If you would like to learn more about Town finances and a potential levy, join us at an upcoming Coffee with the Mayor. Click here to view the Town's calendar!
Message from Mayor Quinn
Over the years, it has become common in my messages about the Town's budget for me to highlight the precarious nature of the Town’s finances. Specifically, I have repeated my serious concerns about the long-term structural deficit that the Town must endure because of state limitations on the Town’s property tax revenue. This situation is not unique to Woodway—most cities in Washington are faced with a similar challenge.
Attempts to address this structural deficit by reducing expenses and service levels, as some might suggest, have been frustrated by the very limited nature of the Town’s staffing and services. Public safety expenses consume almost 60% of the Town’s operating budget revenue. The impact of a high inflationary environment has created additional challenges.
Revenue
Town property owners currently pay the Town approximately 16% of their total property tax bill.
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$6.88 per $1,000 in assessed value |
Total property tax rate (includes State, County, Schools, Sound Transit, and a couple other taxing districts) |
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$1.11 per $1,000 in assessed value |
Town’s property tax rate (which pays for police, fire, courts, jails, prosecution, emergency medical services, parks, public works, permitting, and a lot of state mandates). |
The percentage of property taxes paid by our residents that stays in Woodway has declined by almost a third since 2010.
The amount of money that the Town collects in property tax revenue can grow by 1% a year (plus the value of new construction). This dollar limitation is fixed, even if property values increase by more than 1%. As a result, the Town collects about $12,000 more in property tax each year.
Deficit
While, as shown above, the Town collects approximately $12,000 more in property tax each year, the Town’s police and fire contracts alone grow by more than $30,000 a year. This increase does not include increases in other expenses, such as wages and benefits, property and liability insurance, utilities, and fuel. The Town has relied on its reserves, a tax on water & sewer utilities, and state & federal grants to maintain service levels. These actions, however, have simply kicked the can down the road and largely masked the underlying growth in the annual deficit.
Over the years, we have reported that our ability to continue this patchwork form of paying for Town services is coming to an end. Now, we are here.
Potential Ballot Measure
Town residents last approved a property tax levy increase to address this structural deficit in 2009. Property values and the cost to provide mandatory and essential services have increased dramatically since then. Because we have delayed incremental, annual increases for so long, the Town’s average annual deficit over the next six years is approximately $600,000. We cannot solve this problem through budget cuts without a significant effect on public safety.
The Town Council and I have made it a priority this year to develop a strategy to address the Town’s deteriorating financial condition. Addressing this deficit will result in a proposal that will be an increase in the Town’s property tax levy. However, because the Town’s levy is only 16% of your total property tax bill and any proposal will likely be an increase over a six-year period, the annual increase will be a relatively small percentage of your total property tax bill.
Getting the Word Out
Communication on this complex and consequential topic is difficult. No one wants to pay more in taxes, and many have not given much thought to the details of the Town’s finances or the limits the State places on all municipalities when it comes to paying for services their residents may desire. We’re asking that you take a moment to learn about these details and the challenges they create for the Town. Then, we’re asking that you help us reach as many residents as possible to educate everyone on what it takes to keep Woodway independent and special for all of us.
We intend to host public meetings inviting all residents to learn more about Town operations, finances, and a possible levy. Of course, we will hold meetings at Town Hall, but please consider hosting a small meeting with your neighbors. This is a great way to get your questions answered and hear your neighbors' concerns. Town staff is happy to attend, and this kind of participation would be very valuable. Just send an email with the subject “Willing to Host” to mayor@townofwoodway.com.
Resources
April 20, 2024 community meeting presentation - Public Safety
April 20, 2024 community meeting presentation - Town Finances