New taxes, debt appear inevitable in Sammamish



Sammamish cash coffers will decline by 73% during the next two years, from $62m to $17m, as expenditures exceed revenues in the 2017-18 budget.

With major road projects being considered, and even without them, new taxes and/or debt seems to be inevitable.

The City Council last year approved the budget without any new taxes or debt, going into this year’s Council elections in November.

But forgoing new revenue means a burst of new taxes seems likely to stave off the so-called cross-over point when the City looks at a cash deficit. The current projection is that the crossover point will occur in 2020, according to the finance section in the Council packet, which may be found here.

Finances will be a part of the Council’s annual retreat, which begins Thursday night and continues through noon Saturday at the Murano Hotel in Tacoma. Finances are slated for discussion Saturday morning.

Revenue vs Expenses

Sammamish projects $154m in revenues during the next two years and $199m in expenditures. Sixteen million dollars in revenues come from building permits and fees, 10% of the budget. Impact fees from development will be $14m, 9% of the revenues, according to projections.

Property taxes represent 37% of revenues, or $56m.

Depleting funds

The general fund will have just $5.7m by the end of 2018, the projections indicate. The street fund declines to a mere $6.5m.

The parks capital fund is depleted to just $300,000. The General Government Capital fund declines to $600,000. The Surface Water Operating Fund and Surface Water Capital Fund decline to $600,000 and $300,000 respectively.

Surface water management is a critical issue for the Tamarack subdivision, where uphill development has caused downhill storm water flooding and erosion. The Council already set aside $750,000 to address this, and the amount may not be enough.

Potential new taxes

Sammamish is a property tax-dependent city, but in the name of holding the line on taxes, officials haven’t taken the 1% tax hike allowable per year for several years.

Under state law, a city can “bank” foregone tax hikes for implementation at a later date. Sammamish has $1.7m in banked property taxes.


The biggie is the prospect of imposing a utility tax on electric, gas, telephone, cell phones and cable television. A 1% tax would yield $1.1m annually. Up to a 6% tax may be imposed.

Business and Occupation, car tabs and a Transportation Benefit District are also options. The combined benefit could be about three quarters of a million dollars a year.

In the past, some officials suggested assuming the Northeast Sammamish Plateau Water and Sewer District and the Sammamish Plateau Water district. The latter has big revenue streams and more than $50m in cash.

Each district vowed to fight a hostile takeover.


4 thoughts on “New taxes, debt appear inevitable in Sammamish

  1. As usual, good reporting by Scott Hamilton. Sammamish grew and generated balanced budgets over the years largely from funding from one-time impact fees. Going forward we don’t have that luxury and have to figure out how to balance budgets mostly with recurring sources or revenue.

    We should be sensitive to our valued aging population on fixed incomes that are heavily impacted by property tax increases. In addition, housing becomes less affordable with a growing property tax component for new generations of homeowners.

    B&O taxes are very business unfriendly because they are applied to gross revenues creating losses or very low profits for low margin businesses. This discourages new businesses (generating taxable revenues) from entering our city and inevitably results in price increases from existing businesses.

    Other sources such as car tabs and utility taxes hit everyone further eroding their purchasing power.

    I encourage City Officials to first look at opportunities to reduce costs, to identify potential revenue sources through strategic growth/partnerships, and to continue prioritizing projects in our long-term capital plan. This should be done consistent with sustaining Sammamish as a great place to work, live, and play before revenue shortfalls are quantified and options considered.

  2. Pingback: Fiscal irresponsibility at Sammamish City Hall | Sammamish Comment

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  4. Pingback: Sammamish finance retreat Thursday to ponder whether new taxes needed | Sammamish Comment

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