Olympia lobbyist outlines proposed state legislation for local funding 

Olympia's contract lobbyist, Nick Frederici, presented legislative proposals aimed at providing local governments with flexibility in raising funds and innovative revenue-generation strategies for housing, public safety and community resources.  

At a meeting on Tuesday, March 25, Frederici updated the city council members on the 2025 Washington legislative session. State lawmakers are working to pass policy and fiscal bills by mid-April with an aim to conclude the session by April 27.  

Frederici said the legislators are facing the task of addressing $16 billion in operating budget and $8 billion in transportation budget deficits by exploring multiple revenue options to bridge financial gaps.  

Flexibility in raising funds 

According to Frederici, there are two bills that seek to modify the current restrictive 1% property tax cap.  

Sponsored by Rep. Steve Bergquist (D-11), House Bill 2019 would modify the state and local property tax authority and adjust the school funding formula. The bill maintains the 1% cap on property tax growth, but allows for increases based on inflation and population changes, not to exceed 3%.  

Sen. Jamie Pedersen's (D-43) Senate Bill 5798, which is co-sponsored by Sen. Jessica Bateman, would raise the state property tax cap to 3%, and allow local governments to increase property taxes based on population growth and inflations.

The proposal provides local jurisdictions with the option to take a lower growth rate if they choose, and includes a property tax exemption for seniors and disabled residents.  

The Association of Washington Cities is pushing for legislative changes that would allow property tax rates to increase up to 3% based on inflation and population growth.

The proposal would give city officials more flexibility to fund critical services like police, fire protection and street maintenance to address rising costs while providing local control over municipal budgets.  

Housing resources 

Two bills aim to create new tools and revenue streams to boost affordable housing supply. The proposals would explore funding options like real estate transfer taxes to support diverse housing needs, including pathways for homeownership, senior housing, workforce housing and permanent supportive housing. 

Through House Bill 2027 from Rep. April Berg (D-44), who chairs the House Finance Committee, the bill proposes allowing local jurisdictions an additional 0.5% real estate excise tax (REET) dedicated to housing resources.  

House Bill 1858 by Rep. Shaun (D-43) targets document recording fees. The proposed legislation would close a 2001 exemption that allowed bank-to-bank transactions to avoid recording fees.

By bringing these internal transactions "on the books," Frederici said the bill could generate tens of millions in additional annual revenue to state, county and local levels for housing resources.  

Public safety and community resources 

Frederici explained that House Bill 2015 offers a comprehensive approach to public safety funding:  

• Provides state funding for recruitment and retention of new police officers .

• Allows a 0.1% sales tax option. 

• Expands the definition of public safety to include behavioral health, co-responder programs and diversion services. 

Olympia City Manager Jay Burney said HB 2015 combines a grant program with a 0.1% sales tax option, requiring cities to first utilize grants before accessing the ongoing sales tax revenue.  

Burney added the legislation includes a provision mandating that cities be current on state-required public safety training to qualify for funding, ensuring accountability and professional development in law enforcement.  

Senate Bill 5775 would allow cities to impose up to a 0.3% public safety sales and use tax, with the combined county and city rate not exceeding 0.3%. It would provide local governments use revenue from the public safety and criminal justice sales taxes.