Puyallup council removes proposed 1% property tax increase, approves mid‑biennium adjustments and LTAC allocations

The Puyallup City Council on Oct. 21 voted to remove the budgeted 1% allowable increase to the city's 2026 property tax levy, approved first readings of mid‑biennium budget ordinances and passed lodging‑tax (LTAC) and community grant funding recommendations, with several members recusing or abstaining from votes where noted.

Finance director Barbara Lopez told the council the levy calculation starts with the 2025 levy and that the state allows a 1% addition, amounting in the draft to about $112,187. "The estimated levy at this point is $11,400,000," Lopez said, and she provided assessed valuation figures and examples for taxpayers: with an assessed valuation provided by Pierce County of about $10,900,000,000, the general levy rate would be roughly $1.046 per $1,000 of assessed valuation; the city's share is about 10.4% of a typical total tax bill.

Why it matters: the 1% increase goes to the city general fund and is discretionary rather than tied to a specific new program. Councilmember Dean Johnson moved an amendment to remove the 1% increase from the levy ordinance, saying he opposed the increase on principle given broader state tax changes and pressures on households. The council approved that amendment by voice vote and then approved first reading of the levy ordinance as amended.

Council discussion and budget detail: Lopez described the proposed 2026 mid‑biennium adjustments as largely technical and within previously presented parameters. Citywide revenues were listed at about $166.5 million and proposed total expenditures after adjustments rose from a previous adopted total near $157.4 million to about $169.5 million, reflecting a mix of routine personnel and operating changes, permanent funding for body‑worn and in‑car camera operations (previously covered by ARPA), and one‑time Tier 3 projects including an estimated $2.3 million in library HVAC and facility maintenance. Lopez said the city would transfer $3.5 million into Tier 3 funding and planned to expend $2.3 million from Tier 3 for one‑time projects, leaving a projected Tier 3 available balance around $6.2 million in 2026 (subject to final revenues and expenses).

LTAC and community grants: The council separated LTAC (lodging tax) and community grant votes from the main budget vote to avoid conflicts. Councilmembers disclosed recusals where applicable: Councilmember Dorr announced she would not participate in the LTAC vote because of an affiliation with the Puyallup Main Street Association; other recusals and abstentions were recorded in the meeting for specific grants. The council approved LTAC funding recommendations and community grant awards by voice votes after the council considered an amendment to the LTAC allocations.

LTAC amendment for WSU feasibility study: Council considered and approved an amendment to allocate up to $50,000 in LTAC funds as a 50/50 match with Washington State University (WSU) to study the feasibility, cost and potential economic impact of developing a conference facility on the WSU Puyallup campus using existing historic barns. Councilmember Dean Johnson moved the LTAC amendment and Councilmember Adler seconded; the council approved the amendment and the LTAC funding package. The motion specified the LTAC money would be a placeholder in 2026 and would only be used if WSU provided matching funds within the stated timeframe.

Votes and process notes: The council passed the LTAC and community grant packages and first readings of the budget ordinances after separating those votes to accommodate recusals. The council also approved first reading of the ordinance determining the amount of funds to be raised by regular property taxes for 2026 (as amended to remove the 1% allowance); second readings and final adoption of ordinances are scheduled for Nov. 18.

Context and next steps: Finance director Lopez said the second reading of the property tax and budget ordinances is set for Nov. 18, when the council will take final votes. The LTAC match to WSU is contingent on a WSU match and remains subject to the city's standard contracting and grant processes. Council members emphasized that the 1% levy removal reflected concern for households facing multiple tax or cost‑of‑living pressures and was not a reflection of the city's budget needs.

Ending note: Councilmembers requested continued monitoring of the Tier 3 project list and asked staff to return with final ordinance language and a resolution reflecting the amended levy figures at the Nov. 18 meeting.