(The Center Square) – Bellevue residents are set to see a 1% increase to their city-based tax for next year as a budget deficit approaches the city in 2024.
The City of Bellevue’s adopted 2023-2024 budget includes a 1% property tax adjustment in both 2023 and 2024. The city’s mid-biennium budget continues the adopted budget’s original plan by including the adjustment.
King County had previously established the city’s total assessed value for 2024 at $91.2 billion. That is a 7.2% decrease from $98.7 billion in 2022. According to a 2023-2024 mid-biennium budget update presented to the Bellevue City Council on Oct. 16, the city is looking to increase property taxes “as part of a strategy to avoid budget mishaps in the future.”
City staff will update the final assessed value information in January 2024 once the King County Assessor’s Office finalizes the property tax rolls.
A $1 million home in Bellevue pays $8,841 in total property taxes this year. For next year, that property owner is anticipated to pay approximately $9 more.
When splitting a Bellevue homeowner’s tax dollars, 33% would go to the state, 28% to the Bellevue School District, 19% to King County, 13% to the city itself, and 7% to other jurisdictions, including the Port of Seattle.
The city would receive roughly $1,100 from a $1 million property owner, according to estimates.
Despite increasing property taxes, Bellevue officials anticipate expenditures to outweigh revenues next year due to a loss of one-time funding the city relied on from the COVID-19 pandemic. The gap in expenditures and revenues is anticipated to widen further through 2028.
“That is a symptom of what I think many of us know at this point as the property tax structural imbalance of not being able to increase property taxes above the 1% as mandated by state law,” Bellevue City Budget Manage Evan Phillips said in the city council meeting on Oct. 16.
State law restricts the regular levy from growing at the least of a maximum of 1% annually or the rate of inflation. Inflation as defined as the increase in the implicit price deflator is set at 3.7% for 2024. It is anticipated to gradually cool to 2.5% in 2028, according to the presentation.
The city’s structural deficit is expected to be $1.6 million in 2024 and grow to $7 million by 2028
Bellevue residents have recently supported the city’s requests for more funding through taxes in order to fund community needs. In November 2022, voters approved an increase to the city’s regular levy for nine years by approximately 15 cents per $1,000 of assessed value to finance the acquisition, improvement and development of parks and recreation facilities.
A 5-cent per $1,000 of assessed value increase was also approved. Revenue from this levy goes towards maintenance and operations.
The council will hold a follow-up discussion on the mid-biennium budget on Nov. 13. The council is expected to adopt budget adjustments for 2024 by Nov. 20.