WashingtonWashington law lets local governments use tax growth for public projects
Washington law allows local governments to use property tax revenue from rising values for public projects, after project review and public hearings.
What it does
Local governments may use property tax revenue from rising values in an area to help pay for listed public projects, including infrastructure, affordable housing, and child care facilities.
Before creating an increment area, local governments must study the project, notify affected taxing districts, and hold at least two public hearings.
Residents of affected areas must be able to see annual reports on project progress, economic effects, mitigation, and impacts on local tax revenue and rates.
Argument forLocal governments could use tax growth to help pay for roads, transit, affordable housing, and child care facilities.
Argument againstTaxing districts could have less property tax revenue available for services while a local government uses part of the tax growth to pay for public projects.
More detail
Local governments may use property tax revenue from rising property values in an area to pay eligible project costs. Eligible projects include public infrastructure and certain housing, child care, safety, and other listed improvements. A local government must adopt an ordinance that identifies the area and the public improvements it plans to pay for. The local government may receive only what is needed for eligible project costs, and some property tax receipts are excluded. Tax revenue is allocated starting in the calendar year after the area takes effect, and allocation must end by the sunset date in the ordinance.
Before creating an increment area, a local government must analyze the project, notify affected taxing districts, hold public hearings, and consider the state treasurer's comments. These steps apply to a local government considering an increment area and the taxing districts affected by it. The project analysis must list planned improvements and estimate effects on taxing districts, including revenue impacts and any needed mitigation. The local government must hold at least two public hearings after it submits the analysis to the treasurer and affected local governments and taxing districts. The local government must notify affected taxing districts at least 180 days before submitting the project analysis to the state treasurer.
Local governments must prepare and make an annual report available to residents of affected taxing jurisdictions. The report must be available to residents of all taxing jurisdictions affected by the increment area. The report must cover project progress, economic effects, mitigation, and impacts on affected districts' tax revenue and rates. The local government must ask affected taxing districts for statements and include any they provide. The report is annual; the text does not state when the first report is due.
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Where it stands
- Introduced
- Passed House
- Passed Senate
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Mar 23Effective date 6/2/2026.Latest
- Mar 23Chapter 141, 2026 Laws.Major
- Mar 23Governor Bob Ferguson signed.Became Law
- Mar 10Delivered to Governor.To Governor
- Mar 9President signed.Passed Senate
- Mar 6Speaker signed.Passed House
- Mar 5Third reading, passed; yeas, 48; nays, 1; absent, 0; excused, 0.Minor
- Vote recorded 3rd Reading & Final Passage (#6). Result: pass.Upper
- Mar 5Rules suspended. Placed on Third Reading.Minor
- Mar 3Placed on second reading by Rules Committee.Minor
- Mar 2Passed to Rules Committee for second reading.
- Mar 2Minority; without recommendation.Minor
- Mar 2WM - Majority; do pass.Minor
- Mar 2Executive action taken in the Senate Committee on Ways & Means at 10:30 AM.
- Feb 26Public hearing in the Senate Committee on Ways & Means at 1:30 PM.
- Feb 24Referred to Ways & Means.Minor
- Feb 23And refer to Ways & Means.Minor
- Feb 23LGV - Majority; do pass.Minor
- Feb 23Executive action taken in the Senate Committee on Local Government at 1:30 PM.
- Feb 19Public hearing in the Senate Committee on Local Government at 1:30 PM.
- Feb 17First reading, referred to Local Government.Minor
- Feb 13Third reading, passed; yeas, 93; nays, 1; absent, 0; excused, 4.Minor
- Vote recorded 3rd Reading & Final Passage (#30). Result: pass.Lower
- Feb 13Rules suspended. Placed on Third Reading.Minor
- Feb 13Floor amendment(s) adopted.
- Feb 132nd substitute bill substituted (FIN 26).Major
- Feb 12Rules Committee relieved of further consideration. Placed on second reading.Minor
- Feb 9Referred to Rules 2 Review.Minor
- Feb 9Minority; without recommendation.Minor
- Feb 9FIN - Majority; 2nd substitute bill be substituted, do pass.Major
- Feb 9Executive action taken in the House Committee on Finance at 8:00 AM.
- Feb 6Public hearing in the House Committee on Finance at 8:00 AM.
- Feb 3Referred to Finance.Minor
- Jan 30LG - Majority; 1st substitute bill be substituted, do pass.Major
- Jan 30Executive action taken in the House Committee on Local Government at 10:30 AM.
- Jan 27Public hearing in the House Committee on Local Government at 10:30 AM.
- Jan 13First reading, referred to Local Government.Introduced
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