2027 Budget Suggestions Now Available!

The month of July means I am busy gathering revenue forecasts from state agencies and population estimates from the Washington State Office of Financial Management (OFM), as well as reviewing new legislation that may impact city, town, and county budgets.

MRSC compiles this data for our annual publication, Budget Suggestions. The 2027 edition is now available on the MRSC website, and many readers find it a useful resource when developing their city, town, or county budgets.

Legislation That May Affect Your Budget

Each year, Budget Suggestions covers recent legislation that adds new revenues for cities, towns, and counties or expands the use of other resources. It also covers legislation that may impose new limits on revenue.

During the 2026 legislative session, HB 2442 provided new revenue sources and added flexibility to existing ones. Below are descriptions of the two new revenue sources.

Children and Family Services Sales Tax

Cities and counties can impose the new children and family services sales tax beginning January 1, 2027, for a maximum rate of 0.01%. Please note the rate is one one-hundredth of one percent and not a one-tenth of one percent (0.1%) increment like many other sales tax options. The revenue from this sales tax can be used for providing services that assist children and their families.

Cities and counties can both impose this tax: however, the county must credit its tax so that the total tax collected by both the city and county does not exceed 0.01%.

County Public Health Clinic Property Tax Levy

Counties can now impose a public health clinic levy up to $0.05 per $1,000 in assessed value. The proceeds from this levy can only be used for the operation, maintenance, and capital expenses of public health clinics. This new property tax levy is separate from the county’s regular property tax levy.

HB 2442 also amended a few existing revenue sources to add greater flexibility to their use, which are summarized below.

Levy Lid Lifts

There were two big changes to levy lid lifts. A “single-year” levy lid lift can now be for one or two consecutive years. Multi-year levy lid lifts (previously limited to six years) now have a maximum length of 10 years.

Real Estate Excise Tax (REET)

Effective July 1, 2026, HB 2442 now allows REET 2 (and by extension REET 1) to be used for the abatement of nuisance properties. 

County Rental Car Sales Tax

The car rental sales tax authorized for counties under RCW 82.14.049 was previously restricted to certain sports facilities or youth and amateur sporting activities and facilities. This sales tax can now be used for criminal justice purposes as defined in RCW 82.14.345.

Veteran’s Assistance Levy and Mental Health and Developmental Disabilities Assistance Levy

Until recently, a county was able to impose the following levies as part of its regular property tax levy:

• The veterans’ assistance property tax levy (RCW 73.08.080), and
• The mental health and developmental disabilities assistance property tax levy (RCW 71.20.110).

Counties may now impose these specific property tax levies separately from their regular property tax levy without having to reduce the regular levy. Additionally, these levies are not impacted by the $5.90 aggregate levy rate limit.

State Shared Revenue Estimates

The state shares certain revenues with cities, towns, and counties. Budget Suggestions discusses these revenues and provides projections for them.

In addition to reading about the state shared revenues in Budget Suggestions, MRSC provides individual city and county estimates for certain state shared revenues in our online Shared Revenue Estimator. These estimates are calculated using state forecasts and OFM’s April 1, 2026, population estimates.

Additional Budgeting Resources

Many other budgeting resources can be found on our website, such as budget procedures, budget calendars, financial data, checklists, and more, and the best place to start is our Budgeting webpage.

For historical data, MRSC’s Tax and Population Data webpage has population, property, and sales tax information for each city and county in Washington for the past 10 years.

As always, please reach out to me with any questions you might have. Happy budgeting!