Executive Dow Constantine and King County had a plan. This plan proposed the King County Council enact a 0.1 percent sales tax increase to fund a $400 million investment in permanent housing for the homeless. He and other advocates hoped the plan would transform the fight against homelessness. But one by one, local governments are opting out of this plan by voting to gain control of this tax and use it for their affordable housing projects.
During a special meeting on October 5, 2020, in a 6-1 vote, the Snoqualmie City Council adopted Resolution 1557, implementing an additional sales and use tax of one-tenth of one percent. The tax increase is designated for current or future affordable housing or mental or behavioral health initiatives. “Snoqualmie 2032,” the city’s comprehensive plan, sets targets for affordable housing but anticipates an unmet need of 1,497 affordable housing units by 2032.
“I am very pleased the City Council acted quickly to assure the revenue from this new tax would stay in Snoqualmie to provide more affordable housing options for our residents and the workers in our community,” stated Mayor Matt Larson. He noted that he believed the city residents would be “appalled” if they knew the city could keep the tax revenue local and didn’t.
Several other Eastside cities – including Covington, Issaquah, and Renton – have already acted. North Bend has called a special City Council Meeting for Monday, October 12, to consider doing the same.
It is estimated the cities could collect approximately between $250,000 and 300,000 annually from this one-tenth of a percent sales and use tax increase, which would be used for citywide affordable housing programs and grants and other related services support low-income North Bend and Snoqualmie residents.
While both council meetings feel somewhat rushed, the Snoqualmie Council meeting and potential North Bend City Council action were necessitated by a King County missed deadline, which created a small window – consisting of just a few days – for cities to keep this sales tax revenue local.
Earlier this year, the Washington State Legislature passed HB 1590, which allows counties to adopt the affordable housing sales tax using councilmanic authority – with a deadline of September 30.
While King County Executive Dow Constantine included this sales tax revenue in the county’s 2021 budget, the King County Council did not meet that September 30 deadline to adopt the sales tax formally.
In the interim, state law says if the September 30 county deadline is missed, cities may adopt the one-tenth of one percent tax increase and use the revenue to support their affordable housing initiatives and related services.
The proposed North Bend resolution to minimally increase the sales and use tax will also contain a clause to bring it back to Council for reconsideration if King County Council does not impose the increase. The City of Snoqualmie did not include such a clause in their resolution.
The King County Council will vote on the same sales and use tax for affordable housing on October 13. If cities pass this measure first, before any King County Council action, the county must provide a credit to those cities’ residents for the full amount of the city tax. This provides the City Councils control over where and how the money will be spent: on projects located in the Valley, or through partnering with other cities and/or housing providers in the upper Snoqualmie Valley.