Despite a slow start this session, HB 1362 received widespread local government support in the House Finance Committee hearing last week.

AWC joined seven city elected leaders in providing testimony, together emphasizing the dramatic impacts of a multi-decade structural budget deficit driven by the 1% cap on property taxes. You can watch the testimony from the hearing. HB 1362 makes a modest change to the 1% cap by revising it based on inflation and population growth not to exceed 3%.

Mayor Knauss of Chewelah described the challenges faced by that city to afford to provide basic city services. Chewelah, for example, relies on property tax revenue to support public safety, cemeteries, public record requests, building and planning costs, parks, and the airport, but cannot meet basic service demands because of fiscal constraints.

Mayor Franklin of Everett echoed Mayor Knauss’s comments, highlighting the importance of HB 1362 in balancing the local and state tax structure and the profound need for revenues to keep pace with expenditures.

Mayor Johnson of Pullman described the financial impact of the current property tax cap on the city. Pullman also relies on the revenue to support basic services and faces significant challenges in securing the infrastructure to support those services.

Mayor Pauly of Issaquah highlighted the arbitrary nature of the current cap. Recently she asked the city council to raise the utility tax to account for the prolonged structural deficit caused by the one percent cap. Unsurprisingly, the utility tax increase was not a popular proposal. To close the structural gap, the city was forced to reduce staff and services, while adding 15,000 to 20,000 additional residents within the city’s jurisdiction.

Yakima City Councilmember Funk advocated for the revision of the one percent cap, not only to address the widespread structural deficit but also the impact of this deficit on under-served, disadvantaged communities. In the last three years, the city has cut the budget significantly and was forced to make a tradeoff: provide basic services or replace outdated infrastructure and maintain public safety vehicles. Councilmember Funk reported that many of the city’s firetrucks have travelled well over 300,000 miles, dramatically impacting the efficiency and efficacy of the city’s public safety services.

Bothell City Councilmember Thompson, a colleague of the bill’s original sponsor, Rep. Davina Duerr, emphasized previous panelists’ sentiments and described Bothell’s decision to place a supplemental levy on the ballot. Fortunately, the levy passed by will of the voters. However, it is a temporary fix for a chronic, structural problem.

Olympia City Councilmember Jim Cooper closed out testimony sharing his compelling experience in working to balance the city’s budget over the last 10 years and the challenges associated with putting measures before voters.

In addition to cities, county commissioner and fire and library district representatives also testified in strong support.

AWC is grateful for the support of our locally elected leaders. We urge cities to continue to contact their legislators in support of HB 1362.