Three cities in Skagit County have approved sales tax increases to fund affordable housing and homeless services, giving them new resources to address homelessness.
Both city and county leaders see this as a springboard to building a more collaborative process for deciding how such funding gets used.
The Mount Vernon and Sedro-Woolley city councils approved the tax in late August, and the Burlington City Council did so Thursday.
State legislation that began as House Bill 1590 gives cities and counties the authority to implement a 0.1% sales tax increase to fund homeless services and the construction and maintenance of affordable housing, without requiring a vote of the people.
Anacortes residents voted for an identical sales tax increase in 2020, before House Bill 1590 was implemented.
The 0.1% increase amounts to an additional $1 on a $1,000 purchase.
The additional tax collected in the four cities will generate an estimated $2.6 million a year.
The county commissioners held a public hearing Thursday, and are expected to take action on their own tax increase — impacting the towns and unincorporated Skagit County — at a follow-up meeting Sept. 30.
Such an increase would bring in about $708,000 a year.
As it stands now, Skagit County spends about $3 million on housing programs for the homeless, according to county Public Health analyst George Kosovich.
At the Thursday hearing, Kosovich said the various rental assistance, emergency shelter and homeless services programs the county supports work well and meet state performance requirements, but because of limited funding can’t function on the scale they’re needed.
In 2020, the county and its partners identified 1,849 residents who were eligible for some form of homeless support services, a 15% increase over 2019. At the same time, average rents in the county shot up to $1,340, up from $1,096 the previous year, he said.
Throughout the county, there is more need than available resources, he said. Coordinated Entry, a program that matches people with housing assistance and other services, regularly has a 900-person wait list.
Rising rents will exacerbate this problem, as more families will be unlikely to find anything they can afford, he said.
The sales tax increases allowed under the new law are a useful funding tool because of the flexibility in how the money can be spent, he said. The law allows the county and cities to allocate this funding however they see fit and allows them to react to changing community needs.
If the cities hadn’t chosen to implement their own tax increases ahead of the county, the county would have had full control over all this new revenue. Instead, the cities will now collect this tax themselves when the increases go into effect in 2022, and plan to negotiate with the county on how to use the funding.
“This action by our city is not something we would probably pursue on our own,” Burlington Mayor Steve Sexton said. “It’s more of a preventative action.”
With its concentration of car dealerships and big-box retail stores, Burlington generates about 30% of the county’s sales tax. With that in mind, the city deserves to have a say in how the money is spent, he said.
As it stands, cities have few sources of funding that can be used on homeless services, and has no formal role in determining how the county spends its funding designated for homeless services.
“I don’t see how you can exclude them when the cities are dealing with those (homeless) individuals more frequently,” Sexton said.
Mount Vernon Mayor Jill Boudreau said the lack of city presence in these conversations doesn’t make sense, because cities are closest to the issues. Homelessness is concentrated in cities, and the kind of high-density affordable housing complexes such funding can help pay for aren’t feasible outside the cities.
“Who knows better the solutions for their city than the city council and their mayor?” she said.
County Commissioner Lisa Janicki said she understands and agrees with the cities’ desire for more influence in the process.
“I think they want a voice at the table, and I respect that,” she said.
Janicki said Burlington’s First Step Center is an example of what the county and cities can achieve together.
The homeless shelter and social services hub sits on city-owned property, and is supported primarily by county funding. Mount Vernon and Sedro-Woolley also contributed.
Janicki has pitched the city mayors on the idea of an advisory board, with representation from cities and the county. The board would weigh in on plans for spending this funding, and possibly other homeless-related funding as well.
“Historically, there has been a lack of trust in how the county makes decisions on housing and whether the cities have a voice,” she said.
Janicki said she is looking forward to further discussion on collaboration after the county considers approval of its tax increase on Sept. 30.
The alternative to collaboration might be a situation where neither the county nor any individual city has enough money to invest in the kinds of projects that can really make a difference, she said.
“If you slice the pie too many times, there’s not enough there to do anything,” Janicki said.
In order to get anything significant done, not only will the entities have to pool their resources, but they will have to use that funding as seed money to attract state and federal grants, she said.
Boudreau, Sexton and Sedro-Woolley Mayor Julia Johnson said they want to more forward on collaborating with the county.
Johnson said she’s excited for the city to have a seat at the table when it comes to dealing with homelessness.
She said her city is interested in partnerships, and said this board would be a way to ensure that Sedro-Woolley gets something in return for the tax dollars it contributes.
“These tax dollars belong to the people of Sedro-Woolley,” she said. “It should come back to our community.”
Sexton said the relationship between cities and the county is stronger than it’s been in the past, but there’s no guarantee it will stay that way.
He said the cities should capitalize on this goodwill and create a formal process for spending on affordable housing and homelessness that can outlast current leadership.
Boudreau said she agreed. Ensuring this funding is used in an equitable, fair way requires everyone buy in.
“We all want it to be a long-term success,” she said.
Sexton said even absent this new tax revenue, he’d be interested in forming an advisory board.
He said the county already spends millions of dollars on contracts with nonprofits building affordable housing, running shelters, and offering health and human services to the homeless, and it might be time to hold a comprehensive evaluation of how well that money is being spent.
“Let’s define a scope of work for all these agencies,” he said. “We have to be as efficient as we can with every dollar we get in this county.”