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A proposed excise tax on the sales of homes in unincorporated Kittitas County is resulting in an outpouring of both public inquiry and feedback to the Kittitas County Board of County Commissioners, with residents having the chance to voice their opinions on the issue at a public hearing next Tuesday.

The homes subject to the tax are currently being taxed at one quarter of 1% under what’s referred to as the real estate excise tax, or REET 1. The proposed increase, referred to as REET 2 would increase the excise tax to one half of 1%. The tax is paid by home sellers upon the sale.

According to an information sheet provided by the BOCC, the revenue received from the REET is restricted and may only be used for financing capital projects in the capital facilities plan, with REET 2 funds being specifically directed to infrastructure and parks capital projects. A portion of the REET 2 funds are allowed to be used to maintain capital projects under special conditions.

The information sheet added that new legislation passed in 2019 expanded the use of revenues for homeless housing to include affordable housing, and that until Jan. 1, 2026, any county can use up to $100,000, or 25% of available REET 2 funds, whichever is greater, for affordable housing projects and the planning, acquisition, construction, reconstruction, repair, replacement, rehabilitation, or improvement of facilities for those experiencing homelessness, as long as such projects are listed in the capital facilities plan.

PUBLIC INPUT WANTED

The BOCC information sheet explained that Kittitas County opted into the state’s Growth Management Act in 1990, which requires that the county plans for the rate of population growth according to the GMA.

“As a county that is required to plan under the GMA, the legislative authority, your elected commissioners of the county may enact the tax without going to a vote of the people,” the release said.

Despite the fact that the tax can be passed without a public vote, the BOCC is still required to hold a public hearing to listen to the concerns of residents before ruling on the tax. Commissioner Brett Wachsmith said the board can go a variety of directions at Tuesday’s meeting.

“We can deny it at the public hearing,” he said. “We can pass it, we could continue it to a different day and time, or we could remand certain things back to staff if we have issues or want clarity. The public comment portion of the hearing is one of the reasons why I like being county commissioner is because I get to hear from my constituents on issues like this.”

Wachsmith the outpouring of public inquiry into the tax makes the public hearing critical towards which direction the board will go in during Tuesday’s meeting could also result in the issue going to a public vote on a future ballot.

“If what we’re hearing from our constituents is we wouldn’t necessarily be opposed to it but let’s look at putting it on a ballot measure, we’ve had precedent as a board doing that already with the mental health tax,” he said. “It might make sense to look at putting it on the ballot at the public hearing. I’m just excited because getting citizen engagement is kind of hard at times, so it is exciting to see our community voicing their opinions, their concerns, and their support.”

VARYING OPINIONS

Homeowners in Kittitas County may remember receiving a mailer in their postbox last month that referenced the excise tax proposal. The mailer was paid for by Washington Realtors on behalf of the Kittitas County Association of REALTORS.

Kitty Wallace with the Kittitas County Association of Realtors said this issue is not a new topic for the association, and that it has come up multiple times in the past.

“The association has been against REET 2 for several years,” she said. “This is not new with the current commissioners. This was brought to our attention several years back when Paul Jewell was commissioner and we opposed it then.”

Although she said the association understands there is a need for capital funding within the county, she said the tax on home ownership is not in the best interest of homeowners in the county, especially given the ongoing affordability situation within the county.

“We feel the affordability rate of home ownership is already struggling in Kittitas County, so we are opposed to REET 2 for affordability reasons,” she said. “We definitely want to be part of a solution and not part of a problem. We’re open to dialogue with commissioners, but we just don’t feel like exercising REET 2 in the manner they are doing is appropriate to our constituents and our members.”

As the mailer from the realtor’s association referred to the current housing crisis within the county, Wachsmith said he could see potential for some of the funds to be used as described in the RCW towards affordable housing projects.

“We do not in my opinion have any affordable housing on the market in Kittitas County for that young family that’s starting out after college or whatever,” he said. “That’s one thing I would be interested in looking at. I would also be interested in possibly forming a committee at the county level like we have with our distressed sales tax money and our lodging tax money. These people meet, vet projects, and then pass on recommendations to the board. If we’ve had this much public involvement and interest in this already, it kind of makes sense to me that we would ask private citizens in our community what their opinion is towards the use of these funds and what would they like to see the county commissioners approve or not approve.”

Commissioner Cory Wright said if the excise tax is passed, it will provide crucial funds towards filling a glaring gap in the county’s public works maintenance budget.

“Out of the last 22 years, the county chose not to take the minimum 1% property levy allowed by law over 12 times,” he said. “What happened over that time is costs rose and maintenance accrued. The choice was made not to take that slow rise in levy rates, and circumstances in those times may have warranted that, but we’re now facing a maintenance shortfall in our roads and facilities.

Wright said the budget gap now amounts to $7 million over the next five years, and an $80 million shortfall over the next 20 years in the county road network system. He said that the issue is only compounded by the exponential population growth within county limits.

“When I was born here in 1973, the population was right around 25,000 people,” he said. “That’s doubled in my lifetime, and I can’t imagine what it’s going to be when my children are my age if we’re already looking at a population figure of 65,000 just in 16 years from now. If we don’t make decisions for the future when we have the option and the opportunity to do it, we will never be able to catch up and stay competitive while giving our children a legacy that will still maintain a Kittitas County we can recognize. I think it’s time to start examining these tough decisions that have been kicked down the road.”

Reporting for the DR since March 2018. Lover of campfires, black labs and good vibes. Proud Humboldt State alum!

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