Medina, Washington (population 3,217) is getting more than its fair share of media attention. Most of the time this hamlet near Seattle is associated with wealth and famous residents like Bill Gates and Jeff Bezos. But recently it has been noticed for something different: The city is running out of money to pay for such basic services as police, firefighting, and parks.
How can this be? As a statement on the city's website puts it, "The cost of providing basic services is growing faster than the available revenue streams --expenses have risen an average of 4 to 5 percent per year while revenue has grown at an average of 2.5 percent per year." Given that the median home price in Medina is more than $2 million and the median income, at $186,464 in 2017, is triple that of the rest of the country, the solution to Medina's shortfall may seem obvious: Raise taxes.
The problem is, the town can't. Or, to be more precise, its public officials don't have the authority to increase the property tax, which is the mainstay of the town's revenue, by enough to cover the shortfall. Under a 2007 state law, Washington's local governments cannot increase the amount of revenue they collect by more than 1 percent annually. However, the law offers a remedy: Ask voters for permission to raise the cap.
There are strong opinions about the wisdom of not allowing elected officials to control their governments' tax policy. Some think it is onerous and inefficient, while others think it is democracy at its best. Sidestepping whether such a policy is wise or unwise, the reality for cities in Washington and in most other states is that when it comes to increasing property tax rates beyond a state-imposed limit, voters are the deciders, and therefore public officials need to be deliberate about including them.
But how? Each local government is unique, but all would do well to learn from the experience of Roseville, California, which undertook a process to educate the community about the budget and learn how it prioritizes city services. EngageRoseville was a cross-departmental initiative that focused on research, education, and, as its title suggests, engagement with taxpayers. The research found, unsurprisingly, that the community was not enthusiastic about paying more in taxes. However, it also found that residents were "keenly interested in preventing any erosion of services they value."
Education and engagement strategies included formation of an advisory committee...