Whatcom County measure expands this sales tax for affordable housing
Whatcom County joined the city of Bellingham in approving a sales tax for low-income housing and mental-health services, a move aimed at helping reduce homelessness.
It passed the County Council on a 4-3 vote Tuesday, March 23, and takes effect immediately.
Council members Kathy Kershner, Ben Elenbaas and Tyler Byrd voted against the measure, which adds one-tenth of 1% to the sales tax on purchases in unincorporated Whatcom County.
Such a tax could bring in $2 million a year for low-income housing and mental health services, adding to the $3 million annually from an identical tax the Bellingham City Council approved March 15.
It amounts to an extra penny in tax on a $10 purchase.
“I think we really need to suck it up and pass this,” said Council Chairman Barry Buchanan.
Bellingham officials estimated that a household earning the median income of $56,000 would spend an additional $15 to $20 a year in tax.
All three members who voted against the measure said they would rather have placed the tax before voters on the Nov. 2 ballot.
Byrd described his upbringing in a home with a single mother and four children and said the measure will be felt hardest among the county’s poorest residents.
“I can’t tell you how many times she would make dinner and not eat,” Byrd said. “Twenty dollars (of tax) per $20,000 of spending doesn’t mean anything to you if you have $20 million sitting in the bank or you own your own house right now and have $200,000 in equity,” he said.
“(But) it means a ton to the people there who don’t,” Byrd said.
Councilman Todd Donovan agreed that the tax is regressive, but a sales tax is one of the county’s few available new revenue sources because Washington state has no income tax.
“We have the most regressive tax system in the country and that’s what we’re stuck with,” Donovan said.
County Executive Satpal Sidhu urged council members to approve the tax so that county officials and partner agencies can use the money to leverage funding from state, federal and other sources.
Sidhu said the lack of affordable housing has been ignored for too long.
“When you kick the can down the road, the can doesn’t go away,” he said.
Current sales tax rate in Whatcom County is 7.9%, compared with 8.7% in Bellingham, Ferndale, Lynden and Mount Vernon, according to the state Department of Revenue.
Seattle’s sales tax rate is 10.1%.
Cities can enact a sales tax for low-income housing under a law that passed the Legislature and was signed by Gov. Jay Inslee in 2020.
That law allows cities and counties to enact a one-tenth of 1% sales tax to build and operate low-income housing and to pay for mental- and behavioral-health facilities and services.
At least 60 percent of the funds must be spent on “vulnerable populations including senior citizens,” according to the law, which encourages programs for veterans and homeless families with children.
