Commissioners OK sales tax increase to pay for affordable housing projects

Posted 12/31/20

Jefferson County commissioners have unanimously approved a sales tax increase that will provide funding for affordable housing and related support services.

Revenues from the 1/10th of 1 percent …

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Commissioners OK sales tax increase to pay for affordable housing projects

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Jefferson County commissioners have unanimously approved a sales tax increase that will provide funding for affordable housing and related support services.

Revenues from the 1/10th of 1 percent increase will start being collected in April. Consumers will pay an additional $1 in sales tax for every $1,000 spent on taxable items in the county.

The sales tax increase had broad public support during a public hearing before county commissioners last week.

Terry Smith, a Port Hadlock resident who has sold real estate in the area for 20 years, recalled a couple of clients over the past year who couldn’t afford to stay in their homes; one had many medical bills from three strokes.

“And both ended up in a camper with nowhere to put the camper, because ... they can’t afford to lease space for the camper, either,” Smith said.

“We’re running into a lot of clients that have this problem,” she added.

Smith, who is a member of the county’s Affordable Housing & Homeless Housing Task Force, said she’s also had clients who have been offered jobs in the area but had to turn them down.

“They couldn’t afford to live here,” Smith said.

The region also has a substantial homeless population, she added.

Smith supported the tax as a way to get more permanent housing for people in need.

Port Townsend Mayor Michelle Sandoval praised housing providers and others for working on a strategy for spending the revenues from the sale tax increase.

The Joint Oversight Board-Affordable Housing and the Affordable Housing Tax Force support the proposal, as well, she said.

“We need to get structures built,” Sandoval said.

The mayor noted her earlier hesitation to the tax increase.

“There had been no plan. There had been no strategy. There had been no conversation about it,” Sandoval said.

A STRATEGY FOR SPENDING

Leaders in local government met with various housing providers, Sandoval added, and they were in unison on how to move forward.

The Peninsula Housing Authority, OlyCAP, Bayside Housing Services, Habitat for Humanity of Jefferson County, and DOVE House worked together to devise a list of six examples of the kinds of permanent housing projects that could be funded by the sales tax increase, as well as a strategy for using the new funding.

The soonest the county will receive the new revenues is June, and county officials estimate the sales tax increase will generate between $350,000 to $375,000 in 2021.

In future years, the increase is expected to bring in $600,000 annually, depending on the economy. 

During the debate the last time the tax increase was suggested, Sandoval recalled, people constantly said they wanted to know how the money raised would be spent.

“The homeless population is growing,” the mayor added. “The clients at the shelter have been constant. We’re not moving people through because there’s nowhere to move them.” 

“We need to really put some infrastructure, houses, apartments, whatever it takes on the ground, to get rid of the bottleneck we have here,” Sandoval said. “I’m all in favor of this.”

Julia Cochrane of Port Townsend said she’s been talking about the unsheltered on a daily basis since the COVID pandemic started.

“I support this totally. Absolutely,” Cochrane said.

“I know how hard it is for people who work in our service industry to find housing,” she added.

TAX IMPACT TO BE SLIGHT

Cochrane noted that some have criticized the sales tax increase as regressive, and that it would hit those with lower incomes harder than those who are wealthy.

“That’s true. But there’s another side of that,” Cochrane said.

As someone who receives Social Security and small retirement payments, Cochrane said she likely wouldn’t be taxed on monthly purchases that go above $300.

For her, the monthly impact would be 30 cents, she said.

Commissioners roundly supported the proposal.

“People come up with a lot of ideas on what we can do without money,” said County Commissioner David Sullivan. 

“We’ve been struggling to do most of those things for years, going all the way back to 2006 where we had the housing action plan,” he continued.

“We looked at public properties; there’s almost nothing that could qualify,” he said, recalling properties that included a former graveyard or those needed for future capital investments.

Changes to state law over the years have brought small, incremental changes, Sullivan noted.

Revenues from the sales tax increase, as well, won’t completely bridge the gap in funding for affordable housing that exists.

But it will help, Sullivan said.

“It’s still not going to be enough to solve all the need,” Sullivan said. “But we have to remember that many of the grants that are available out there require a local match. There’s ways to multiply this money a number of times over.”

“It’ll put us in a position to compete for funds,” he said.

Exactly what the money will be spent on will depend on the creativity of the community, Sullivan said. And any proposals will eventually go to the county commissioners for approval.

MORE ACTION NEEDED

Commissioner Kate Dean said the tax increase was a small step in the “massive structural issue” of affordable housing.

“We all don’t relish the idea of raising taxes right now. People are hurting,” Dean said.

Even so, it’s a small funding source for a defining issue of this era, she said: income inequality.

“That is seen most of all in housing,” she said. “We know the need is there.”

Dean said she strongly supported the increase, and said it would be a minor hit for residents who are just getting by, as much of their money goes toward food and nontaxable items.

“It’s a worthwhile investment,” she said, and one that may help provide greater dignity for some of the area’s residents.

The sales tax increase needs to be one step in a comprehensive look at housing, Dean added.

Commissioner Greg Brotherton noted there had been some philosophical opposition to the proposal.

“I’ve heard no one dismiss the housing crisis that we are in,” Brotherton added.

“Our ladder is broken. Our continuum of housing is broken here,” Brotherton said. “It resembles more a slide into homelessness, unfortunately. Anything we can do to start putting rungs back in that ladder, I think, is incumbent of us to do.”

The commissioner said he, too, was concerned about taxes that are regressive in nature.

“If we can make this translate to as many people and units as we can, that’s going to be the real success,” Brotherton said.

PUBLIC VOTE NOT NEEDED

The tax increase did not require a public vote following the passage of House Bill 1590 in the 2020 Session. 

The law requires that 60 percent of revenues raised under the sales tax increase be spent on the construction of affordable housing or housing-related services or operations and maintenance of new units of affordable housing, or for building mental and behavioral health-related facilities.

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Mike Galmukoff

Amazing... Millions squandered on the Cherry St Project (and counting) and they want more of "our" money.

Friday, January 1
HarveyW Colatteral Damage

Cherry Street. Sandoval and her employee Paul Rice the masterminds. There was a total lack of planning the budget and true costs. Cherry Street was and is Sandoval's baby, it is an imported toxic waste site. Still the 3 time Appointed Mayor and 20 year City Council member can give lip service. Still some pretend she knows what she is doing in a position needing true leadership. The City used the REET (Real Estate Excise Tax) money available for low income housing elsewhere. Correct me if I am mistaken.

Materials like plywood are up 300%. Careers depend on acting like a true fix is just around the corner. Best to those honestly working towards helping others. I hope the commissioners look at zoning changes to allow ADU's on non owner occupied property with appropriate mitigation and other measures, such as affordable septic systems, that could make a difference for some.

Or not.

Saturday, January 2