2013–2014 BIENNIAL BUDGET - the City of Tukwila

2013-2014 Biennial Budget City of Tukwila, WashingtonProperty TaxesProperty tax revenue is limited to a 1% annual increase plus taxes generated by new constructionand annexations. Growth of 3.7% is projected for 2014 due to a potential annexation. The 2.5%growth estimate for 2015-2018 is based on projected growth in new construction and tenantimprovements.Utility TaxesA utility tax was approved beginning in 2003 at an initial rate of 4%, increased to 5%, and to 6%in 2007. The tax applies to electric, natural gas, and communications sales. In 2009, Counciladopted a 6% utility tax on solid waste collection in the City. The 2013 budget reflects increasedutility taxes derived from fee increases on natural gas and electricity usage. Utility taxes areprojected to increase over the 2015-2018 period at a rate of 3%.Revenue Generating Regulatory License (RGRL)The RGRL was established as part of the City’s 2010 plan to stabilize finances due to revenue lossresulting from unfavorable economic conditions and other factors. It is assessed on businessesbased on the number of full time equivalent employees in Tukwila. The biennial budgetestimate for this fee is based on actual 2011 and 2012 fees collected and projections foremployment increases. The RGRL is projected to grow at a rate of 2.5% per year over the 2015-2018 period due to new business and increased employment in the Tukwila area.One-time RevenuesIncludes real property sales and cost reimbursement through Local Improvement District (LID)bonding for the Tukwila Access Project. The 2016 one-time revenue item represents the projectedsale of certain urban renewal holdings.Interfund Utility TaxesA 15% utility tax on revenues from City owned utilities was established in 2009 to provide fundsfor flood mitigation measures when the structural integrity of the Howard Hanson Dam wasimpaired. On May 1, 2010, the tax was reduced to 10%. The tax is scheduled to expire onDecember 31, 2015. It is included in the Attachment A through 2018 to reflect financial resultsshould the tax term be extended.Gambling TaxesThe gambling tax revenue category comprises gambling and leasehold taxes. Historically,gambling taxes have constituted 91% to 96% of the category. Certain gambling taxes due in 2011are being collected over a 12 month period with 8 payments occurring in 2012 and the remaining4 payments occurring in 2013. Also, it is anticipated that back taxes from another establishmentwill be collected in 2014; the 2014 budget has been increased accordingly. The gambling industryhas experienced challenges recently; as such the revenue projections reflect a minimal 1% growthrate over the plan period.Page 350