State Legislature considers raising property tax cap to 3% for budget improvement

The Tacoma Government Performance and Finance Committee meeting on April 15, 2025, focused on the potential impact of proposed changes to property tax regulations. A key discussion centered around a legislative policy that could allow Tacoma to increase its property tax cap from the current 1% to 3% annually.

Committee members examined how this change could affect the city’s budget and revenue. According to the analysis presented, if the policy is implemented, Tacoma could see an increase in property tax revenue of approximately $1.5 to $2 million in 2026. This increase would grow over time, potentially reaching around $33 million by 2030.

While the immediate financial benefits may be limited, the long-term implications of the proposed increase could significantly bolster the city’s revenue. The discussion highlighted the gradual nature of this potential growth, emphasizing that while the short-term gains are modest, the long-term financial health of Tacoma could improve substantially.

The committee plans to continue monitoring the legislative developments regarding property tax caps and their implications for the city’s budget. This ongoing evaluation will be crucial as Tacoma seeks to enhance its financial stability and service delivery in the coming years.