Yakima explores new and increased taxes ahead of expected deficit, mum on cuts

(The Center Square) – The city of Yakima is considering utility tax increases and additional revenue streams in order to balance the 2024 budget and avoid budget reductions. Some officials question whether residents, especially seniors, can handle more taxes.

Estimates from the city show year-end estimated revenue for 2023 is set at $73.5 million with expenditures at $75.8 million. This leaves an approximately $3.5 million budget gap for the city to address for next year.

The city council is exploring increases to its taxes on utilities in order to generate more revenue.

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At its Tuesdy study session, Yakima City Councilmember Patricia Byers voiced her concern for the city’s senior population in regards to increasing taxes, adding that “people are seeing increases across the board.”

The city council agenda for the study session stated that "additional revenue sources will need to be implemented or further budget reductions must be made." Yet councilmembers did not discuss the possibility of cuts being made in next year's budget during the meeting.

Water, wastewater and refuse rates would increase 5% to bring in a collective $11 million in 2024. For water and wastewater rates, 0.5% of revenue would be distributed to the city’s aquatic funding.

Stormwater rates would see a 10% increase dedicated to funding the city’s aquatic center project. In total, $589,217 in utility tax revenue would go towards the city’s aquatic fund next year.

At the city’s current tax rate for utilities, $9.8 million would be collected in 2024. If the city council passes the tax increases, it would increase to $12.6 million.

The city was also briefed on a potential 5% admissions tax, which is a tax added to the ticket price or other charge that attendees pay to enter an entertainment facility or a charge to participate in an entertainment activity.

Examples of admission taxes include cover charges, admission fees, golf and driving ranges, swimming pools, archery, shuffleboard, pool table, jukebox, picture machines, amusement rides, and other ball operating games, electronic games and darts.

Using the amount of sales for ticketed events in 2021 and 2022 inYakima, if there were an imposed tax for admission, the city would have generated approximately $88,000 in 2021 and $93,000 in 2022, according to a presentation to the Yakima City Council.

Lastly, the city is considering impact fees. However, as of Wednesday the city has not conducted research and analysis to obtains revenue estimates and fee schedules.

Impact fees are one-time charges assessed by a local government against a new development project to help pay for new or expanded public capital facilities that will directly address the increased demand for services created by that development, according to the city. Impact fees can only be imposed on public roads, parks, recreation facilities, school facilities, and fire protection facilities.

Yakima city councilmembers signaled that they want to further discuss the potential revenue streams and tax increases. Another study session is set for Oct. 24. The council is expected to adopt the 2024 budget and tax rates on Nov. 21.