Status quo session means modest budget and financial impacts for cities

The 2024 session was notable for being normal…it has been a few years since we have had a more-or-less normal short session with a typical supplemental budget process. While the adopted supplemental budgets did have some notable wins for cities—like funding the city share of the Basic Law Enforcement Academy (BLEA) tuition—most of the investments and changes were modest (SB 5950, SB 5949, HB 2134). You can do a deep dive into the budgets’ areas of interest to cities in our budget matrix.

Cities asked for help with more flexibility in local funding options. One of our priorities this year was revising the outdated 1% property tax cap to tie it to inflation, up to 3%. SB 5770, sponsored by Sen. Jamie Pedersen (D–Seattle), was on track to pass the Senate in early February when it was suddenly derailed by campaign-year politics. The Governor and House leadership—concerned about implications for the November elections and the initiatives targeting the Climate Commitment Act (I-2117) and the capital gains tax (I-2109)—pulled the plug on the bill just before it was expected to be brought up for a vote. SB 5770 would have given local governments the ability to raise the local property tax cap tied to inflation, not to exceed 3%. This was a local option and not an automatic tax increase. As we have continued to point out, expenses increase by well over 1% each year and city officials can’t keep up with funding the services communities need. We wanted more community-based decision-making about taxes, and SB 5770 would have provided that. A huge thank you to Sen. Pedersen for his work to push this proposal forward.

Another unfortunately unsuccessful attempt to create additional local revenue options was our effort to enhance the existing public safety sales tax by making it councilmanic and allowing cities to go up to .03% from the current .01% voter-approved authority. Unfortunately, these priority bills, HB 2211 and companion SB 6076, also ran into political concerns with tax votes and some legislators who were wary of more funding for public safety.

One win we can notch this year is HB 2044 which removes the non-supplant restrictions on property tax levy lid lifts for jurisdictions in King County. This restriction had previously been removed for all other taxing districts in the state but remained for those in King County. We appreciate King County for leading this effort and Rep. Davina Duerr (D-Bothell) for sponsoring the bill.

It is hard to say what the 2025 Legislature will be willing to consider when it comes to local tax authority. With 2025 being a full budget-writing year, we expect more conversations about funding to dominate the session. And a lot of the budget decisions will hinge on the fate of the initiatives to repeal the Climate Commitment Act and capital gains tax. If those two laws are repealed, there will be significant impacts on the state’s budgets, which could impact funding for city priorities.