In a close 4-3 vote, the Sumner City Council elected to increase property taxes to $1.30 per $1,000 assessed value in 2018 at a Nov. 20 Council meeting.
That’s a 12-cent increase from the $1.18 per $1,000 assessed value collected this year by the city. For the average single-family homeowner, that’s about a $7.15 change from the 2017 levy per month.
So what’s the reason behind the increase?
There are multiple, according to city officials — a big one being anticipation of a loss of $435,000 in streamlined sales tax revenues from the state Legislature in 2019 after the Washington Supreme Court ruled in the McCleary decision that the state was not adequately funding its education system.
A Mainstreet Fairness Act was created for cities in response to that loss of revenue, but Sumner is one of three cities, including Auburn and Kent, that does not make up its loss of Streamlined Sales Tax Mitigation through the Mainstreet Fairness Act.
Other smaller cities are also taking a hit with the loss of streamlined sales tax. Milton is struggling with the rising cost of living and also increased property taxes, to $1.57 per $1,000 assessed value, which is still within the legal limit, said Betty Garrison, Milton’s finance director.
Other state-shared revenues could also be at risk in Sumner’s next biennial budget as the Legislature revisits the McCleary decision as a result of a 2017 Supreme Court ruling that lawmakers must do more to meet the long-running education decision.
“We really don’t know how that’s going to impact our state-shared revenues,” Kassandra Raymond, Sumner’s chief financial officer, said at the Council meeting. “There’s a variety of state-shared revenues that we currently receive that could well be on the chopping block.”
It could be that more costs will be shifted to cities, further straining the city’s ability to provide services, added communications director Carmen Palmer.
Because of the unknowns, Sumner City Council member Earle Stuard, who led the way on the proposed property tax, stressed the importance of looking ahead when it comes to budgeting for the future.
“I’ve learned it’s very, very important to be strategic and think forward,” Stuard said. “(The property tax) gives the city a good chunk of money to look at building something for the future.”
The property tax is the second largest and most stable revenue source in the city’s general fund, and is the major source of funding for police, parks, streets, sidewalks, events and administrative services. At the new 2018 property tax rate, the city receives only 10 percent of property taxes collected. The Sumner School District receives 44 percent.
At the Nov. 20 meeting, Council members Steve Allsop, Curt Brown and Patrick Reed voted against the new property tax levy.
“Currently we are operating with a sizable surplus in our tax revenues, and although the surplus is considered one-time and unsustained ... in my opinion that surplus accounts for no immediate threats in the biennium cycle,” Reed said.
Brown said other taxes, including taxes from Sound Transit 3, have been weighing on residents and that he would support a property tax levy of $1.25 per $1,000 assessed value, but not $1.30.
“We’re a progressive small city, they say, and I think that’s important,” he said. “But I don’t want to be an aggressive small city with taxes. We need to be fiscally responsible, and we can do that at $1.25.”
Along with Stuard, Council members Kathy Hayden, Cindi Hochstatter and Mike LeMaster voted to approve the new property tax levy.
“For me, it’s not about a beefy budget, it’s about creating opportunity for our citizens for good things like moving our library so kids can actually walk to it or ride a bike,” Hayden said. “For me, this $1.30 is about being prepared, creating opportunity for our citizens and keeping Sumner the beautiful place everyone wants to live in.”
Sumner Mayor Dave Enslow said he would have liked to have seen a more detailed list of what the revenues will go toward.
“I have not seen any list of the things that we would do if we had more money,” Enslow said. “I’m guessing we probably have about enough.”
Residents will be seeing the change on their property tax bill starting in 2018. Puyallup also raised property taxes by 1 percent.