Issaquah reviews first-quarter budget outlook; state OKs $1.4M for bomb-cyclone recovery, council to consider public-safety tax

The Issaquah Committee of the Whole received a first-quarter financial and legislative update on April 28 and directed staff to continue evaluating potential new revenue tools and budget priorities as the council prepares for a July retreat.

Deputy City Administrator Andrea Snyder told council members that year-end 2024 figures are unaudited but show revenues below the revised budget and that the city closed 2024 with lower receipts than forecast, reinforcing the administration’s conservative revenue assumptions for the 2025–26 biennial budget.

Why it matters: Snyder warned that continued uncertainty in federal grants, regional transportation funding and the broader economy could constrain capital and operating plans and increase pressure on reserves.

Key legislative and budget takeaways Snyder reported:

- State assistance for bomb cyclone: the Legislature approved $1,400,000 to help cover the city’s bomb-cyclone recovery costs. Snyder said the award reduces the city’s projected $3.8 million in damages but does not eliminate the gap.

- Other appropriations: $3,000,000 was reappropriated for the Issaquah Opportunity Center, and the Legislature added funding for PFAS mitigation (a $2,000,000 reappropriation plus an additional $2,000,000). Snyder also said an $88,000 award for biometric monitoring for incarcerated persons was on the way and that a $100,000 grant for Creeks to Peaks was approved. A requested $2.7 million for a digital permitting upgrade (eCityGov Alliance) was not funded.

- Changes affecting local planning: the Legislature clarified the definition of “major transit stop” and increased flexibility in use of real-estate excise tax (REET) proceeds; state-level preemption on parking minimums also passed, which will require local code revisions and likely staff time to implement over the coming years.

- New public-safety sales tax: the Legislature authorized cities to impose a 0.1 percent public-safety sales tax and created a related state grant program. Snyder said the tax could generate roughly in the low millions annually for Issaquah and that eligibility for state grant funds will require meeting specified training and certification criteria; the city would need to evaluate program requirements and permissible uses.

Snyder walked council through preliminary fiscal figures: adopted revenues for the budget cycle were about $64.5 million; actual 2024 revenues came in roughly $2–2.5 million below the revised budget forecast, she said. Expenditures were lower than revised forecast as the city reduced spending in late 2024; unaudited actual expenditures were closer to the adopted budget level (the administration reported about $69 million in actual expenditures for 2024). Snyder emphasized the city used reserves intentionally in 2024 under council direction but that continuing to spend ahead of revenues is not sustainable.

Council feedback and next steps

Councilmembers broadly urged caution about adding ongoing operating costs mid-biennium given revenue uncertainty and the recent recovery expenses. Multiple councilmembers signaled interest in exploring the new public-safety sales tax as an additional revenue option but raised questions about limitations on eligible uses and the tax’s regressivity.

Deputy Council President DeMichele and others highlighted interest in allocating some public-safety sales-tax proceeds to behavioral-health responses and the city’s community court, subject to program rules. Councilmember Mertz urged administration to pursue less-regressive options where possible. Several members recommended that the city prioritize resilience-hub and emergency-management needs in upcoming capital and operating planning.

Snyder said administration will continue monitoring revenues and federal/state grant changes, prepare additional data for the July 12 council retreat and analyze revenue options — including a public-safety sales tax and possible voter-approved levies — as requested by council.

No ordinance, tax or appropriation was adopted at the April 28 meeting; the item was informational and council asked staff to return with further analysis.

(Unaudited figures reported by staff.)