Anacortes voters will decide on Feb. 11 whether to increase the local sales tax from 8.7% to 8.8%, with the increase set aside to fund affordable housing.
With a portion of the state’s share in sales tax returned to the city for affordable housing, the effort could raise about $13 million over 20 years. Supporters say the measure will speed the construction of affordable apartments proposed by the Anacortes Family Center and affordable townhouses proposed by the Anacortes Housing Authority; and renovation of the historic Olson Building, also owned by the Anacortes Housing Authority, for continued ground-floor commercial use and second- and third-floor affordable apartments.
The City Council voted 5-0 Monday to place the measure on the ballot. Councilmen Bruce McDougall and Matt Miller were absent.
A bill approved earlier this year by the state Legislature returns .0073% of the state’s share of sales tax revenue back to local jurisdictions that choose to use the funds for affordable housing programs. If local voters adopt a sales tax measure, called a Qualifying Local Tax, for up to 1/10th of 1% for affordable housing, the state will increase the return of its share to .0146%.
If voters reject the measure, the city would continue to receive .0073% — about $41,655 a year — from the state. The .0146% and the voter-approved 1/10th of 1% would generate $653,934 a year, according to city Finance Director Steve Hoglund. That estimate is based on retail sales in Anacortes of about $570.6 million from July 1, 2018, to June 30, 2019, according to Hoglund.
Anacortes resident Walter Guterbock spoke in favor of the resolution.
“I’m normally not in favor of increasing taxes,” he said. “It’s easy to approve all these little (taxes.) It’s like water dripping on a rock — eventually it will dissolve the rock. But to put it in perspective, on a $200,000 boat, this is a $200 tax increase. On a $40,000 car, it’s $40. And on a $100 hardware bill, it’s 10 cents. So I don’t think people are really going to feel this.”
He noted that the affordable apartments proposed by the Anacortes Family Center will contain a child care center. “Child care is a great need in the city,” he said.
Susan Rooks, a member of the Anacortes Housing Commission, defined affordable housing and the income levels that would fund housing stability because of the sales tax measure.
“Affordable housing is housing that doesn’t cost you more than 30% of your family income,” she said. “This is a definition that’s been around for 70 years now. It’s the definition banks use when looking at a mortgage application. It’s the standard rule of thumb. If you are paying more than 30% of your income for housing and making less than the area median family income, then you are probably struggling to make ends meet.”