Bellevue City Council removes endorsement of property tax and REET expansion

If you blinked near the end of last night’s Bellevue City Council meeting, you might have missed the plot twist. In a last-minute amendment, Councilmember Jared Nieuwenhuis asked colleagues to remove language in the City’s draft state legislative agenda that referred to modifying property tax lid lift options and expanding Real Estate Excise Tax (REET) authority. The council agreed, and the final language now keeps the emphasis on local flexibility without naming specific tax tools.

The original bullet said the City would seek greater flexibility for local revenue decisions, including changes to the property tax levy lid lift and an expansion of REET authority. After discussion, the council settled on a simpler statement: The City requests that the Legislature provide greater flexibility for local revenue decisions. In practical terms, that means the City can still advocate for options to manage services sustainably, but it is not pointing to any particular tax mechanism in this agenda item.

“We just went through the largest tax increase in state history. Affordability is something I hear about every day. We don’t need it. We’ve got banked capacity … Expanding REET would undermine affordable housing efforts, penalize nonprofit developers, and increase barriers to housing access especially in high cost cities just like Bellevue.” - Councilmember Jared Nieuwenhuis

The debate that led to the edit was straightforward. Councilmember Nieuwenhuis framed the change around affordability concerns and Bellevue’s existing banked capacity, and that argument resonated with many who wanted to avoid any perception that the city was encouraging higher taxes.

Others noted the long running context

Deputy City Manager Genesee Adkins reminded everyone that the broader section of the agenda already speaks to taxpayer impacts and sensitivity to tax proposals. She also pointed out that references to property tax and REET have appeared in the agenda for the last three years, and that the council could amend the language if it wanted to adjust the level of emphasis. Mayor Robinson added that this same discussion tends to come up every year. Councilmember Bhargava asked about the downside of removing the language, given that it has been there for a few years.

City staff offered helpful clarity, emphasizing that the original sentence did not commit the city to new taxes. The point was to preserve policy flexibility and local control, so that cities can respond to future needs without being boxed in by statutory limits. To keep that intent clear, she suggested deleting the second clause and retaining the local control focus. Several councilmembers indicated they liked that direction.

Deputy Mayor Malakoutian put a fine point on the perception issue. He noted liking the flexibility and taking ownership of what that money can do for the City if needed in the future, but the phrasing seemed as though it encouraged more taxes on property and on the sale of property. It was requested that staff to refine the wording or remove it, because the goal was not to raise taxes, but to protect local flexibility in a tough economy where people are struggling.

“I 100% agree with Councilmember Nieuwenhuis that the phrasing we read here encourages more taxes for property tax and also the sales tax on selling properties ... Everything is expensive and people are struggling … I don’t have any wording suggestion, but I would love for staff to work on that. The perception that we are increasing any tax  on property or sales on housing is not the point of this, and it’s all about the local flexibility.” - Deputy Mayor Mo Malakoutian

With that consensus forming, staff reiterated the edited sentence that drops the specific references and centers local control. The Deputy Mayor moved to adopt the legislative agenda, and the vote was unanimous.

Why this matters to employers, nonprofits, and residents

For our members, clarity in the City’s legislative agenda is not a small thing. Companies, property owners, and housing partners read these documents for signals. The updated language sends a clear one. Bellevue is asking Olympia for flexibility to manage local services, and it is not singling out property tax changes or REET expansion as priorities in this item. That helps avoid confusion while the region continues to navigate affordability challenges and tight project margins, especially for nonprofit housing developers.

The revision also maintains the City’s ability to engage in policy conversations next session. Keeping the focus on local control preserves room to respond to future needs without implying that any particular tax tool is on deck. It is a cleaner message that aligns with what we hear from employers and community partners about predictability, transparency, and affordability.

Our take

The Chamber strongly supports the Council’s decision to refine this language. After a legislative session marked by several new and costly tax proposals, it’s critical that Bellevue’s advocacy in Olympia not be misread as an endorsement of additional taxes on property owners, employers, or housing providers. 

By removing explicit references to property tax lid lifts and REET expansion, the Council sent a clear signal: Bellevue’s focus is on protecting affordability — not layering new tax burdens onto a region already facing cost pressures. The average renter will save hundreds of dollars a year if their residential buildings aren't subject to an additional housing tax like REET. The revised language preserves the City’s ability to manage its finances responsibly while keeping faith with businesses, nonprofits, and residents who are navigating a fragile economic recovery. 

This adjustment aligns with the Chamber’s long-standing advocacy for fiscal predictability, competitive tax policy, and a strong partnership between the public and private sectors. We appreciate the Council’s attentiveness to perception and policy alike — and its commitment to clarity at a time when employers and housing partners need it most.