2018 General Election Part 1: Local Sales Tax Edition
November 13, 2018
Category: Elections , Sales and Use Taxes
It may have been a high-profile and contentious midterm election, but there were also quite a few interesting local measures on the ballot in Washington State. So many, in fact, that I’ve had to divide them into three parts: part 1 (below) on sales taxes, part 2 on property taxes and bonds (as well as San Juan County's rather unique REET measure), and part 3 on non-funding measures, such as city and county charters and forms of government.
The vote counts are not final yet, but for most measures it’s become clear what passed and what failed. I’ll update our Local Ballot Measure Database in a few weeks once the results have been certified.
Cultural Access Program Sales Tax
Voters in Tacoma approved a 7-year, 0.1% cultural access program sales tax, becoming the first jurisdiction in the state to do so since the legislature enacted this new taxing mechanism in 2015 (see RCW 82.14.525). King County attempted a countywide cultural access program sales tax last year, which narrowly failed. The measure will generate an estimated $5 million annually for a variety of arts and cultural events. The legislature also enacted a very similar 7-year property tax option that jurisdictions can use in lieu of a sales tax (see RCW 84.52.821).
Public Safety Sales Taxes
Adams County is narrowly passing a 0.3% public safety sales tax for criminal justice and law enforcement. Quite a few counties have successfully passed this funding mechanism in recent years, although voters have also rejected a couple attempts. Assuming this result holds, Adams County would become the 13th county in the state to impose a public safety sales tax, of which 11 have imposed the maximum 0.3%. Under state statute, some of the revenue must be shared with the cities and towns within the county.
Voters in Kirkland approved a 0.1% public safety sales tax for a variety of purposes, including enhanced police services, school resource officers, after-school programs, and expanded mental health and human services programs focusing on gun safety, homelessness, domestic violence, suicide prevention, and related public safety issues. Kirkland becomes the 18th city in Washington to impose a public safety sales tax, but it’s worth noting that no city can impose a public safety sales tax if the county has already imposed its full 0.3% public safety sales tax under the same statute.
And in Snohomish County, voters have approved a 0.1% sales tax for emergency communications systems. This will provide a stable funding source for replacing and upgrading the county’s emergency radios and towers.
TBD Sales Taxes
For cities, transportation benefit district (TBD) sales taxes had mixed results. These sales taxes have become a common and generally popular way to fund transportation improvements in recent years. Sequim easily passed a 10-year renewal of the city’s existing TBD sales tax, and voters in Anacortes approved a 0.2% TBD sales tax to replace the existing $30 vehicle license fee. As city officials noted, replacing the vehicle license fee with the sales tax will shift some of the tax burden to out-of-town visitors who use the city’s roads.
Voters in Shoreline are narrowly approving a 20-year, 0.2% TBD sales tax to repay indebtedness for sidewalk and pedestrian improvements. TBD sales taxes are normally limited to 10 years, at which point they must be renewed with voter approval, but the statute (RCW 82.14.0455(2)) provides an exception if the revenues are used to repay debt. Shoreline is the first jurisdiction in the state to attempt a TBD sales tax longer than 10 years for the repayment of debt.
However, proposed TBD sales taxes are failing in Covington and in Gig Harbor (just barely).
Transit Sales Taxes
Voters in Thurston County approved a 0.4% sales tax increase for Intercity Transit to maintain and improve its services. The agency plans to use the revenues to increase bus frequency, expand service hours, add new routes, and add express service to existing high-volume bus routes. This brings the agency’s total sales tax rate to 1.2%. Most transit agencies in the state are capped at a 0.9% sales tax rate, but the legislature added an exception for Intercity Transit in the 2018 legislative session, allowing a maximum rate of 1.2%.
But in unincorporated Lewis County, voters rejected a proposed 0.2% sales tax increase for Twin Transit. The measure would have expanded the public transportation benefit area’s boundaries to cover almost the entire county. Instead, its boundaries will remain limited to the cities of Centralia and Chehalis. A portion of the money would have been used to take over the operations of Lewis Mountain Highway Transit, a nonprofit that currently provides four bus routes in eastern Lewis County but will be discontinuing operations in 2019.
I-1634: No More Local Soda Taxes, but No Impact on Sales Tax Revenues
I don’t normally get into statewide initiatives in my articles, but I thought it might be worth mentioning I-1634. As we noted in Budget Suggestions this summer, this initiative was billed as an “affordable grocery” measure but was really a “no more local soda taxes” measure funded by soft drink and energy drink companies in response to Seattle’s local soda tax.
The measure, which was approved by voters, prohibits local governments from imposing any new tax, fee, or assessment on “groceries,” including sodas. This means Seattle’s existing soda tax will be grandfathered in but that no other city may impose a soda tax.
Interestingly, these companies placed an almost identical measure on the ballot in Oregon, but voters rejected it there, meaning local governments in Oregon may still impose soda taxes if desired.
I should note that I-1634 will have zero impact on local sales tax revenues. Groceries are already exempt from Washington sales taxes under RCW 82.08.0293. However, soft drinks, bottled water, prepared foods, and dietary supplements are subject to sales tax, and I-1634 does nothing to change that.
Are there any sales tax measures that I missed? Leave a comment below or email me at email@example.com.
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