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City lobbyists say short 2026 session prioritized caution; $1.03 million secured for homeless day shelter
Summary
City contract lobbyists told the Bellingham council the 60‑day 2026 legislative session was constrained by fiscal caution but produced local wins, including $1,030,000 for a permanent homeless day shelter and new local revenue options; lobbyists flagged a 2028 "millionaire tax" that alters local sales tax rules.
City contract lobbyists briefed the Bellingham City Council committee of the whole on the 2026 state legislative session, saying the rapid, 60‑day process made big policy shifts difficult but yielded a mix of constraints and local wins. "I think we had a productive session despite a very fluid and quick legislative session," contract lobbyist Nick Federici said.
The lobbyists and planning staff highlighted several measures that will affect cities. Luke Eser said the legislature approved a new "millionaire tax" that takes effect Jan. 1, 2028, and begins bringing in revenue on July 1, 2029. Eser said the new tax repealed a recently enacted local sales tax option and that city staff and the Association of Washington Cities will work over the next two years to address the resulting gap in local sales tax revenue.
On housing, the council heard that House Bill 2266 (often described as a "STEP housing" or transitional‑housing bill) narrowed the types of local funds cities can require in operating agreements for supportive and emergency housing. Planning Director Blake Lyon said the city advocated to preserve local flexibility but that some limits remained in the final bill.
A second housing measure, Senate Bill 6026, requires cities to allow residential uses in land zoned commercial or mixed use and reduced some ground‑floor retail exceptions; Lyon said the bill’s final version settled on a rule tied to 40% of acreage zoned commercial or mixed use. The council also heard that Senate Bill 6002 placed new limits on automated license plate readers, including a 21‑day baseline retention period for most ALPR data and prohibitions on collecting ALPR data "on the premises or immediate surroundings" of certain sensitive sites; the policy also expanded offenses for which ALPR data may be used to include gross misdemeanors.
Eser and Federici pointed to an expansion of local revenue options in House Bill 2442 that allows some existing local sales tax uses to fund rehabilitation, operations and maintenance of existing affordable housing units and permits a new 0.1% local sales tax option to support children and family services.
The presentation included a notable local win: Eser said the city’s state delegation secured $1,030,000 for a permanent homeless day shelter in Bellingham. "It was a project that really met the moment," he said, and staff described the award as a match to local priorities.
Council members asked how some bills would affect ongoing city programs and contracts. Federici said technical questions from the Department of Revenue left the commercial‑vacancy proposals for further work in the interim; Allen Merida, the city attorney, said staff would need to review operational agreements to determine legal impacts. Lyon said he has discussed language with a bill sponsor and recommended staff follow up with case‑by‑case contract reviews.
The council did not take action on state legislation at the meeting; the briefing concluded with staff and the lobbyists offering to continue coordination with council leadership and the Association of Washington Cities ahead of the 2027 session.
