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.

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.