Council rejects homeless tax

By a 4-3 vote, the Shelton City Council on Tuesday evening rejected passing a sales tax increase of 0.01% on taxable goods in the city, designed to collect about $310,000 per year to help house the homeless and provide them services.

Mayor Eric Onisko and council members Tom Gilmore and Miguel Guttierez voted for the tax. Deputy Mayor Sharon Schirman and council members Melissa Stearns, Lyndsey Sapp and George Blush voted against it.

Eleven residents stepped up to the microphone during the public hearing — six of them said they favored the tax and five said they opposed it.

City Manager Mark Ziegler provided some

context to the proposal before the discussion began in the packed chamber at the Shelton Civic Center.

In 2022, the city established a limited term Homelessness Task Force that met seven times to discuss the effects of homelessness on people and the resulting effects on the community. In November 2022, the task force offered seven recommendations, which included a short-term mitigation site of one year, support for grant applications for current shelters, support for grant applications for community partners to provide rapid re-housing, the hiring of designated crisis responders embedded with Shelton Police, storage lockers located at a mitigation site, public dashboards on the city website that detail what shelter beds are available, and support for affordable housing.

At a June 11 study session, the majority of the council members directed staff “to bring funding alternatives to expand affordable housing options for further consideration,” the city report states. On Oct. 8, a majority of the council agreed to consider a housing and related services sales tax at a future council meeting.

In the tax proposal, the city writes “the projected tax revenue of $310,000 per year isn’t — on its own — immediately sufficient to construct or operate the housing and/or facilities contemplated by the state law, but the City could potentially save the funds for several years or leverage 50% of these funds to obligate debt to construct such facility more immediately. For example, a 10-year loan could design and build up to a $1.5 million project, but then the City would still have to seek additional funds or partners for management and operation.” The city notes the tax would not include most grocery items.

The city report states at least 60% of the amount, or $186,000, would be spent to help house people who make less than 60% of the area median household income, or about $60,000 in 2024. The rest could be used to construct or buy behavioral health-related facilities or acquire land for them; fund the operations and maintenance costs of new units of affordable and facilities where housing-related programs are provided; or fund newly constructed evaluation and treatment centers.

During the public hearing on the proposal, Melissa Moore, executive director of Habitat for Humanity of Mason County, said the tax is a necessary and crucial step in helping the homeless. The nonprofits are the “first responders” when it comes to working with homeless people, she said, and pointed out Habitat could build three houses for homeless families for $310,000.

Shelton resident Dean Jewett said the tax would be “throwing good money after bad.” He said the only people speaking for the tax Tuesday evening work for nonprofits who don’t have to face the same issues as a business.

Mike Olsen, who was on the Shelton City Commission before it became a council, called the proposal undemocratic, “imposing taxation without representation.” He suggested the city would receive backlash by imposing a new tax a year before the city will likely ask residents to renew the Transportation Benefit District taxes.

Council members shared their thoughts before the vote.

Gutierrez said he is constantly “attacked” by people who say the city is not doing enough for housing. He pointed out the city has changed zoning to allow smaller structures and recently removed height limits for buildings in almost all zones.

The money collected from the tax is small and can be used to help people pay their rent, Gutierrez said. “We need to do this now,” he said.

Gilmore called the tax “a big step in the right direction.”

Onisko called the proposed tax a small amount of money that could be leveraged into grants to pay for large projects to help the homeless. He said 70 Washington cities have incorporated this tax. “I was elected to make decisions, and this is a tough choice,” he said.

Schirman said the state has already spent billions of dollars on programs for the homeless. Sapp said she believes the voters should decide on such a tax.