AWC’s fiscal flexibility bill is scheduled for public hearing and executive session during the first week of the 2021 legislative session. Fiscal flexibility is one of AWC’s priorities for 2021. Cities are asking for this limited flexibility to help balance their budgets while responding to the challenges created by the pandemic.

HB 1069, sponsored by Rep. Gerry Pollet (D–Seattle) and Rep. Davina Duerr (D-Bothell), provides local governments with increased flexibility of existing revenue sources to better provide essential services for communities.

The bill proposes flexibility for the use of revenues from criminal justice sales tax, lodging tax, and real estate excise tax through December 31, 2023.

• Criminal justice sales tax: expands revenue use to include local government programs that reduce number of residents interacting with criminal justice system, including programs that address homelessness and/or or behavioral health
• Lodging tax: expands revenue use to include housing and rental assistance, such as providing housing for residents requiring shelter, supportive housing, or isolation and quarantine due to contagious illness
• Real estate excise tax: expands revenue use to include operation, maintenance and service support for capital projects that provide affordable housing and shelter units

Further, the bill grants levy and utility lien flexibility:

• Levy flexibility: grants local governments flexibility to use funds raised by levy to supplant funds used for operating expenditures for years 2015, 2016, 2017, 2018, 2020, 2021, and 2022
• Utility lien flexibility: allows cities the flexibility impose a lien on a property up to three months after the expiration of the emergency declaration, or if ratepayer fails to abide by agreed upon payment plan

These proposals will provide cities greater flexibility to use funds from existing revenue sources to manage the impacts of the current economic downturn facing their communities.

We are aware of opposition to the lodging tax flexibility from the hospitality industry. They maintain that the funds should be exclusively used for tourism promotion. We believe that because it only creates an option that a city can choose the best use of those funds—either housing assistance or tourism promotion—that meets their community needs during this challenging time. Additionally, we understand that the Washington Association of Sheriffs and Police Chiefs (WASPC) will oppose any flexibility or changes to the criminal justice sales tax funds. However, the flexibility that is proposed is quite limited as still maintains the focus on public safety.

AWC encourages cities to let your local legislators know that you support these local flexibility options.

Dates to remember

HB 1069 is scheduled for public hearing in the House Local Government Committee at 10 am on January 13 and scheduled for executive session in the Committee at 8 am on January 15.