Affordable housing kerfuffle between Tacoma, Pierce County appears to be resolved

The city of Tacoma appears to have mended fences with Pierce County over a controversy involving tax revenue being made available to address the affordable housing crisis.

The City Council this week took action to redo an ordinance that county officials complained would cost their government as much as $10 million in affordable housing funds.

“We’re just giving ourselves an opportunity to maximize the amount the county can collect which helps us all in this affordable housing crisis,” Tacoma’s Mayor Victoria Woodards said Tuesday.

County Council member Marty Campbell said he was grateful that city decided to play ball.

“I think we had a few stumbles along the way, but I’m glad to see we are leveling out. I wanted to send thanks to the City of Tacoma for working with us,” Campbell said at Tuesday’s County Council meeting. “I know that they’ve stepped up and looked at the needs of the entire county.”

At issue is a state law passed in April that allows cities and counties to keep a portion of state sales-and-use tax revenues to build affordable housing for 20 years. Qualifying local jurisdictions can keep up to .0146 percent of the state’s 6.5 percent sales tax collected within their boundaries for that purpose.

The rate of collection differs depending on whether a jurisdiction already collects taxes for affordable housing, mental health treatments or chemical dependency. The city of Tacoma is the sole jurisdiction in the county to collect such a tax, allowing the city to keep the maximum percentage of the sales tax for affordable housing.

Counties and cities have to each pass legislation to opt into the program. Earlier this month, the Tacoma City Council approved an ordinance unanimously to do so, while the County Council failed to do the same on an emergency vote.

County officials said they were going to lose out on $10 million in revenue over the 20-year period because the city’s ordinance passed first. That precluded the county from collecting at the highest rate available, some county officials argued, although there were questions and concerns on both sides about whether that was true.

The Department of Revenue since has concluded that county and city cooperation is vital to both receiving the most possible funding.

If the city waits for the county to pass the bill first, both could qualify to collect the revenue at the highest rate, spokesperson Anna Gill said.

On Tuesday, the City Council pushed back the date it would begin collecting the tax until after the county’s collection date.

Some City Council members were less than thrilled to have to wait to start collecting funds. Tacoma’s Council member Robert Thoms said the city doesn’t have time to wait for other levels of government “to figure out if they want to solve problems.”

“I want to continue to pressure those governments around us to get with the program as it relates to affordable housing and homelessness and some of the others things that we’ve been addressing in the city of Tacoma,” Thoms said.

The Pierce County Council brought its law opting into the program back for a vote on Tuesday, and it passed 5-1. Council member Connie Ladenburg was absent, and member Jim McCune voted against the law because he wanted to know more about how the funding would be spent.

“We will be working together to decide what’s the smartest decision for Pierce County community,” Councilmember Derek Young said Tuesday on the dais.

The municipalities will start collecting the revenue in October.

The Department of Revenue is trying to get clarification on calculations for the jurisdictions, Gill told The News Tribune. The agency will offer counsel to local jurisdictions on the tax collection in the coming weeks.

Josephine Peterson covers Pierce County and Puyallup for The News Tribune and The Puyallup Herald. She previously worked at The News Journal in Delaware as the crime reporter and interned at The Washington Post.