Bellevue could lose up to $1 million following state budget changes

The city lost an estimated $655,000 to $1 million in revenue when the Legislature adopted the state budget last week. But it could have been worse; a lot worse.

The city lost an estimated $655,000 to $1 million in revenue when the Legislature adopted the state budget last week. But it could have been worse; a lot worse.

As the governor and lawmakers in Olympia looked for ways to cut the state’s large budget deficit this year, sharing less tax revenue with cities was a recurring option. A collection of legislative proposals had the potential to eliminate $11 to $15 million from Bellevue’s annual revenue.

Bellevue will lose $651,000 over the second half of this year and the first half of 2013 because the Legislature routed a fiscal year’s worth of liquor excise taxes from local governments to the state budget. Exactly how the lost revenue will impact Bellevue’s budget has not yet been determined.

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However, many proposals calling for the state to take more local revenue were defeated or resolved in other ways.

Administration of state B&O tax will stay local. If the state had taken over administration the local share of the business and occupation taxes, it could have cost Bellevue $1.6 to $6 million a year.

Cell phone sales tax remains: A Thurston County Superior Court vacated a ruling that had exempted cell phones from sales tax, so the city is not liable for a $5.6 million refund, and will continue to collect $1.3 million in annual sales tax revenue.

The annexation sales tax credit will still available. Bellevue is still eligible to claim the credit, which would provide up to $1.2 million annually to help cover costs associated with providing services to South Bellevue areas that have petitioned to be annexed.