Editors note: This letter was written to Ed Murray and Joe Zarelli, and representatives Ross Hunter and Gary Alexander:
On behalf of the Kent Chamber of Commerce, I am writing to request your support in retaining the streamlined sales tax (SST) mitigation policy as it currently exists. This issue has been a very critical one for Kent since the 2007 SST legislation and the full-mitigation agreement woven into that legislation (SSB 5089).
Kent’s SST mitigation payments comprise about $4.9 million a year toward the city’s general fund. Our community is very concerned about a 2012 Supplemental Operating Budget and bill proposal (BB 2146) by the governor that would result in a permanent 10 percent reduction to SST mitigation ($490,000/year negative impact).
With the SST, Kent made huge and fundamental changes to its whole system of crediting local sales taxes – in a way that would cause major revenue dislocations for a city that hosts a warehousing distribution and manufacturing center. At the time of passage of the bill, as approved and supported by the governor, the city was promised that our community would be fully mitigated for this significant rules change. A permanent 10 percent cut in that program will cost our community nearly half a million dollars a year. We have already lost the sales tax base to service our warehousing distribution area, and additional cuts would make it even harder to do the infrastructure work that needs to be done. That is a problem, not just for this community, but for the state – since the Green River Valley warehousing complex generates fully one-eighth of our state’s entire gross domestic product.
The SST mitigation program represents a strong commitment made by the state, for very good policy reasons. While we understand difficult decisions must be made to address the state’s budget deficit, the Kent Chamber urges you to keep your promise to the cities of Washington who entered into this agreement with the state. We respectfully request you to retain the SST mitigation policy as budget negotiations move forward.
Andrea Keikkala
Executive Director
Kent Chamber of Commerce
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