City reports rising property tax revenue driven by new construction amidst sales tax concerns

Kennewick's City Council workshop on May 27, 2025, highlighted significant shifts in the city's revenue sources, particularly concerning sales and property taxes. Council members discussed the current trends, noting that while sales tax has traditionally been the largest revenue source, property tax revenues are showing notable growth.

During the meeting, it was revealed that property tax revenues increased by 4.12%, driven largely by new construction, which added approximately $186 million in assessed value to the city. In contrast, sales tax revenues saw a more modest increase of 83%. This trend raises questions about the future balance between these two critical revenue streams.

One council member expressed concern that if property tax revenues continue to rise, they could begin to close the gap with sales tax revenues, which have historically been the primary source of funding for municipal services. The council member emphasized the importance of understanding these trends, as they could signal changes in the community's economic landscape, particularly regarding retail jobs.

Additionally, the council discussed the impact of online sales on local tax revenues. It was confirmed that sales tax collected from online purchases, such as those from Amazon, is directed to Kennewick when products are delivered to local residents, ensuring that the city benefits from these transactions.

As the council continues to monitor these developments, the implications for Kennewick's financial future and community growth remain a focal point of discussion. The council's proactive approach to understanding these revenue trends will be crucial in shaping policies that support sustainable economic development in the city.