City of Kent’s fight continues with state to keep streamlined sales tax funds

City of Kent’s fight continues with state to keep streamlined sales tax funds

Other top legislative priorities include Panther Lake park, city gateway

The city of Kent’s fight goes on with the state Legislature for streamlined sales tax mitigation funds.

The City Council approved its 2020 legislative priorities on Nov. 5. Lobbyist Briahna Murray compiled the city’s state agenda after meeting with department leaders and the mayor’s office, ranking streamlined sales tax once again as the top priority.

Legislators during the 2019 session approved for Kent to continue to receive about $4 million per year through 2021 and potentially through 2023. The funds were initially set up by the state in 2008 to help compensate Kent and other cities for revenue lost when legislators changed Washington from an origin-based system for local retail sales tax to a destination-based system, which took away Kent’s tax revenue from its many distribution and wholesale warehouses.

The Legislature passed a bill in 2017 to end streamlined sales tax mitigation payments in October 2019. But state leaders changed their minds the past session after Kent officials and several legislators lobbied to keep the program.

That lobbying continues.

“There is a lack of clarity about what happens next, at the end of 2021 and 2023,” Murray said at a Oct.22 council Committee of the Whole meeting. “There is a strong desire in the Senate to phase out the program, and others are interested in a replacement program.

“We are exploring all options, and will request to extend it through 2023. We will look at a replacement program to provide funding to the city of Kent.”

The city pays Murray, vice president of Tacoma-based law firm Gordon Thomas Honeywell, $72,000 a year. The council approved hiring Murray in 2018 to replace Doug Levy, who worked 19 years representing the city in Olympia. Murray also represents Tacoma, Bellevue, Covington, SeaTac and numerous other cities and counties.

“I will spend 90 percent of my time on our top priority,” Murray said.

The council approved higher business and occupation taxes last year as part of its 2019-2020 budget. Mayor Dana Ralph proposed the increases to help the city make up for expected loss revenue of the streamlined sales tax (which was not included in the city budget) and the Panther Lake annexation sales tax of about $4.7 million per year that will go away in June 2020.

When Kent found out it would receive the streamlined sales tax funds, Ralph and the council agreed to put the monies in the capital resources fund to spend on park projects rather than into the general fund. One major project will be the conversion of the Kent Memorial Park baseball field to synthetic turf from grass as new restrooms, lighting and bleachers for the facility at 850 Central Ave. S.

The Legislature initially approved ending the streamlined sales tax payments in part because of a new Marketplace Fairness Act it passed in 2017 to collect online retail sales taxes. Cities that receive streamlined sales tax mitigation funds have that amount reduced by how much they get from the new online tax. But that online tax has only resulted in about $500,000 a year to Kent, much lower than the mitigation payments.

The 2020 session begins Jan. 13 and is scheduled to last 60 days.

Other top requests

Murray will lobby legislators for $3 million for a new Panther Lake community park as well as $3 million for a project city leaders are calling the Gateway to Kent.

“With these two requests we are laying groundwork for 2021, but will put in the request and we may get lucky,” Murray said.

She expects the state’s capital budget to be limited to between $70-80 million next session.

Panther Lake park

Panther Lake, which was unincorporated King County on the East Hill between Kent and Renton before its nearly 25,000 residents annexed to the city in 2010, has only a couple of small parks.

“This will give the residents in the Panther Lake area a sorely needed community gathering place, a sense of pride, a connection to nature and numerous opportunities to improve their overall health and well-being,” according to the city’s legislative priorities list.

The park will include a restroom, playground, open play field, picnic shelters, public art and other amenities determined by residents during the park’s planning process.

Gateway to Kent

The Gateway to Kent is a planned welcoming signage, bicycle/pedestrian walkway with lighting, landscaping, artwork and more at the intersection of Fourth Avenue South and Willis Street. The design will include a multicultural theme that reflects Kent’s diverse community.

The city is in the process of converting the Fourth and Willis intersection to a roundabout to improve mobility to and around the city. Drivers use Fourth Avenue to reach Kent Station, the accesso ShoWare Center, the Maleng Regional Justice Center, downtown and City Hall.

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