PORT ANGELES — City lawmakers have authorized a tax credit to support affordable housing.
The Port Angeles City Council voted 7-0 Tuesday to adopt an ordinance authorizing the 0.0146-percent state sales tax credit under House Bill 1406.
City officials estimate the tax credit will generate $58,000 per year for affordable housing in the city.
House Bill 1406 provided additional money for local governments to build affordable and supportive housing. The measure was co-sponsored by state Reps. Mike Chapman, D-Port Angeles, and Steve Tharinger, D-Port Townsend, and became law in 2019.
The revenue to the city is a credit against the state portion of sales and uses taxes already collected within city limits. So levying a tax under HB 1406 does not increase the sales and use tax rates.
The bill allows cities and counties to double their share of the sales tax credit by establishing a “qualifying local tax” for affordable housing.
City voters approved a qualifying local tax by passing Proposition 1, a one-tenth of 1 percent sales tax increase from 8.7 percent to 8.8 percent for affordable housing, last November.
The measure was backed by 56.2 percent of city voters. It will generate an estimated $320,000 for affordable housing, city officials said.
Clallam County and the cities of Sequim and Forks have each have redirected a 0.0073 percent portion of state sales tax to fund programs that reduce homelessness and generate affordable housing.
The sales tax rates in those jurisdictions will not change.
Port Angeles City Manager Nathan West said the council-approved ordinance would “complement” the voter-approved ballot measure.
“It’s going to be important to come back and talk about how we can coordinate with other agencies but also coordinate with other jurisdictions within Clallam County,” West told the council Tuesday.
Port Angeles City Council member Mike French, who proposed a qualifying local tax for House Bill 1406 last summer, praised Chapman and Tharinger for their work on affordable housing.
“I really hope that we do find a good way to coordinate the funds so that we can use them in the most effective manner,” French said.
“I just want to warn council that this might be something where we have to get outside of our comfort zone with how we spend this money.
“When you do have coordination with other jurisdictions you give up some amount of control,” French added.
“I think that we should be open to having those conversations. I do think that those will be in some ways challenging, but I look forward to them.”
Mayor Kate Dexter said other jurisdictions represented at a recent Association of Washington Cities conference had not yet adopted a local qualifying tax for House Bill 1406.
“There were a lot of people in the room for the conversation on housing who were shocked that we had already adopted this and had a successful ballot measure,” Dexter said.
“So good for us for being proactive and seizing the opportunity this year.”
In other action Tuesday, the City Council voted 7-0 to approve a multi-jurisdictional hazard mitigation plan.
Port Angeles Fire Chief Ken Dubuc said the adopted plan will make the city eligible for federal hazard mitigation funding.
Clallam County, which spearheaded the multi-jurisdictional planning effort, approved the 411-page hazard mitigation plan last month. It is available at www.clallam.net.
The section of the plan that is specific to the city of Port Angeles is 38 pages.
“The plan was submitted to the state Department of Emergency Management and also to FEMA (Federal Emergency Management Agency),” Dubuc told the City Council.
“It’s been approved by both of them, and it’s now ready to be adopted by resolution by all of the stakeholders in the plan.”
Meanwhile, the city of Port Angeles is in the process of updating its comprehensive emergency management and continuity of operations plans, Dubuc said.
“We are currently in a rewrite phase of both of those plans and we will be providing plenty of opportunity for input during those rewrites during the year,” Dubuc said.
Reporter Rob Ollikainen can be reached at 360-452-2345, ext. 56450, or at [email protected].