Bills impacting city finances introduced

As the sixth week of session begins, there is an increase in the number of bills related to local government finances. Some have been scheduled for committee hearings while others need to be heard by the fiscal committee deadline of Friday, February 24.

On Tuesday, February 14, the House Local Government Committee will hear the following two proposals:

• HB 1992 would allow county treasurers to retain a portion of the taxes collected on behalf of other jurisdictions to pay for their administrative costs. AWC opposed a similar proposal last year, which would have allowed counties to retain 1% of all property taxes collected.
• HB 2011 would require the Washington State Institute for Public Policy to complete a study of the comparative constitutional and statutory obligations and revenue capacity of various local government entities, including cities and counties. The study would be funded with $250,000 from the liquor revolving account.

Three other proposals have been introduced but not yet scheduled to be heard:

• HB 2006 would remove the non-supplant language from city and county criminal justice assistance account distributions and the mental health sales tax. Currently, every city receives a portion of more than $35 million per biennium in criminal justice assistance, and one city levies the mental health sales tax.
• HB 2041 would remove the non-supplant language on levy lid lifts. It would also extend the county criminal justice levy to all counties. Currently, only counties under 90,000 population may impose this levy.
• HB 2012 would eliminate the streamlined sales tax mitigation program and redistribute an equivalent amount of funding to cities and counties for indigent defense. Beginning July 1, 2017, counties would receive $23.2 million for indigent defense, and cities would get $2.3 million. The distributions would be adjusted annually by the state’s fiscal growth factor, and all funds must supplement, not supplant, existing indigent defense programs.
  While supporting additional funding for indigent defense, AWC opposes elimination of the streamlined sales tax mitigation program. The program is the result of an agreement between the state and local governments to mitigate the shift in revenue resulting from taxing sales based on destination. Under this program, 50 cities receive approximately $13 million in mitigation payments, and counties and transit agencies share the remaining $10 million.