Pierce County Sales Tax Increase to Fund Affordable Housing Being Discussed

Pierce County Sales Tax Increase to Fund Affordable Housing Being Discussed

TPCAR’s Advocacy team has, in recent months, been working closely with members of the Pierce County Council to craft framework for a proposal to raise sales tax by .1% – raising an estimated $20 million per year – to fund affordable housing solutions. A previous December 2022 vote was delayed to March 2023 due to the Council not having a supermajority vote of support in place at the time which would have prevented a veto by the County Executive. However, it has become clear that a majority of Council supports taking such a measure and that a 5th yes vote is likely if the proposal is tailored in specific way.

While a final draft is not yet available, TPCAR has advocated that it will support such a measure, provided that very specific targets and measures are included in the ordinance to ensure that funding is allocated in a manner to ensure that those seeking housing at the lowest levels of area median income, where the maket cannot create housing supply, are being served. The proposal would also the County to bond against the funding to leverage millions of dollars more in additional investments for housing projects, including in partnership with private market developments.

Estimates show that the increase would cost the average taxpayer in Pierce County an additional $26 per year.

The proposal comes on the heels of a similar increase enacted in Tacoma two years prior with funding from that increase allocated to affordable housing within the city. If the County Council passes this ordinance it would preclude other cities in the County from following what Tacoma did.

The sales tax tool being considered originates from State legislative action taken in 2020 which allows cities and counties to raise local sales taxes to support housing without needing voter approval. Under the law, 60 percent of the proceeds are to be used for constructing affordable housing, mental and behavioral health-related facilities and funding operations and maintenance of new affordable housing and facilities where housing-related programs are provided. The remaining 40 percent can be used for “operation, delivery or evaluation” of mental and behavioral health treatment programs or housing-related services.

TPCAR will continue to keep its membership updated on our advocacy position once a final proposal is released.