Olympia's Finance Committee has started looking at viable options to provide a revenue stream for the city's Climate Program.
At the committee meeting held Wednesday, March 15, Olympia Climate Director Dr. Pamela Braff presented different types of revenue options that would support the city's program to achieve its climate goals.
In September, Councilmember Lisa Parshley requested a referral for a specific revenue stream dedicated to climate works.
Parshley asked the committee and the Climate Program staff to evaluate state law for the possibility of either excise tax, property tax, or sales tax that would fund staffing and administration of the program.
At the meeting, Braff provided information on different revenue options, including property tax, a sales tax, a private utility tax, and a municipal utility tax.
Property tax
According to Braff, the city has the authority to implement property tax, which would require voter approval to approve a levy lid lift.
Braff noted that this option creates consistent and predictable funding sources imposed for a specified duration. It would increase costs to property owners.
"One of the benefits is that they are likely less progressive than other types of approaches. Higher values, not always, correlate with higher abilities to pay," Braff said.
Olympia City Manager Jay Burney reminded the committee that property tax is constrained by the 1% and does erode over time, and it may need a levy lid lift in the future.
Sales tax
Braff noted that sales tax requires state action. "We don't have local authority to implement sales tax specific for climate action."
She added that additional local sales taxes are restricted to specific applications. Inspire Olympia Cultural Access tax is one example.
"It needs to be authorized by the state first. Some of those restricted sales taxes require voter approval, and some do not," Braff said, adding that most sales taxes may be imposed permanently.
She said it could generate tax revenue from out-of-town visitors. It could also be a tax burden (as a percentage of income) to low-income households.
Under this option, the estimated revenue per 1% increase is $2.1 million. The estimate is based on 2022 actual collections.
Private Utility Tax
According to Braff, the city has the authority to implement a private utility tax, such as gas tax, electricity, and telephone services, which requires voter approval. Like sales tax, the tax burden would fall the hardest on low-income households.
The estimated revenue for this option - a 1% raise in three different private utility taxes – is anywhere between $165,000 to almost $600,000.
Municipal utility taxes
Braff said cities in Washington State have local authority to implement municipal utility taxes and do not require voter approval.
"There is no established upper legal limit," Braff said, adding that it has similar concerns about potential tax burdens on low-income households.
The municipal utility taxes are garbage, sewer, storm, and water. The estimated total revenue per 1% increase on each is just over $500,000.
Finance Director Aaron BeMiller informed the committee members that the city has Lifeline Program, which cuts the utility rates in half to support low-income households.
Mission first
Committee member and councilmember Jim Cooper said he wanted to see the budget before discussing where to find revenue.
"What I don't see here is what we would gather by doing a $5 climate charge on every transaction that goes through the city. Mission first and then money," he said.
Braff said she would update the committee in August on the budget they would develop for funding climate actions for the next one to five years, including staffing, pilot studies, grant writing, and incentives.
Braff said they are still updating the greenhouse gas inventory and the city's carbon wedge analysis. "Once we get that, that will inform all of the magnitudes of the action and the budget pieces that support that."
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Honestyandrealityguy
Gotta love those Democrats. Record cold and snow during their global warming.
The earth's axis and rotation changes each year as do our sun and other planets. The sun's axis and rotation changing as all the solar systems move around our galaxy. All the galaxies moving around the ever expanding universe.
But, buy a battery made using gas and all will be OK.
Thursday, March 16, 2023 Report this
nkhloly
What happened to the option of an excise tax?
Thursday, March 16, 2023 Report this
AugieH
I guess it's not enough that the feds spend billions of our $ on a green agenda, but now the city fathers of Olympia feel compelled to jump in on something above their pay grade. If any tax increase is on the ballot to fund this, vote NO!
Thursday, March 16, 2023 Report this
Claire
No matter how much money is allocated and spent, you cannot affect the climate.
Thursday, March 16, 2023 Report this
curtzt
The property tax would be less regressive than the other options, not less progressive. As the article says, people with more expensive houses would generally have more ability to pay.
Friday, March 17, 2023 Report this
Southsoundguy
This is just more stealing peoples money. Rather than come up with ways to get into our pockets, these officials could spend sone time reading about the UV absorption spectrum and the logarithmic relationship between CO2 concentration and radiative forcing. Tl;dr we need more CO2 and by trying to restrict it, these officials are participating in the apocalypse, basically.
Friday, March 17, 2023 Report this
wildnature
The Legislative appointed Nisqually River Council has already put a lot of work and studies into this, for adapting this area to climate change. Please consult them before putting money into re-inventing the wheel.
Friday, March 17, 2023 Report this
William M
This needs to stop now. First, major economic powers, such as China and India, are increasing their use of fossil fuel. Any contribution to reducing the global carbon footprint would be so minute it wouldn't matter. It would only be another form of worthless viture signaling. Second, we can't afford another tax increase. Our property taxes are very high as is it, and add the troubling economy this is not only a bad idea, it is being pushed by another politician disconnected from her constituents. This good idea fairly needs to be confronted by and challenged by adults.
Saturday, March 18, 2023 Report this
JackJohnston
Property tax seems to be the go-to for government. Seem to forget each new property tax increase rental costs and makes housing less affordable.
Saturday, March 18, 2023 Report this
2theroots
the level of actual knowledge in the comments below is rather depressing.
First of all Honesty guy the phrase was changed from global warming to climate change to signify that the heating of the planet destabilizes weather in ALL ways, so it is well established that these record snows, cold and rain are a result of climate change. Augie - our mayor and half our council is made up of women so "city fathers" really does not apply. Claire it is not true that nothing can be done. We have known the solutions for decades but have not had the political will to do it (or clarity due to misinformation campaigns.) William it is a problem what India and China are doing but given the extreme urgency of the situation - every city and every location has to start doing our part now and hope it buys us the time for the places that will come to it more slowly. So it is great that the Nisqually River Council has been taking action - and that should by no means need to stop our local jurisdictions from doing their part. We are literally to the point where if we want the next generation to live out their natural lives we have to do a MAJOR course correction now - and that will require money. So I am glad our city leaders are trying to figure out how to fund the work they have committed to do.
Sunday, March 19, 2023 Report this