Title
Sales Tax for Public Safety Grant Program (House Bill 2015) Discussion
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Discuss the Sales Tax for Public Safety Grant Program (HB 2015).
Report
Issue:
Whether to discuss the Sales Tax for Public Safety Grant Program (HB-2015).
Staff Contact:
Mike Githens, Finance Director, 360.753.8465
Presenter(s):
Jay Burney, City Manager
Mike Githens, Finance Director
Background and Analysis:
In 2025, the Legislature passed HB-2015 creating two new pathways for cities to fund public safety in their communities. The law became effective on July 27, 2025.
The new law sets up two mechanisms for funding public safety:
1. A three-year $100 million grant program for hiring, retaining, and training new police officers and co-responders; and
2. A councilmanic 0.1% local sales tax authority for broad public safety and criminal justice needs.
The two new funding tools are separate from one another. However, there are policy and training requirements that cities and their police departments must meet to be eligible for the grant and sales tax. A city council can implement the sales tax without applying for or receiving grant money. But a jurisdiction must meet requirements of the grant in order to impose the new tax.
Similarly, in order to receive grant money, a city needs to have received funds or authorized at least one of three public safety sales taxes (two existing and/or the new one created in HB-2015). The City of Olympia has imposed the existing sales tax options; Criminal Justice Sales Tax and Public Safety Sales Tax.
The HB 2015 allows the legislative body of a city (or county) to establish a new local option sales and use tax.
In order for the new sales tax to become effective by January 1, 2026, the City must pass the ordinance before October 18, 2025. Otherwise, the new sales tax effective date will be April 1, 2026 and the estimated financial impact in 2026 will be approximately $1.3 M lower than shown below.
Climate Analysis:
This agenda item is expected to result in no impact to greenhouse gas emissions.
Equity Analysis:
Sales taxes are considered regressive because they apply uniformly to most necessary household expenditures. A higher sales tax may burden lower-income households who already spend a larger portion of their income on such purchases.
Neighborhood/Community Interests (if known):
Members of the community may have an interest in this agenda item as it deals with City finances and fiscal governance.
Financial Impact:
Assuming a 1/1/2026 effective date, it is estimated the new sales and use tax will result in $2.6 M of additional revenue in 2026, and approximately $3.2 M (+/- forecast % in future years).
Options:
1. Discuss the Sales Tax for Public Safety Grant Program (HB-2015).
2. Do not discuss the Sales Tax for Public Safety Grant Program (HB-2015).
3. Reschedule the discussion to another meeting.
Attachments:
None