Clallam County OK sales tax hike for housing

Commissioners vote 2-0 with Peach absent

PORT ANGELES — Clallam County Commissioners have raised the sales tax one-tenth of a percent to use for affordable housing.

The measure passed 2-0 on Tuesday, with Commissioner Bill Peach absent.

“While this tax by itself will only solve a small portion of the housing problem, if it is coupled with other funding sources, such as funds from HB 1406, ARPA, Opportunity Fund and matching state funds such as the Housing Trust Fund, real progress could be made on this issue,” Commissioner Randy Johnson said.

In 2020, the state Legislature passed House Bill 1590, which allows cities and counties to adopt a one-tenth of 1 percent sales and use tax, the collection of which would go toward affordable housing.

The City of Port Angeles adopted the ordinance in mid-2020, soon after the state passed enabling legislation.

It is estimated that the county’s tax could generate $1.3 million in revenue for affordable housing after one year and $32 million after 20 years.

At least 60 percent of the funds must be used for construction of affordable housing, construction of mental and behavioral health-related facilities, funding the operations and maintenance costs of new affordable housing units and facilities where housing-related programs are provided, or newly constructed evaluation and treatment centers.

“I think it’s no secret that housing options in this county are scarce, and further finding affordable housing is near impossible right now,” said Sarah Martinez, Peninsula Housing Authority executive director, during Tuesday’s meeting.

“One of the most significant impacts in addressing our affordable housing issue is to build more units, which requires significant capital.”

“When seeking capital funding sources for the construction of affordable housing projects, there is significant importance in leveraged funds, even more specifically locally leveraged funds,” Martinez continued.

“Local funding shows evidence to state and federal funders that housing projects are not only supported in principle but supported with financial contributions that speak much louder than a letter of support,” Martinez added.

Port Angeles resident Ingrid Carmine said the measure will help “to lower hospital costs and police and sheriff costs because housed people are healthier and have a place to recover from illness and also police are less likely to be involved with them.”

She added that an advantage of the tax is that much of it would be paid by tourists.

“Since they will be formally housed, people will have a place to live, and there will be fewer on the streets. Since they are housed, they will also have garbage cans and that would mean less trash around, which is nicer for the tourists,” Carmine continued.

Although most who spoke to commissioners about the tax favored it, some worried about passing a new tax when inflation is high and many are still recovering from the economic impact of the COVID-19 pandemic.

“I would really like to see the commission table this for one more year,” Patrick Day said.

“After looking at what everyone has been getting hit with, with the increase of inflation and property taxes going up, I think this is just an inappropriate time to turn around and tax people more on something that I don’t think the commission has looked at thoroughly.

Day said he thought the tax could, in the end, increase homelessness.

“Right now, I think this would push people that are living paycheck to paycheck and retirees on a fixed income over the edge … I think this is a very inappropriate time after this long pandemic, and to impose more taxes on people and increase the homelessness issue.”

Others recommended that the tax be put to a vote of the people rather than be approved by the commissioners.

HB 1590 was amended in June 2020 to allow for the tax to be approved by a city or county legislative body rather than through a public vote, although that remained an option.

“There’s an opportunity in the underlying RCW to put this to a vote of the people in addition to having it be enacted in a councilmanic action by the commissioners themselves,” said Jim McEntire, former county commissioner and co-founder of the Independent Advisory Association.

“I don’t think there would be any question, should the entire population vote in the affirmative on this tax, as was done with the juvie tax several years ago,” McEntire added.

“The money from that tax-funding stream dedicated to juvenile justice placed a substantial amount of money in the county general fund, and that’s another potential source of revenue for this kind of housing that we’re contemplating here,” he added.

McEntire also urged a sunset clause that would require a review of the tax after 10 years to see how much has been generated and if the tax improved affordable housing opportunities.

“No one gets excited about a tax,” Johnson said.

“But, as been described by many of the folks that fund housing, leverage comes from the fact that the county or a local entity provides part of those funds, and that is very important … .”

All funding sources available taken together “will still only solve part of the problem,” Johnson continued.

“When I have had a working family, husband and wife, and they qualify for the 60 percent AMI (area median income) and they’re living in a tent … I’m sorry, but were need to do something better than that,” he said.

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