Puyallup Considers Banked Property Tax Capacity to Address Budget Shortfalls

The article discusses the growing trend among Washington State cities, particularly Puyallup, to utilize banked property tax capacity as a financial strategy amid budget shortfalls. This mechanism allows local governments to increase property tax revenues without requiring voter approval, which is becoming increasingly attractive during tight fiscal times. Puyallup's recent decision to tap into its banked capacity will result in an average $3 monthly increase in property taxes for homeowners with properties valued at $491,000, starting in 2025. Experts note that while most taxing districts in Pierce County typically opt for the maximum allowable increase, banked capacity is more frequently used in other parts of the state. Candice Bock from the Association of Washington Cities highlights that cities are facing challenges due to rising expenditures and flat revenues, making banked capacity a potential solution.

The article also emphasizes that the impact on individual property taxes will depend on various factors, including overall property value assessments. Puyallup has been banking its property tax capacity since 2009 and currently has $3. 5 million in banked capacity, of which it plans to use $730,000 for the new public safety building. As financial pressures continue, cities may seek legislative changes to increase their tax levies beyond the current 1% cap.