County extends hearing on potential sales tax increase
— Created January 26, 2022 by Kathy Reed
By Kathy Reed
Island County commissioners have continued a public hearing on a proposed sales tax increase, pushing a decision on the matter to March 22.
A public hearing was held last week on the proposal, which would increase Island County’s sales tax by one-tenth of one percent, which translates to $10 for every $100 of taxable sales. Money from the increase would be earmarked for affordable housing.
The Washington state legislature approved House Bill 1590 in mid 2020, giving cities and counties the option to impose a sales tax increase, to be used for affordable housing or behavioral health, without a vote of the people. The cities of Langley, Oak Harbor and the town of Coupeville have given Island County commissioners the option to decide on the matter.
A total of 16 people spoke at the public hearing on Jan. 18, appearing before commissioners both in person and online. Those who spoke were fairly evenly divided on the matter. Those opposed said it is wrong for commissioners to impose a sales tax increase without putting it on the ballot, while those in favor said the need for affordable workforce housing is critical.
Island County Human Services Director, Lynda Austin, presented an overview to the commissioners.
“This bill empowers our local officials to help address the housing crisis much more expeditiously and treat the crisis with the urgency it deserves,” she said. “The current estimated revenue increase is around $1,100,000 annually. These new funds would bring a significant stream of funding year after year, allowing Island County to support affordable housing projects, with a goal of creating a pipeline of projects, adding units annually.”
The law stipulates 60 percent of the funds collected could be used for construction of new affordable housing and for the purchase of land or buildings to be used for or converted to affordable housing. Forty percent of the money could be used for support services for new housing.
While there is a general plan in place for how the new funds could be used in Island County, commissioners asked Austin to present a more detailed plan on March 22. Commissioners also added further stipulations to the proposed resolution, which Commissioner Melanie Bacon summarized in her weekly email.
“The commissioners revised the resolution to restrict the use of the tax for the creation and support of new affordable housing units and void the tax in 10 years if affordable housing isn’t being built with the funds,” Bacon wrote. “The commissioners also want to ensure we have a plan to guide the use of these funds, so we continued the public hearing until the end of March so a draft plan can be developed prior to the Board’s vote.”
If commissioners decide to approve the sales tax increase, it would take effect July 1. Skagit, Snohomish, Whatcom, Jefferson and King Counties, have already approved the increase. Bacon has indicated she will likely support the resolution.
“If I feel comfortable with the plan, I intend to vote in favor of enacting this tax,” Bacon said in her email. “By the way, all our surrounding counties have enacted this tax, meaning if you buy something in Snohomish or Whatcom you are helping pay for affordable housing in those communities.”
The proposal would increase Island County’s sales tax from 8.7 percent to 8.8 percent. The city of Oak Harbor, which passed a two-tenths of one percent sales tax increase for transportation last year, would see its sales tax increase from 8.9 percent to nine percent.
Those interested may watch the public hearing at islandcountywa.gov and following the links to the board of county commissioners.