Kenmore council repeals utility tax relief program

The program does not affect the city budget.

At its Sept. 9 meeting, the Kenmore City Council voted to approve an ordinance that repeals a section of the Kenmore municipal code that is centered on a utility tax relief program that was initially put into motion in 1998. The program does not affect the city budget.

Council had previously been briefed on the subject at its July 22 meeting, after which it directed city staff to prepare the ultimate ordinance, No. 19-0495, with two considerations. The first consideration entailed that in the interim the city inform residents of other existing low-income assistance programs offered by entities including Comcast, Frontier, CenturyLink and others. The second called for a revised utility tax relief program to be brought before council in the future if an increase in utility tax was proposed.

No. 19-0495 has precedence in No. 00-0084, an ordinance adopted by the city in 2000. The latter amended the 1998 incarnation of a utility tax relief program to alleviate families and low-income residents from higher utility taxes on natural gas and electricity.

As the ordinance previously stood, residents whose income was less than 125 percent of the federal government’s established poverty level could submit to the city clerk documentation that would be passed to the relevant billing agency. This would culminate in a discount on the utility tax bill for the resident in question.

The discount only affects electricity and natural gas, both of which in Kenmore are currently provided by Puget Sound Energy (PSE).

The program is being repealed in part because the utility tax on natural gas and electricity in Kenmore has decreased since the passage of the 2000 ordinance, and since, due to differing PSE policies and not enough staff on Kenmore’s part to process applications, it has been unable to be administered.

According to a letter to the city manager included in the Sept. 9 meeting agenda, “as currently written the program is not used and would most likely not work well if the city attempted to implement it. An individual could walk into City Hall today and request this relief and the city would not be able to deliver because PSE would not know how — or may not want to — cooperate with us.”

In order to effectively function, the program, according to the document, would need to update its federal poverty guidelines criteria, craft a more thorough eligibility documentation list, make an upgraded application form, plan an up-to-date process through which the PSE could administer the discount, an application time table and staff resources.

The program, as noted in the letter, was enacted in 2000 shortly after a utility tax raise. But since 2004, the electric and utility tax saw a decrease and has remained at four percent since.

Currently, the electric and gas services tax in the city is levied at four percent. With cell service and telecommunication tax included, which comes to six percent, the total utility tax for the 2019-20 biennium budget is slated to accrue about $2.97 million of its revenue. It is projected to bring in about 10 percent of the general fund revenue.

For more information about the recent council’s decision, go to the Sept. 9 meeting agenda.