Association of Washington Cities advocating to raise property tax cap from 1% to 3%

There's an upcoming City Council special joint meeting with the City Councils of Shoreline and Kenmore on October 9th, 2023, at Shoreline City Hall starting at 5:45PM.

According to the meeting's published agenda (attached below), one of the discussion points under "State Legislative Priorities" is "Lifting the 1% property tax cap".

LFP Town Crier reached out to the LFP City Council for comment. So far, Councilmember Kassover has said "I  have long advocated for raising the arbitrary 1% property tax cap, as it creates structural deficits for all Washington cities. As we all know, inflation has risen at a much faster pace than 1%, increasing the costs of everything it takes to run a city.In LFP we have done as much as we can to maintain service levels within current budgets, but are now falling behind in our ability to offer competitive salaries for vacant positions in our police, planning, and public works departments. It is also becoming difficult to maintain public assets like parks and roads at the levels our citizens expect. This is a serious problem and raising property taxes by just a couple of percentage points would help, but not fully solve our dilemma."

Councilmember Goldman states: "I am supportive of the effort to lift the property tax increase limit from 1% to 3%. In order to maintain the services that the city currently provides, we need to keep pace with inflation. When inflation is greater than 1%, that means that the city is losing buying power even if it raises property tax revenue by the full 1% that is allowed. From 2018-2022, annual inflation rates were 2.4%, 1.8%, 1.2%, 4.7%, and 8.0%. So even in 2020, the year with the smallest inflation, the city still lost buying power. In 2021, inflation amounted to an effective 7% decrease in our property tax revenue. If we don't keep up with inflation, we will struggle to pay our employees a competitive wage, which will in turn make it harder to keep city departments fully staffed and to continue to provide services that are needed by LFP residents. Setting a property tax increase limit that is the lesser of 3% or the inflation rate would better allow the city to maintain services it currently provides."

Deputy Mayor and Mayoral Candidate Tom French states "We as a Council haven't discussed this issue and certainly won't be taking a position on the topic this evening. Personally, I believe that it is premature for the Council to have any conversations about this until we have a better understanding of the specific proposal from AWC.

Our Legislative Steering Committee is meeting tomorrow with our lobbyist to discuss various topics, including this one and that meeting will inform further Council discussions going forward.

The optional 1% that we are currently allowed to take results in about $33K in additional property tax revenue to the City and one can extrapolate that a 3% increase would be roughly $100k total in additional revenue contributed from over 5000 households in LFP.
Again, the optional 1% is aggregated across the City and many homeowners would be paying less than the 1% should the increase be put into effect.

The Council has not discussed or taken a position on this issue, so the above thoughts are my own."

The list was formulated by the Association of Washington Cities of which the City of LFP is a member. Here's the complete list of 2024 city legislative priorities: 

2024 City Legislative Priorities

Help recruit and retain police officers for public safety
Provide additional funding tools and resources for officer recruitment and retention to improve public safety. This includes updating the existing local option Public Safety Sales Tax to allow implementation by councilmanic authority and greater flexibility for using the funds to cover increased officer wages and related programs like behavioral health co-response teams.

Expand access to state-mandated training. In particular, continue increasing the number of classes for the Basic Law Enforcement Academy (BLEA) and expanding the new regional academies. Getting new officers on the street faster supports recruitment and retention, thus improving public safety outcomes in our communities.

Revise the arbitrary property tax cap
Revise the arbitrary 1% property tax cap that has been in place for more than 20 years. Tie the tax to inflation and population growth factors with a new cap not to exceed 3%. This allows local elected officials to adjust the local property tax rate to better serve our communities and keep up with the costs of providing basic services like police, fire, streets, and valued community amenities like parks. The current 1% cap has created a structural deficit in cities’ revenue and expenditure model, causing reliance on regressive revenues and artificially restricting the ability of property taxes to fund critical community needs.

Continue investing in infrastructure
Continue strong state investments in infrastructure funding to support operations and maintenance of traditional and non-traditional infrastructure like drinking water, wastewater, and broadband. Expand funding options that support state and local transportation needs with emphasis on preservation and maintenance to prevent expensive replacement and repairs. Improve access to Climate Commitment Act funding, including direct distributions, for city priorities that support carbon reduction and climate resiliency.

Provide behavioral health resources
Create greater access to behavioral health services to include substance use disorder treatment and dual diagnosis treatment facilities. Support continued state funding for cities to help communities establish alternative response programs like co-responder programs, diversion programs, and others that provide options beyond law enforcement to assist individuals experiencing behavioral health challenges.