Sales tax rate to remain unchanged in Lacey

The City of Lacey's 9.7% sales tax rate will remain unchanged as the city council seeks state-level fixes before pursuing public safety funding tools. 

The Lacey City Council examined the issue at a work session on Tuesday, Jan. 27. City officials confirmed more than 25 agencies statewide, including Thurston County, received noncompliance letters from the Criminal Justice Training Commission (CJTC) under House Bill 2015. 

HB 2015, passed in 2025, created two public safety funding options. One is a 0.1% sales tax that cities can impose by council vote through June 2028. The other is a three-year, $100 million grant program for hiring new police officers. 

Both tools require agencies to meet 10 policy and training categories verified by the training commission. 

Mayor Andy Ryder said pursuing the funding tools before compliance issues are resolved would be premature. He urged coordination with state lawmakers and the Washington State Office of the Attorney General to address administrative barriers first. 

Lacey Police Department Chief Robert Almada said the department meets seven of 10 required categories, but estimates achieving full compliance would take approximately 1,000 staff hours. 

"We run a very lean, lightly staffed (Lacey) Police Department," said Almada, adding compliance work would pull officers from other required duties. 

Almada said even if the funding were secured, it would only sustain existing service levels. 

"It doesn't increase public safety. It just gets us back to where we are right now," said Almada, noting the department ideally needs 10 additional officers to meet state staffing standards. 

Budget pressure 

Assistant City Manager Shannon Kelley-Fong said without new revenue, Lacey's general fund faces approximately $1.5 million in additional costs by 2027. 

The city is looking at an estimated $1.2 million in new annual expenses from state public defense mandates requiring reduced caseloads from 400 to 120 cases per public defender over 10 years. 

Additionally, court service costs may rise significantly when the current Thurston County District Court contract expires after 2026. By comparison, the City of Olympia pays approximately $2.5 million annually for comparable services. 

Existing public safety programs funded by Proposition 1, the 2023 voter-approved sales tax, already require a $317,371 general fund subsidy in 2026. 

City officials estimate a proposed 0.1% sales tax would generate approximately $1.86 million annually. 

City Manager Rick Walk said staff is going to pursue administrative fixes at the state level alongside the Association of Washington Cities and Association of Washington Counties. 

The council may reconsider the funding tools if compliance barriers are resolved. After June 30, 2028, any increase in the local sales tax would require voter approval.