Island County considers sales tax increase
— Created January 12, 2022 by Kathy Reed
By Kathy Reed
Island County commissioners will hold a public hearing Tuesday, Jan. 18 at 10 a.m. to discuss a one-tenth of one percent increase in the county’s sales tax to support affordable housing.
Commissioner Janet St. Clair held a town hall meeting via Zoom last Thursday to help increase public awareness and to discuss how the money generated from the proposed sales tax increase could be used.
“Let’s talk a little bit about housing needs in Island County,” she said to those attending the virtual meeting. “This is something that has been an issue before the board for a while. It is a pressing need, not just in Island County, but across our nation. It impacts seniors and their ability to age in place, families, workforce, employers as they try to find folks to work here and high-need individuals, such as those in need of supportive housing.”
According to Island County Human Services, there are 1,897 households in the county that are severely rent-burdened, meaning 50-percent or more of their income goes towards paying for housing and utilities (according to 2019 Census data).
St. Clair said the ongoing affordable housing challenge has only worsened during the pandemic, with the Human Services Department seeing an exponential increase in calls for housing and mortgage assistance. She said while there are resources for housing development, such as grants, housing trust funds and document recording fees available locally, those sources are inadequate.
“What we’ve found is those alone have not necessarily proven to meet the need of our housing shortage in Island County,” she said. “The board, in recognition of this and what a challenging issue it has been, dedicated about $9.3 million of our American Rescue Plan dollars to this issue. In addition, last year the Washington State Legislature passed House Bill 1590, which offers yet another solution.”
The legislature passed House Bill 1590 in early 2020, which took effect in June of that year. An amendment to the original RCW now allows the tax to be imposed by a “councilmanic authority.” In other words, it can be enacted without a vote of the people by a city or county. Should commissioners eventually approve the measure, the sales tax in Island County would increase from 8.7 percent to 8.8 percent. In Oak Harbor, which has a sales tax of 8.9 percent, the sales tax would increase to 9 percent.
It is estimated the increase in the sales tax would generate about $1.1 million per year. Under the law, 60 percent of the funds must be used for constructing affordable housing. The state legislature also approved House Bill 1070 in April 2021, which allows for the acquisition of property with those funds. Those eligible to live in designated affordable housing would have to have earnings at 60 percent of the Area Median Income (AMI) or below.
If commissioners do approve the increase, the earliest it could take effect would be July 1. Also under the terms of HB 1590, cities can adopt the increase on their own prior to a county taking action, which would include Langley, Coupeville and Oak Harbor. Should Island County commissioners not pass the increase, those jurisdictions would then be able to do so on their own.
Langley and Coupeville have relinquished that option, deferring to Island County commissioners to enact the tax increase. Oak Harbor City Council members discussed the issue at last week’s regular council meeting, with several of them voicing concern over taking the decision out of the hands of the people.
“I really have a problem with dipping into people’s pockets for something we don’t have a plan on and without their vote,” said Councilman Dan Evans. “When you read the RCW for this specific situation, the first paragraph states that you can do this with a vote. Well, now they’ve made an amendment to it so the second paragraph says, ‘or you can skip the vote.’ That doesn’t sit right with me or the people that voted for me, so I’m encouraging us to not send a letter championing a hope and dream tax.”
“By the city sending a letter of support of this without having public comment or public hearing or input from our constituents and the people in this city, I almost feel like we’re speaking out of turn,” said Councilman Jim Woessner. “We’re basically saying the citizens of our community are in favor of this and I don’t know that we have enough information to say that…I guess I just have a problem endorsing this on behalf of the people of our community without having that public hearing or public comment period.”
“What we’re talking about is 10 cents out of every $100 spent, to put it in perspective,” said Councilwoman Tara Hizon, adding she believes the people have spoken. “The number one public comment we receive here at meetings is, people are concerned about affordable housing, they are concerned about the homeless population and they want their local government to do something to help…I think [Island County Human Services] would be very good stewards of any funding they receive. They have the manpower and the infrastructure and the systems to do it.”
“On the campaign trail I’m not sure if affordable housing or ‘Quit raising our taxes’ came up more,” said newly elected Councilman Shane Hoffmire. “Something needs [to be] done with both.”
After lengthy discussion, council members agreed to allow Mayor Bob Severns send a letter to Island County commissioners outlining their concerns, specifically in terms of the matter of public comment.
Public involvement in the process, said Commissioner St. Clair, is exactly what she wants.
“This is an issue of extraordinary importance to us,” she said. “I think public input and public outreach is important…so I encourage you, if you want to have official comments on this issue, please send them to email@example.com or attend the public hearing coming up on Jan. 18 and be heard and have your comments recorded there.”