Staff urges Olympia council to raise sales tax to 9.9% to boost public safety funds
The Olympia City Council may vote on a proposal to raise the city’s sales and use tax rate from 9.8% to 9.9% in an effort to raise more funds for public safety. It may also choose to pursue grant funding to hire more police officers.
Finance Director Mike Githens walked the council through the plan during a study session last week.
He said House Bill 2015, which was enacted by the legislature this year, gave cities and counties the authority to raise their sales tax to support public safety with a vote of the council or board.
Githens said the new public safety sales tax is 0.1% or $1 per $1,000 taxable purchase.
The current sales and use tax rate in Olympia is 9.8%, or $98 for every $1,000. Githens said the revenue is shared by the state, city, Thurston County and other local jurisdictions. Olympia receives about 13%, while the state receives about 66% and the county and other jurisdictions receive the rest.
If enacted, the extra 0.1% would solely go to Olympia. Githens said these funds could be distributed however needed, for broad public safety and criminal justice needs. City Manager Jay Burney said the sales and use tax can be used to hire police, but it can also be used for fire, alternative services, homeless response, and more.
Githens said the tax would be permanent if enacted, and would become effective Jan. 1, 2026. The extra 0.1% sales and use tax would bring in an additional $2.6 million next year.
Githens said the city could also choose to seek funding through a new, three-year, $100 million public safety grant program. The program is specifically meant for hiring, retaining and training new police officers and co-responders.
Burney said the grant program allows the city to offset the cost of hiring an officer for a period of three years, up to $125,000 per officer for over a three-year period. That’s $375,000 per new officer.
Burney said the city isn’t eligible for the grant if it doesn’t take advantage of the council-approved sales tax increase. One has to come before the other, he said.
He said there’s also criteria the city has to meet through the state Criminal Justice Training Commission to qualify. He said it has to do with the training OPD is involved in and whether its officers are meeting new state standards and laws around de-escalation.
Burney said he wants to meet with the fire and police chiefs, as well as the city’s homeless response teams, to find out where there are gaps and where more funding is needed.
Githens said he plans to come back to the council with more data, but a decision needs to be made quickly if the new sales tax is to be enacted by Jan. 1. The council has to pass an ordinance before Oct. 18 for that to happen.
If the council misses that date, the new sales tax effective date would be April 1, and it would bring in half as much money as forecast.
Githens said in order for the council to balance its upcoming budget, it needs to take the new public safety revenue options seriously.
Mayor Pro Tem Yến Huỳn asked how much Olympia could reasonably receive from the three-year $100 million grant program. Githens said it’s on a first-come, first-served basis.
He said the program expires in June 2028. The funds would cover about 75% of a new officer’s salary and help cover training costs. The city would then pay the remaining 25%.
Githens said the city would put in a request for however many officers or co-responders it would want to fund with the grant.
The city would also have to have received funds or authorized at least one of three public safety sales taxes. Olympia has imposed two taxes, the Criminal Justice Sales Tax and the Public Safety Sales Tax.
Burney said the OPD currently has 18 vacancies. He said about nine positions would qualify for the grant. Depending on timing, he’d like to have some of those positions filled in the next 30 days, then get the rest filled with the help of the grant money.
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