Revenue forecast appears bleak for Snoqualmie

Snoqualmie city leaders expect to see a dip in tax revenues in 2010, before returning to growth. 

Finance Officer Donya Gregson gave a revenue forecast presentation at the Aug. 10 City Council meeting. She said that the city’s economic engine – the Snoqualmie Ridge development – had slowed due to the recession. As a result, property taxes, which provide the majority of the city’s revenue, are likely to be down.

However, Gregson’s forecast predicted that 2011 would be a good year for city revenue. The reason for this is the prospect of an expansion at the Salish Lodge, and a new hotel and development near the site of the new Snoqualmie Valley Hospital. These developments could increase on-going sales tax collections by expanding the sales tax base, and increase one-time sales tax revenue.

Councilman Charles Peterson noted that North Bend was also pursuing a hotel development and could beat Snoqualmie to the punch. He asked if that would discourage a developer from building a new hotel in Snoqualmie. 

Mayor Matt Larson said that he had asked that question of a hotel developer, who said a hotel was still viable. He said that a new hotel in North Bend would not impact Snoqualmie’s chances because the proposed location of a new Snoqualmie hotel was in the interstate corridor where there are enough customers for multiple hotels. 

Gregson’s forecast also contained a discussion of Initiative 1033, a referendum in the November election that could impact city revenues. 

Initiative 1033 seeks to limit the growth of city, county and state governments by not allowing general fund revenues to exceed the rate of inflation and population growth. The initiative requires that any revenue collected by the state, county, or city that is in excess of the rate of inflation and population growth be used to reduce property taxes.

“You can go down, but you can never go up,” said Gregson about the impacts of I-1033 on city revenues.

Larson and members of the council expressed concern about what the initiative may do to the city. Gregson said that it might be hard for the Snoqualmie to recover from floods or other natural disasters.