Pasco real estate tax may be going up

PASCO -- Those who sell property in Pasco after March 1 may find themselves paying a higher real estate excise tax.

The Pasco City Council discussed raising the tax from its current quarter of 1 percent to half of 1 percent at a workshop meeting Monday.

Sellers pay the tax when property is sold. The state receives 1.28 percent of the sale price.

Cities and counties that are required to create comprehensive plans to deal with growth under the state Growth Management Act are allowed to charge a second quarter of 1 percent real estate excise tax, said Gary Crutchfield, city manager.

Kennewick, Richland and Franklin County all charge half of 1 percent, he said. The city did not check Benton County's percentage.

When someone sells a $100,000 home in Pasco, $250 goes to the city as an excise tax, Crutchfield said. If the council passes the increase, a seller would pay $500 on the same property.

Raising the real estate excise tax will help the city pay for capital improvements needed to accommodate growth, Crutchfield said. The city is required to have infrastructure in place for predicted growth under the state Growth Management Act, which guides the city's growth for the next 20 years.

The increase would bring in an additional $400,000, said Stan Strebel, deputy city manager. The change would start March 1, since the city is required to give the Franklin County treasurer 60 days notice of a change in rate.

The tax increase was included in the city's 2010 budget, which likely will be passed at its Dec. 21 regular meeting.

Councilman Bob Hoffmann suggested the city consider paying for some capital projects on a donation basis rather than through a tax.

The council will vote on the proposal at its Dec. 7 regular meeting.

Also Monday:

-- The council discussed remaining a member of Hanford Communities. Should Pasco decide to stay a member, its cost will increase from $6,500 a year to $12,000 a year.

Crutchfield recommended the city stay in the partnership with Benton County, Kennewick and Richland to employ someone to keep them up to date on Hanford activities and how those activities could affect them.

Pasco has paid a lower rate because it started out with a small percentage of Hanford workers as residents, Crutchfield said. However, the cities now have about the same number of workers as residents.

The city council will vote on the partnership at its Dec. 7 meeting.

-- An overall concept for the Broadmoor area, west of Broadmoor Boulevard and north of Harris Road, includes the possibility that the area where Central Pre-mix operates a gravel mine could become a marina.

Multiple challenges exist for development, said David McDonald, city planner. It lacks sewer and water service and adequate roads.

Central Pre-mix has permits to mine until 2025 and 2028 on locations within the Broadmoor area, he said.

The council will vote Dec. 7 on the concept, which includes land designations and a plan for future development.

-- Pasco has about $500,000 a year allocated to the Sewer Replacement Program through 2014, said Michael McShane, city engineer.

The city plans to continue lining aging sewer pipes to extend the pipes' use by 50 or more years, he said. About 12 miles of pipes have already been lined, with 11 to 12 more miles to be completed by the end of 2014.

The new pipe is inverted and pushed into the old concrete pipe, McShane said. It causes less disruption in an area and is less expensive than replacing a pipe.