2024 Levy Lid Lift Special Election

At the January 11 city council study session, Finance Director Dave Rodenbach provided the city council with a look into the financial future of the city’s General Fund. The General Fund is the source of revenue that the city relies on to provide basic services like police, street maintenance, and park and building operations. Starting in 2025, the city is looking at a $2 million annual shortfall in the revenue it needs to provide these services at current levels. This shortfall exists even with $1.4 million in general funded positions the city has already frozen throughout the organization in 2023. 

Staff asked council to consider several options to address this shortfall. General Fund revenues come primarily from property taxes, sales taxes, and other fees collected by the city, which limits the options available to us. What immediately stands out is that property taxes have not been keeping up with the rest of the revenue the city collects. While the city’s population has grown 65% over the past ten years, property tax revenue has only grown 8%, after adjusting for inflation. Needless to say, this population growth has significantly increased demand for services and the city is now facing a point where revenue is not able to keep up with expenses. 

The voters of Gig Harbor have not been asked to “lift the lid” on property taxes since the 1980s. As a result, the contributions received from property owners has receded significantly. Ten years ago, the city’s portion of the property tax rate was $1.40 for every $1,000 in assessed value. Today, it has shrunk to half that amount ($0.70/$1,000). 

Seeing this, council has directed staff to prepare a ballot measure to effectively restore the property tax rate in Gig Harbor back up to $1.10 per $1,000 in assessed value. This proposition will be placed on the ballot for a special election on April 23, when Gig Harbor voters will decide whether or not to adopt the property tax increase. 

Questions and comments should be sent to mayorandcouncil@gigharborwa.gov