Pierce County Council votes on sales tax to address housing crisis. Here’s the decision
After a packed, nearly two-hour public hearing Tuesday, the Pierce County Council approved an ordinance levying a sales-and-use tax of 0.1% to fund housing and related services.
The tax will be equivalent to collecting a penny for every $10 purchase or 10 cents on every $100 purchase.
The tax is expected to bring in $6.3 million in revenue in 2023, $20.8 million in revenue in 2024 and about $67.5 million from 2025 to 2027, according to county estimates. Pending the Pierce County executive’s signature, the ordinance would go into effect July 1.
The city of Tacoma imposed a housing and related services sales tax within its jurisdiction in 2021, which means Tacoma residents will not pay an additional 0.1% tax. Other residents in Pierce County will.
In order to pass, the council needed a super-majority vote of five members in favor. Ryan Mello, Dave Morell, Marty Campbell, Jani Hitchen and Robyn Denson voted in favor. Amy Cruver and Paul Herrera voted against.
Pierce County Council named the ordinance the Maureen Howard Affordable Housing Act. Howard, who died in January, was a fierce advocate for the unhoused in Tacoma and Pierce County.
The ordinance created a Housing and Related Services Fund. By Dec. 1, the Pierce County Human Services Department must present a six-year advisory plan to the council to review and adopt. The plan would be revisited every other year.
Half of the funding would support projects serving residents whose income is between 30% and 60% of the area median income. Thirty percent of funding would support projects serving residents whose income is at or below 30% of the area’s median income, and 20% of the funds would go to housing-related services and behavioral health treatment facilities and related programs, according to county documents. Pierce County’s median income in 2021 was $82,574, according to the U.S. Census Bureau.
Under law, at least 60% of the funds collected from the tax must be used for the construction, acquisition or land purchase for affordable housing or behavioral health facilities, or for the operation and maintenance costs of new units of affordable housing, facilities where housing-related programming is provided or newly constructed evaluation and treatment centers, according to the council agenda.
According to the council’s 2022 Comprehensive Plan to End Homelessness, Pierce County needs to spend an additional $117 million a year to fully fund the homeless crisis response system.
Pierce County’s Housing Action Strategy, adopted in 2022, found that one-third of Pierce County residents are housing cost-burdened, and housing production needs to increase by 46% to meet demand.
Capital funds may only be allocated to affordable housing and housing-related service providers that serve people with income at or below 60% of Pierce County’s median income and are people with behavioral health issues, veterans, senior citizens, persons with disabilities, homeless or at-risk of being homeless or domestic violence survivors.
In 2021 the county council imposed a 0.1% sales tax for behavioral health and therapeutic court programs and in May 2021 appropriated $19.1 million to fund those programs.
The article has been updated to reflect the estimated revenue from the tax for 2023.
