PORT TOWNSEND – The majority of the City Council members voted to raise property taxes through using banked capacity in a 4-3 vote on Tuesday night.

It’s not clear, however, how much more in taxes property owners would pay – possibly $40 or $47 in additional taxes per year for an owner of a home assessed at $300,000.

The Port Townsend City Council repealed a 2001 city ordinance that requires a nonbinding, advisory vote of the people before making use of banked capacity.

The council also gave preliminary approval of levying up to $198,000 of banked property tax capacity.

Mayor Mark Welch and council members Michelle Sandoval, George Randels and Catharine Robinson voted to repeal the ordinance and use banked capacity.

Council members Frank Benskin, Laurie Medlicott and Geoff Masci voted against repealing the ordinance and using banked capacity.

The vote on repealing the 2001 ordinance – which was approved by 70 percent of the voters – was the same as that on Monday. In order to repeal the ordinance, two readings were necessary.

Banked capacity exists when a taxing district increases taxes by a smaller amount than it is allowed.

The remaining unlevied amount is called “banked capacity,” and can be levied in the future.

The action comes after a state Supreme Court decision two weeks ago that ruled Initiative 747 unconstitutional.

Prior to I-747’s 2001 voter approval, which limited taxing districts to 1 percent annual property tax increases, the city had $168,000 of banked capacity.

With banked capacity accrued through I-747, the city has $198,000 of banked capacity.

Gov. Chris Gregoire has called a special legislative session on Thursday and is expected to reimpose a 1 percent annual increase tax cap.

The state Legislature is expected to repeal the amount of banked capacity made possible through I-747, thus limiting the amount the city can levy to $168,000.

However, if the Legislature allows taxing districts to levy banked capacity resulting from I-747, the city could levy $198,000.

The owner of a $300,000 home, if $168,000 is levied, would pay $40 in additional taxes.

If $198,000 is levied, the same property owner would pay $47 additional taxes in 2008.

City Manager David Timmons said that, with a Friday deadline to set levies for 2008, there was no time for voters to chime in on using banked capacity for next year’s budget.