Upcoming Public Hearing on Taxes, Fees, and Other Revenue Sources

Published on September 28, 2022

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The Kirkland City Council will hold a public hearing on October 4, 2022, on revenue sources for the 2023-2024 Budget.  This is the first of three scheduled public hearings on the 2023-2024 budget.  The second and third public hearings are scheduled to be held on Tuesday, November 1 and Tuesday, November 15.  These public hearings and other feedback from the community over the coming months will help inform the City Council’s adoption of its 2023-2024 budget at the December 13, 2022, Council meeting.

The focus of the October 4 public hearing is on revenue sources. This is an important part of the budget process, as the City is facing historically high inflation and its effects on staffing, supplies, and services.  Some of the revenue sources under consideration include:

  • Property Tax – State law caps property tax increases at 1%. The City Manager proposes to use this allowed 1% increase.
  • Business License fee – The City Manager is considering an increase to the Business License fee in the proposed budget primarily to protect the City’s investments in high priority areas, notably street maintenance work. Labor and materials costs for street and sidewalk maintenance have dramatically reduced the purchasing power of existing revenue streams.  In addition, a significant portion of the City’s street maintenance work is funded with the gas tax, which has declined since the beginning of COVID-19. This proposal would generate approximately $1.75 million over the next two years, and this new revenue would help preserve existing service levels of these community priorities. 

The two potential changes to the Business License Fee being considered are:

  1. Increase the income threshold exemption from the fee from $12,000 of revenue per year to $20,000 per year.  Under this change, businesses with less than $20,000 per year in revenue would not pay the Business License fee.
  2. Increase the per employee fee from $105 to $130.  This would only apply to businesses with greater than $20,000 per year in revenue.

The City has not increased the per FTE fee since 2017. Inflating the current $105 fee by the Consumer Price Index would result in a 2023 fee of $134. The increase being considered a keeps the per FTE fee below inflation. Additionally, the current exemption threshold of $12,000 was implemented in 2008 and would be $18,321 in 2023 based on inflationary increases. The proposed threshold to $20,000 raises the exemption above where it would be on an inflationary basis. 

  • Vehicle License fee (car tabs) – The City Council is seeking to accelerate investments for sidewalks, bike lanes, crosswalks, and street medians that will give students, families and workers safe bicycle and pedestrian routes for getting to school, stores and offices The Council is evaluating a $20 car tab fee to create a dedicated median maintenance crew and fund the 45 highest priority projects in six years instead of 20-30 years.

For more information on the City’s budget process and ways to provide feedback, please visit https://www.kirklandwa.gov/budget  

 

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