Kent City Council took steps in its finance committee Wednesday night toward raising the city income tax for the first time since 1984.

When the city votes in May, the ballot will include a .25 percent increase for the income tax, raising it from 2 percent to 2.25 percent for five years.

Ward 6 Councilwoman Tracy Wallach, who moved to place the item on the ballot, said the increase is a precautionary measure suggested by the Blue Ribbon Panel. The panel was commissioned in 2006 after City Council foresaw a budget shortfall following eight to 10 years of financial troubles.

“They looked at the city’s financial records and came up with ways that the city could become financially healthy,” Wallach said. One of the panel’s first recommendations was that council “cut all kinds of fat from the city.” Once the budget was trimmed, the panel said that raising taxes would help.

Wallach said a “sunset” amendment to her motion would end the tax increase after five years.

“We need to generate revenue quickly,” she said. “Hopefully all the revenue from all the development downtown will pick up the slack and the tax increase won’t be needed.”

Ward 5 Councilwoman Heidi Shaffer said Kent has seen a trend over the past 15 years where population has grown by 15 percent while the city lost 15 percent of jobs. That caused a structural deficit concern, she said.

“And it looks like this year we will finish in a budget deficit,” she said.

Shaffer said the tax increase will help the city maintain the level of services provided, which Kent residents have said they don’t want cut. Safety is the first aim, she said.

“It’s not like we’re trying to make a profit. We’re not,” she said. “We (City Council) haven’t had a raise in 26 years.”

Residents at the meeting last night spoke out against the tax increase because they said it imposed a high burden on citizens when paired with a tax credit decrease in the works.

The city currently gives Kent residents who work out of town and pay income taxes to another city a 2 percent tax credit. That means if they pay 2 percent or more to another city, Kent doesn’t require them to pay income taxes. If they pay less to another city, they must pay Kent the difference between the two amounts.

Under the new proposal – which will have its third and final discussion Sept. 17 – city council would drop the tax credit to 1.5 percent.

The issue only came up at the meeting because of its relationship with the tax increase issue, city manager Dave Ruller said.

The credit decrease will be decided by city council, not by the voters. This upset some residents.

“They called it taxation without representation, but that’s not right because they voted for us,” Wallach said. “We need to make people understand why we need this at this time.”

Because the tax increase issue will be up to the voters, Wallach doesn’t expect the public to become as upset about it as they are about a proposed tax credit rollback.

When asking residents of her ward, Wallach said people have been accepting of the idea.

“Once you lay out the whole plan at once, people are pretty OK with it because it’s not that much,” she said.

Contact metro editor Theresa Bruskin at [email protected].