City Council passes 6% Utility Tax
During its March 18 meeting, the Sammamish City Council passed a 6% utility tax with a 6-1 vote. Councilmember Kent Treen cast the only dissenting vote. The tax will go into effect on Jan 1, 2026.
According to the City Council’s resolution, the tax will apply to natural gas, electricity, telecom, cable, water, sewer, surface water, and solid waste services. It will also include an equivalent use tax on brokered natural gas.
For perspective, city Finance Director Vicky Carlsen presented a resident cost example at the Feb. 18 city council meeting.
“If your utility bills add up to $300 a month or $3600 annually, you would pay about $18 a month or $216 annually,” Carlsen said.
The tax aims to address the City’s budget shortfall. If left unaddressed, the shortfall would force reductions or eliminations of services, including police and fire services, park and road maintenance, and snow and ice removal.
“To me that would be incredibly challenging going forward, especially given the data that we had on how much our community does value the services that the city provides,” said Councilmember Sid Gupta at the March 18 city council meeting.
According to the Fiscal Sustainability Taskforce (FST), the city’s budget has a growing structural imbalance. Even after significant budget reductions, the City’s costs are projected by City vendor Baker Tilly to exceed revenue by $800,000 in 2025. Currently, the City relies on its budget reserves to bridge the gap. According to the FST, inaction could use up reserves as early as 2029.
The FST is made of community members charged with presenting budget recommendations to the city manager. It includes former Sammamish city mayor Don Gerend and former Bothell mayor and Sammamish resident Debbie Treen, among others.
The FST unanimously recommended three key strategies to address the City’s fiscal gap. The first is a $1 million reduction in the general fund over three years, which the City has already completed. The second is the 6% utility tax. The third is a voter referendum for a taxable Metropolitan Park District (MPD). The MPD would not go into effect until 2030 at the earliest. According to Carlsen, the combination of new income and budget cuts is needed to achieve fiscal sustainability. This approach was selected over alternatives such as business fees and taxes, reductions in services, and increases in property tax levies.
“To date, the city has not used other revenue options that are available to cities. We have significant unfunded capital improvement needs,” said Carlsen at the Feb 18 meeting.
While most cities in King County have implemented a utility tax to boost revenue, Sammamish has avoided it–until now. Baker Tilly estimates that the tax will provide about $10.6 million annually.
Because the utility tax is use-based, its revenue can only be estimated. Residents may reduce their utility usage in order to lower monthly expenses. However, according to Baker Tilly’s projections, the additional income would make the City’s budget net positive until 2029.
“The utility tax gets us financial sustainability for two to three years,” said Carlsen at the March 18 meeting. “We have to bridge that gap until at least 2030.”
