OLYMPIA — Washington cities are a step closer to having the option to share sales tax revenue, a change Walla Walla and College Place officials say would reduce competition and encourage cooperation in recruiting retail businesses.
House Bill 2428, sponsored by Walla Walla Reps. Mark Klicker and Skyler Rude, would allow cities to enter voluntary agreements to share a portion of local government sales and use tax revenue.
The House voted unanimously Thursday to pass the proposal, sending it to the Senate.
Walla Walla City Manager Elizabeth Chamberlain and College Place City Administrator Mike Rizzitiello see the proposal as a way to eliminate competition for needed revenue between cities working toward a shared goal.
“It’s a way for the cities to have a targeted sort of recruitment of these types of businesses to the community that our residents keep telling us that they want,” Chamberlain said.
Sales tax is a main revenue source for the general fund, supporting government services, including police, fire, parks and recreation, library services and more.
“If we take the sales tax revenue out of the equation — that’s what all the cities want, we want those sales tax generators — this really takes that competition out of the equation, as well,” she said. “It allows (our) two cities to really work together for the betterment of our valley.”
Under the bill, cities and towns could enter agreements outlining the areas where the agreement applies, the amount or proportion of revenue to be shared and the method for sharing the revenue.
Walla Walla and College Place are considering employing the tool, should it pass, along the State Route 125 and Myra Road corridors, Chamberlain said.
The details have not been ironed out, but she said officials have talked about an agreement to share sales tax revenue for new commercial buildings over a certain square footage threshold — big box, higher sales tax-generating stores.
Residents have asked for more retail options in the annual Walla Walla resident satisfaction survey, and officials have looked at other tools for spurring and financing more development along those shared corridors.
Rizzitiello presented a map outlining College Place’s potential sales tax sharing areas to the Economic Development, Tourism and Events Commission on Monday, Feb. 5.
He said the change would allow the cities to recruit retailers together “because no matter where they go, essentially there’s a motive for both of us to get them into the Valley.”
Both Chamberlain, appearing in person, and Rizzitiello, participating online, testified in support of the bill at a hearing before the Local Government committee on Tuesday, Jan. 30.
Klicker said in a news release Thursday that the legislative change would help smaller cities across the state build infrastructure and attract new businesses.
“Although this is a simple bill on paper, it would have a huge impact for many towns and communities,” said Klicker. “By being able to share this vital revenue with each other, neighboring towns and cities would be able to do a lot more through their combined efforts than they can on their own.”
