City of Kent imposes sales tax hike to pay for affordable housing

Council approves ordinance to keep funds locally rather than part of King County plan

The Kent City Council approved a one-tenth of 1% hike in the local sales tax to raise an estimated $2.8 million per year to help pay for affordable housing and related services.

The council voted unanimously on Tuesday night, Oct. 6, to impose the new 0.1% tax in order to keep the money in Kent rather than part of King County’s plan to raise the sales tax and spread the funds countywide. The King County Council is expected to approve the tax hike Oct. 13. But sales tax revenue collected in Kent will remain in the city.

Adoption of House Bill 1590 by the Legislature last session gave local governments the authority to impose the tax (without referring it to voters) as long as the funds are spent on affordable housing and mental and behavioral health-related services. The county had until Sept. 30 to approve the sales tax increase and keep all of the revenue. King County Executive Dow Constantine recommended the tax hike as part of his 2021 budget. Because the county missed that deadline, Kent and other cities were able to adopt the tax hike themselves.

“Something is going to happen, whether we do it or the county does it,” Kent City Councilmember Bill Boyce said at a Sept. 29 workshop. “In my opinion, with how we have been treated by Dow and team, it’s not been fair. This is not a time to raise taxes, but if I had to choose with what happened in the past and to have the county do something or we control our destiny, I want to control our own destiny. I don’t trust what the county can do to us. …We have seen what can happen with that.”

City leaders remain upset with how Constantine and the county blindsided Kent when it bought the former Econo Lodge on Central Avenue last spring and turned it into a COVID-19 quarantine facility. The city of Kent sued the county over the move because the county sought no permits and didn’t inform Kent about the plan.

A minimum of 60% of the revenue from the sales tax hike must target people whose income is at or below 60 percent of the area median income and who have behavioral health disabilities, veterans, senior citizens, homeless families with children, unaccompanied homeless youth or young adults, or domestic violence survivors. The remaining funds collected must be used for the operation, delivery or evaluation of mental and behavioral health treatment programs and services or housing-related services.

Mayor Dana Ralph told the council that 100 percent of the tax revenue goes to the city with its ordinance. Under the county measure, at least 30 percent of the estimated $2.8 million sales tax revenue collected in Kent must be spent in Kent, which means the rest could go elsewhere. City staff estimated Kent would get a minimum of $840,000 from the county if the city hadn’t imposed the tax. Plus, the projects approved would be a county decision rather than the city’s chose.

“Their (King County) goal is to within the next two years to purchase up to 2,000 rooms to serve as emergency overnight shelters and convert them to permanent housing,” Ralph said. “They are looking at hotels with kitchenettes for housing and nursing homes are under consideration.”

Kent city leaders are still determining what they will spend the funds on. They might pool money with other cities through the South King Housing and Homelessness Partners to figure out the best ways to address affordable housing and mental and behavioral health services. That housing group includes the jurisdictions of Auburn, Burien, Covington, Des Moines, Federal Way, Kent, Normandy Park, Renton, Tukwila and King County.

King County Councilmember Dave Upthegrove, whose District 5 includes part of Kent, issued a news release last month in support of the countywide collection of the sales tax. He said the city of Kent has every right to adopt the sales tax to keep more money locally, but he prefers the county plan.

“In order to provide housing to the most people who are most at need, I would prefer that this be done collectively as a region,” Upthegrove said in a Tuesday email. “That being said, I expect the city and the county will work together to discuss how to best coordinate or eventually integrate our efforts.”

Upthegrove expects the county plan to make a big difference.

“We have a rare opportunity to act now on a simple, efficient plan that will do what people have been clamoring for, which is to get people off the street and into housing with services,” he said. “We think we can move 2,000 people out of doorways and city parks and into homes with mental health and addiction services on site. This will be done at a fraction of the cost of building new housing, and will save medical expenses, save criminal justice costs and literally safe lives.”

Ralph said other cities she has talked to reacted like Kent and want to control the projects and tailor them to fit their communities.

“If we adopt the ordinance, we have 100 percent say on how we spend it,” Ralph said during the workshop last week. “If it’s the county, they can dictate what happens in our community.”

Renton OKs ordinance

The Renton City Council on Monday, Oct. 5 approved a sales tax hike to pay for affordable housing similar to Kent’s ordinance.

“This is an opportunity we might not get again,” said Renton City Councilmember Ed Prince at a Sept. 28 meeting, according to the Renton Reporter. “I would rather we as a city make a determination what we’re going to do, as opposed to letting someone else determine what they’re going to do for us.”

The city councils of Issaquah, Snoqualmie and Covington also voted this week to impose the sales tax.

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