City opens public hearing on revenue sources as it prepares 2026 property tax levy

The Port Orchard City Council opened a public hearing on property-tax revenues Wednesday after Finance Director Noah Crocker reviewed the city’s revenue mix for the 2025–26 biennial budget and previewed the proposed levy amount for 2026.

Crocker told the council the city’s three main tax sources are sales tax, property tax and “other taxes,” with sales tax representing roughly 49% of tax revenue for the biennium, property tax about 25% and other taxes the remaining 24%. He said the city had received about 43% of biennial revenue year to date and that sales‑tax receipts were trending slightly above the adopted budget but were about 3% lower than the same period in 2024.

On property tax, Crocker said Washington’s budget‑based levy system requires cities to set a levy amount that the county converts to a rate. The city’s proposed 2026 levy was $4,263,000, he said, noting the city has hit its levy cap and would not increase levy revenue by the statutory 1% — the levy change would be 0% for the base rate; new construction and allowable adjustments account for additional levyable dollars.

Crocker said staff will return at subsequent meetings to take public comment on the full budget (expenditures) and that the council would set the levy before the November 30 certification deadline.

Why it matters: Property tax and sales‑tax performance determine how the city funds services and capital projects in the biennium. Crocker framed the presentation as required under RCW 84.55.120 and said the hearing is a statutory step prior to levy certification.

Next steps: The council left the public hearing open for one person online and scheduled follow‑up budget hearings and a work study to discuss expenditures before adopting a final levy and budget.