FOR IMMEDIATE RELEASE
Mayor Wright and City Administrator Combs Join Governor for Signing of Landmark House Bill 1791, Expanding Flexibility of City Funds
Mayor Ronnie Wright and City Administrator Sabrina Combs were invited to join Representative Dave Paul in Olympia for the signing of House Bill 1791 by the Governor. Following the 2025 City Council Legislative Priorities, the Mayor instructed Deputy City Administrator David Goldman to work closely with Representative Dave Paul with drafting and advocating for this bill during this legislative session.
House Bill 1791 is a big deal for cities and one that had bi-partisan support during the legislative session. It was also supported and championed by the Association of Washington Cities. This bill increases the flexibility of monies that cities already collect so that they can better respond to the needs of their residents without needing to increase taxes. One example of how this works is by doubling the available funding that can be used for City facility projects including public safety facilities. It will also enhance the City’s ability to obtain grants and other outside funding by leveraging these funds as the local matching requirements on these projects.
In Washington State, REET 1 and REET 2 refer to two components of the Real Estate Excise Tax (REET), which is levied on the sale of real property. The key differences between the two are the rates, purposes, and how the revenue generated can be used by local governments. All cities and counties in Washington are authorized to levy REET 1, and nearly all do. REET 2 has been more restrictive than REET 1 in terms of how funds could be spent, focusing primarily on transportation and utility infrastructure. Only cities and counties that plan under the state’s Growth Management Act are authorized to levy REET 2. Many cities have been reluctant to use REET 2 funds because the reporting requirement is overly burdensome.
HB 1791, the Real Estate Excise Tax (REET) Flexibility Bill removes the redundant bureaucratic red tape; aligns allowable uses of REET 1 and REET 2; allows the use of available funds for maintenance, operation and service support for existing capital projects; and allows REET to also be used for homelessness facilities and affordable housing projects.
REET funds are monies that the City already collects and with more flexibility to use it, the better the City can respond to the needs of its residents. The new law allows funding for public safety and other facilities. As an example, it would allow the City to double the amount of REET funds available for a potential new police station without having to raise any new taxes or fees. It will also enhance the City’s ability to obtain grants and other outside funding by leveraging the REET funds as the local matching requirements.
The amount of REET funds the City receives annually is based on real property sale transactions within City limits and varies from year to year.
For further information, please see video of signing starting about minute 10:30.
https://tvw.org/video/governor-bob-ferguson-bill-signing-2025041370/?eventID=2025041370
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For more information, contact Communications Officer, Magi Aguilar at maguilar@oakharbor.org