Bellevue council votes to increase sales tax to support affordable housing

The vote from Bellevue and other cities takes revenue away from a county-wide sales tax meant to address chronic homelessness

Bellevue City Council has voted to increase sales tax by one-tenth of 1%, the revenues intended for affordable housing projects and services.

The sales tax increase is a result of House Bill 1590, which allowed counties to impose a one-tenth of 1 cent sales tax with at least 60% of revenues needing to go toward affordable housing or homelessness-related services.

Because King County Council did not vote for the sales tax increase by Sept. 30, a state-set deadline, the county lost exclusive rights to the tax increase and cities were able to use a council vote to collect the increase in sales tax for themselves. As a result, multiple cities fast-tracked votes to increase their sales tax and keep control of the revenues, before King County could vote to collect the revenues for itself.

Of the cities to enact their own sales tax increase, and therefore control 100% of the revenues for affordable housing generated within city limits, Bellevue has the largest tax revenue share so far with an estimated $8.9 million a year. Other cities include Renton, Issaquah, Kent, Covington and Snoqualmie.

Like other cities, Bellevue officials argued the vote gives the city more control on how the tax revenue is spent.

King County Executive Dow Constantine’s proposed budget includes the regional sales tax increase as a funding source to purchase housing for the chronically homeless throughout the county. Now the county will have less money for that plan at the discretion of Bellevue and other cities who are controlling their shares of the tax.

Bellevue has shared it’s affordable housing plans involve providing for a range of income housing like families, seniors on fixed incomes, and first time home buyers. The city is one of the least affordable in the Seattle area.

The new tax takes effect at the beginning of 2021.