Moses Lake extends real estate excise tax

MOSES LAKE — Home sellers will be forking over a little extra cash when they sell their homes in Moses Lake over the next couple of years, as the Moses Lake City Council voted to extend a real estate excise tax for real estate sold within city limits.

The council previously enacted a second .25 percent excise tax on real estate sold within city limits to raise funds for operations and maintenance of existing capital projects. The excise is a tax that is paid on real estate transactions and by state statute is paid by the seller of the property in question. The math equates to $250 per $100,000 of the listed sale price of a home. A sunset clause was drafted into the ordinance for March 13, 2017, meaning the ordinance would no longer be in effect after that date.

During Tuesday night’s council meeting City Manager John Williams explained the legislature changed the areas in which monies raised by the tax can be used. The legislature limited the funds exclusively to the improvement of streets, sidewalks, street lighting systems, traffic signals, bridges, and construction of parks.

The council’s decision Tuesday night related to whether or not they wanted to change the ordinance and drop the sunset clause, allowing for the continuation of the tax to support the street fund, or take no action and allow the ordinance to expire on March 13.

Councilmember Karen Liebrecht, who suggested the sunset clause be added into the ordinance when it was originally passed, said she requested the provision with the idea in mind that the economy would soon be on the rebound.

“I don’t like to be the type of person that goes back on their word, but because our general budget is deficit spending...I need to repeal the sunset clause. Because I feel very strongly that we need to stop that spiraling down of our balances,” Liebrecht remarked.

Moses Lake-Othello Board of Realtors 2016 president Mark Fancher disagreed with Liebrecht’s assertion that the economy is still hurting, stating the local real estate market is on the rise after years of little to no growth. He said the excise tax could have an impact on potential sales, but the biggest issue is communication on the details of the tax and education on the additional fee for home sellers in the Moses Lake market.

Being a contractor himself, Mayor Todd Voth echoed Fancher’s sentiments. He noted that he voted in favor of the sunset clause and excise tax and previously said that he would stand by his word and not reinstate the ordinance when the economy got better.

“I am a contractor and the economy is good. The economy is substantially better than it has been over the last eight years. Housing sales are up. Inventory is down. Everything is good,” Voth remarked. “And I can not support repealing this.”

A vote to repeal the sunset clause resulted in a three-three tie, with councilmembers Mike Norman, David Curnel and Liebrecht voting for the repeal and Voth and councilmembers Don Myers and Ryann Leonard voting against it.

After the tie, Leonard made an additional motion to amend the ordinance and add in a revised sunset clause of Dec. 31, 2018. Leonard, Curnel, Liebrecht and Norman voted in favor of the motion. Voth and Myers voted against it.

Richard Byrd can be reached city@columbiabasinherald.com.