of last week, Governor Inslee announced the plan to reopen the state, 100%. If everything stays as it is now, as of June 30 we will be open. However, that does not mean that businesses automatically flip a switch and it becomes business as usual as it was prior to the pandemic shutdown, there were restrictions were put in place. Businesses have reported it can take up to two years or more to make up losses to fully recover from the pandemic, even with receiving the PPP grants and city grants to help businesses survive.

Now we’re beginning to experience a rising consumer goods pricing that in some cases reflects double-digit percentage increases. Businesses are also reportedly experiencing a labor shortage, with the reopening plan as people have not committed to returning to work yet. Others may not come back to work until the end of the benefits they receive on unemployment, and others will have other employment decisions to make now that they may have even more job choices. Also with the current increase in inflation has been reported. Consumer confidence may be affected, leading to reduce consumer spending or perhaps less disposable income as prices continue to rise that also potentially may affect business profitability.

For the city budget situation during the b&o tax legislation presentations, during that time I suggested to council that we take a look at and conduct a budget review to see what a potential 12% budget cut would look like. And as a reminder, that is not the mayor’s responsibility. That is not the department director’s responsibility. We as a council are responsible for policy and budget, is our primary responsibility to conduct that analysis, if we so choose. There was not a consensus by council at that time to do that analysis.

As a reminder, we all know, The city of Auburn is a municipal corporation, the keyword here is Corporation. We must conduct and manage our business as any corporation would do. The difference we have is by law, we must have a balanced budget, unlike the business world corporations, who base on profit and loss, and operating loss. We cannot do that.

Yes, we definitely do have taxing authority. But we also must look always at what levels of service our residents and businesses are willing to accept. And if there are alternatives if any, to providing services. I fully acknowledge and understand with budget cuts me. And the effect on services and potentially on the workforce. I’ve had to deal with that unfortunate circumstance with my responsibilities under Municipal Corporation leadership roles when I was associated with housing authorities, and it was painful.

The current proposed legislation also does not address the concern of compounding budget issues that will extend beyond 2022 Yes, this legislation will help support that, but it does not address the major concerns that will need to be addressed in future budget presentations that this council will have to consider, or other councils will have to consider. Our revenues are increasing slightly, our expenditures are increasing more as we know. This tax in my opinion becomes a short-term measure and does is not totally fixed in the future. I also do not believe that we can continue to tax ourselves out of situations, and other decisions may need to be considered or made that decision-making process may be concluded now.

Lastly with the lack of major support from the business community on this tax and with the offending budget issues moving forward. I do not feel, at this time, that this ordinance should be enacted. Thank you.” 

Councilmembers Brown, Baggett, Trout-Manuel, and Jeyaraj shared their thoughts on Ordinance 6814 before the vote. The ordinance passed in a vote of 5-2, with Deputy Mayor DaCorsi and CM Trout-Manuel voting no and CMs Baggett, Brown, Jeyaraj, Mulenga, and Stearns voting yes.

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Grocery Worker Hazard Pay (watch here)

Ordinance 6818 (text) would require large grocery chains (employing 250 or more employees worldwide) to pay $4 per worker per hour.

Councilmember James James Jeyaraj made a motion to increase the number of employees to qualify a store, as well as reduce the amount of pay per worker per hour. Without a second the motion died on the floor. of was voted on by the council. Councilmember Larry Brown made a motion with the intent of splitting the two acts of CM Jeyaraj’s motion. CM Brown’s motion also failed to receive a second and died on the floor.

In a vote of 4-3, Ordinance No. 6818 failed. Deputy Mayor Claude DaCorsi and Councilmembers Bob Baggett, Robyn Mulenga, and Yolanda Trout-Manuel voted no. Councilmembers Chris Stears, Brown, and Jeyaraj voted in favor of the ordinance.

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Auburn Municipal Airport

Ordinance No. 6820 (text, watch )and No. 6821 (text, watch) concerned both the new management structure and operations of the Auburn Municipal Airport. Both ordinances were approved unanimously by the council.

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A plane taxis at the Auburn Municipal Airport | Photo by Andrew W. Sieber

Resolutions

Council also unanimously approved Resolutions No. 5593 (text) and No. 5596 (text).

Resolutions No. 5593 was an acknowledgment of the council’s review of the new Auburn Valley Humane Society fee schedule, expected to go into effect July 1. Resolution No. 5596 authorizes the Mayor to execute an Ingress, Egress, and Air Rights Easement burdening City-owned property for the benefit of Auburn City Center Senior Living Associates, LLC.

Public Comment

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