ESB 5775
In CommitteeSenate
Public safety/local tax
Expanding local taxing authority to fund public safety and community protection focused programs and services.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill expands local taxing authority to let counties and cities impose sales and use taxes—up to 0.3% combined—to fund public safety and community protection programs, including behavioral health and diversion services. It allows passage without voter approval if local ordinances are adopted by January 1, 2028, and sets strict rules for how the money must be spent and shared between counties and cities.
- Counties may impose a sales and use tax up to 0.3% (3/10 of 1%) if approved by voters or by local ordinance/resolution adopted by January 1, 2028.
- Cities may impose a sales and use tax up to 0.1% (1/10 of 1%) if approved by voters or by local ordinance/resolution adopted by January 1, 2028.
- If both county and city impose taxes, their combined rate cannot exceed 0.3%, with rules for sharing revenue and applying credits to avoid exceeding the cap.
- At least one-third of revenue from voter-approved taxes (and all revenue from ordinances/resolutions without voter approval) must be used for public safety, criminal justice, fire protection, or community protection purposes, including behavioral health and diversion programs.
- Revenue sharing: counties keep 60% of county-collected tax and distribute 40% per capita to cities; cities keep 85% of city-collected tax and remit 15% to the county.
- Motor vehicle sales and leases (first 36 months) are exempt from the tax.
Who is affected
- Residents of Washington counties and cities — Residents of counties and cities that choose to impose the new or expanded sales tax will pay an additional 0.1% to 0.3% sales tax, depending on local decisions and combinations of city and county taxes.
- County and city governments — Counties and cities gain new authority to impose local sales taxes for public safety and community protection programs, with different rules depending on whether voter approval is obtained or not.
- Public safety and behavioral health service providers — Behavioral health providers, co-responder teams, and diversion program operators may receive increased funding from tax proceeds to support services that reduce criminal justice system involvement.
- Public safety agencies — Local law enforcement, fire departments, and emergency services may benefit from increased funding for public safety and community protection programs.
Pro/Con Analysis
Potential Benefits (5)
The bill requires (or strongly incentivizes) funding for behavioral health and diversion programs—evidence-based alternatives to incarceration that reduce recidivism and improve outcomes for people with mental illness or substance use disorders, directly benefiting vulnerable populations.
HealthcarePeopleRef: Sec. 1(5)(a), Sec. 1(5)(b)Mandating use of funds for co-responder and diversion programs aligns with national best practices (e.g., Crisis Response Teams, Law Enforcement Assisted Diversion) that reduce unnecessary arrests and emergency room visits, improving public safety while reducing strain on emergency services.
Public SafetyPeopleRef: Sec. 1(5)(a), Sec. 1(5)(b)The expanded definition of “criminal justice purposes” to include programs that reduce homelessness (e.g., housing-first diversion) allows jurisdictions to fund housing-linked behavioral health services—potentially reducing shelter use and police encounters for unhoused individuals.
HousingPeopleRef: Sec. 1(5)(a), Sec. 1(5)(b)The bill gives local governments flexible, dedicated revenue to address community-specific public safety and behavioral health needs—filling gaps left by state and federal grants and enabling responsive, localized service delivery.
Local GovernmentLean peopleRef: Sec. 1(1)(a), Sec. 1(2)(a)Exempting motor vehicle sales and leases for the first 36 months of lease reduces the tax burden on major consumer purchases—though this primarily benefits higher-income households who can afford new vehicles, it still provides some relief to middle-income households leasing new cars.
Business & EmploymentLean peopleRef: Sec. 1(4)
Potential Concerns (5)
The bill allows counties and cities to impose sales taxes without voter approval if ordinances are adopted by January 1, 2028, bypassing direct democratic consent—a shift toward legislative overreach that weakens local accountability and reduces transparency in tax policy decisions.
Local GovernmentIndustryRef: Sec. 1(1)(b), Sec. 1(2)(b)While the bill mandates that at least one-third (voter-approved) or all (ordinance-only) revenue fund public safety/behavioral health, the lack of enforceable performance metrics or reporting requirements means funds may be misallocated, duplicated, or used for low-impact activities without oversight—benefiting bureaucratic expansion over measurable public safety outcomes.
Public SafetyIndustryRef: Sec. 1(5)(a), Sec. 1(5)(b)Revenue-sharing formulas favor counties (60% of county-collected tax) and cities (85% of city-collected tax), but the per-capita distribution to cities can disproportionately benefit small, low-population cities over larger, higher-need urban centers—potentially underfunding services in areas with greatest need.
Local GovernmentIndustryRef: Sec. 1(6), Sec. 1(7)The bill creates a new sales tax that is regressive—placing a higher burden on low- and middle-income households who spend a larger share of income on taxable goods—while offering no targeted relief (e.g., EITC expansion or sales tax holidays) to offset the impact.
FinancialIndustryRef: Sec. 1(5)(a), Sec. 1(5)(b)The 0.3% combined cap and complex credit mechanism between counties and cities create administrative complexity for small retailers and local tax administrators, increasing compliance costs—especially for small businesses operating across jurisdictional lines.
Business & EmploymentLean industryRef: Sec. 1(2)(c), Sec. 1(2)(d)
Who Is Most Affected
Low- and middle-income households, especially those in jurisdictions that adopt the tax, will pay more for everyday goods—without offsetting benefits like tax credits—making this a net negative impact for them.
Counties and cities gain new revenue authority, but the revenue-sharing formula and administrative complexity may benefit larger counties and cities with more robust tax administration capacity—smaller or rural jurisdictions may face higher costs relative to benefits.
Behavioral health providers and diversion programs stand to gain significant new funding, especially in jurisdictions prioritizing non-carceral interventions—this could expand access to care but also risks fragmentation if funds are siloed or mismanaged.
Law enforcement and fire agencies may benefit from increased funding for co-responder teams and community protection programs, but the bill’s emphasis on diversion could also reduce arrest rates—potentially conflicting with traditional enforcement priorities.
Retailers—especially small businesses—will face added administrative burdens tracking and remitting taxes across overlapping jurisdictions, though the motor vehicle exemption offers some relief for big-ticket items.