Voters said no to higher property taxes. Will they increase sales tax to fund police?
Gig Harbor voters will see a sales tax measure on their Aug. 6 ballots to provide funding for public safety and law enforcement services.
The tax will go into effect in 2025 if approved, according to the local voters’ pamphlet. Sales and use tax propositions require a simple majority of votes to pass, per state law.
The proposition would increase the current sales tax rate by 0.1%, from 8.9% to 9.0%, according to the city of Gig Harbor’s website. That’s “1/10 of a penny” according to the statement in favor of the measure in the voters’ pamphlet, or 10 cents more on every $100 purchase. Gig Harbor City Administrator Katrina Knutson said that groceries aren’t taxable.
The full name is Proposition No. 1 - Additional Sales and Use Tax for Police and Public Safety.
What will the tax pay for?
Revenue from the sales tax increase will support public safety services under the Gig Harbor Police Department, with the majority going toward staffing.
Under state law, a city that imposes a public safety sales tax must devote at least a third of the revenue generated to criminal justice, fire protection or both. The city of Gig Harbor has chosen to dedicate as much revenue from the sales tax as possible to the police department, according to a Facebook post from the Gig Harbor Police Department. The city is required to share 15% of the revenue with Pierce County under state law.
The Gig Harbor Police Department faces staffing shortages that have limited officers’ ability to provide marine and bike patrol services and enforce traffic laws, according to Police Chief Kelly Busey.
According to the 2023 Gig Harbor Police crime report, crime rates went down from 2022, when there was a spike of 1,129 reported crimes. 2023 saw 765 reported crimes, a number closer to the 831 to 947 range the department has seen each year from 2013 to 2021.
Despite this statistic, Busey said officers are receiving more and more calls, including ones that are complicated and time-consuming. That includes calls related to mental health or drug issues, calls that require search warrants, and serious crimes like theft and assault. That leaves officers less time for duties like enforcing traffic laws, riding their bicycles throughout the city and manning their 21-foot patrol boat on the water, according to Busey.
Traffic enforcement, which all patrol officers conduct as part of their routine, is particularly understaffed, according to Busey. The department can’t staff every shift. When asked where and when officers conduct their patrols, Busey wrote in an email that all city streets are subject to enforcement and police also use portable speed signs that don’t issue tickets to identify trouble spots.
Knutson said the number one complaint in her office and the mayor’s office is related to speeding and people not following traffic signals.
Knutson said the city wants to get the police department up to 26 commissioned officers. The city currently budgets enough money to support 25. Currently, 23 positions are filled and the city intends to fill the last two as the budget allows. They’re waiting “to take a broad view of the city’s resources after Aug. 6,” according to Busey.
Revenue generated from the sales tax could also help pay for updated equipment. Busey said that the department’s radios are reaching the end of their service life and they also need to replace several vehicles every year.
Police vehicles tend to be more expensive and difficult to obtain because of the special technology they are equipped with, and they also get damaged when people hit them or when officers are forced to make riskier maneuvers in the course of their work, Knutson said..
According to Busey, the department lost three patrol cars in 2022. One vehicle costs roughly $75,000, he said.
The police department takes up a big chunk of the city’s general fund. According to the city’s 2023-24 biennial budget, the police department received more money overall from the $41.5 million budget than any other department, at about $11.5 million.
Funds from the sales tax measure could also be used to help pay for the salary of the city’s Housing, Health, and Human Services Program Manager hired last year, when that manager is assisting police on calls, according to Knutson. That could look like helping police respond to calls related to mental health, drug addiction or homelessness issues.
Currently, half of the program manager’s salary comes from the state’s opioid settlement funds, which the city will receive for the next 16 years, she said.
The proposition comes after Gig Harbor voters rejected a property tax increase in April. The failed levy lid lift would have increased the property tax rate by 40 cents, adding $300 a year to the taxes an owner would pay on a $750,000 home. More than 69 percent of residents who voted in the special election were against the measure.
Knutson said she and Busey went around the city talking to residents and heard many say they wanted the city to consider ways to generate revenue other than a property tax.
“A lot of the residents indicated that they thought the citizens of the city were paying for a disproportionate share of services,” she said.
Both Gig Harbor residents and visitors who come to shop, visit the parks and do other activities in the city would pay the new sales tax, if it passes. That’s important because data from recent years show that those who live outside of the city limits make up 89% of the arrests officers are making in Gig Harbor and are the majority of those receiving services from the city’s police and courts and using the roads, Knutson said.
According to the city’s 2023 Annual Report, the daytime population in Gig Harbor is nearly double what it is at night. Data from the 2013-2017 American Community Survey estimated the resident population in Gig Harbor to be 8,651 and the daytime population to be 16,671, a 93% increase.
Will this tax be enough to address the city’s budget deficit?
Both the sales tax proposal and the failed property tax measure are options the Gig Harbor City Council considered to address a shortfall in the city’s general fund. The general fund provides money for law enforcement, maintaining streets and operating buildings and parks, according to the city website.
The reasons for the deficit include the declining percentage of tax revenue that goes to the city, Knutson said. In other words, the city is getting less out of every tax dollar a resident pays than they did previously.
At the current rate, the city of Gig Harbor receives 8.3% of every property tax dollar a resident pays, according to a slide deck that Busey shared with The News Tribune. 27.3% goes to the state, 26.1% goes to the fire district, 22.4% goes to local schools, 8.8% goes to the county and 7.1% goes to pay for other services including libraries, the Port of Tacoma and flood control.
The city of Gig Harbor currently receives 1% of every sales tax dollar, according to the slide deck. 6.5% goes to the state and the remaining amount is divided up for other uses including public transportation, behavioral health and therapeutic courts and other public services.
A drop in growth and development in Gig Harbor also means the city is getting less money from permits and development costs, which Knutson said the city heavily relied on in the past.
“We’re going to need to sustain our staff on a different way of funding them,” Knutson said.
Meanwhile, the city and its costs are growing, according to a Jan. 5 memo from finance director Dave Rodenbach to the Gig Harbor mayor and city council. The number of Gig Harbor residents has increased 65% since 2013 from 7,913 to 13,060 residents.
Based on data from the 2020 U.S. Census, Gig Harbor came in second in a list of the top 10 Puget Sound cities by percent growth ranked by the Puget Sound Regional Council, which develops policies related to growth and development in King, Kitsap, Pierce and Snohomish counties.
In response to that growth, the city’s general fund workforce expanded 50% from 48 budgeted full-time employees in 2013 to 72 as of the Jan. 5 memo. The city has also significantly increased miles of roadway and public trails and expanded parkland and open space in the last twenty years, the finance director’s memo said.
The city has already made cuts to address the deficit without taxpayer help. According to the slide deck from Busey, the city saved $100,000 a year by eliminating its federal lobbyist and saved $1.5 million in the 2023-2024 biennium by freezing nine general fund positions. It also deferred several priorities such as the expansion of the Cushman Trail and the city’s Urban Forestry Management Plan and made several internal processes, such as the submission and review of permits, more efficient.
The city isn’t anticipating a budget deficit until 2026, and is taking preventative measures to ensure that their services don’t drop in later years, according to Knutson.
Because the city’s finance director is on leave, the city doesn’t have updated finance projections using numbers from June yet, Knutson said. She was hesitant to share exact numbers but said the city could face a $2 to $3 million deficit each year starting in 2026.
The upper end of that range, $3 million, comes from factoring in a roughly $1 million pavement maintenance program that the city has only run for two out of the last 10 years because of lack of funding, though many of the city’s roads need that maintenance, Knutson said.
The public safety sales tax would generate about $1.2 million annually, according to the finance director’s estimate. The city doesn’t have plans to go back out for a proposed property tax increase. Combined with the city’s efforts to trim the budget and “a modest business-and-occupation tax” that the city council will be discussing in early September, the city wouldn’t need to ask for other tax increases for the next six to eight years, according to Knutson.
According to Busey, the sales tax increase would be permanent if it passes.
The resolution to put the sales tax increase on the Aug. 6 ballot was unanimously approved by the city council at the March 25 meeting.
In the local voters’ pamphlet, the statement submitted in favor of the sales tax increase described an increased demand for public safety and law enforcement services in Gig Harbor. There was no statement submitted against the measure.
