H-2805.1
HOUSE BILL 2502
State of Washington
69th Legislature
2026 Regular Session
By Representatives Wylie, Parshley, Scott, Hill, and Macri
Read first time 01/15/26. Referred to Committee on Finance.
AN ACT Relating to improving local government funding by removing certain sales and use tax exemptions; amending RCW 82.04.050 , 82.08.0205 , 82.12.0205 , 82.08.0315 , 82.12.0315 , 82.08.806 , 82.08.806 , 82.12.806 , 82.08.807 , 82.12.807 , 82.08.832 , 82.12.832 , 82.08.900 , 82.12.900 , 82.08.962 , 82.12.962 , 82.08.986 , 82.12.986 , 82.08.975 , and 82.12.975 ; creating new sections; providing an effective date; and providing an expiration date.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. (1) The legislature finds that local governments, like cities and counties, are a critical component of Washington's governing structure. They deliver essential daily services such as law enforcement, roads, bridges, public health, behavioral health, veterans services, building and permitting, and many more, implement state laws at the community level, and act as the government layer closest to the residents and the most responsive to community issues. They form the foundation for effective state policy.
(2) For local governments to be successful, they must have adequate funding. Previous reports have highlighted significant local government funding challenges in the state, stemming from state and federal funding cuts, inherent fiscal constraints such as limited property tax revenue growth, and rising costs for services, including labor, public safety, insurance, and inflation, among others. A January 1988 study by the Washington state local governance study commission titled "The Quiet Crisis of Local Governance in Washington" found that, for local governments, "revenues are inadequate for the services they are expected or required to perform." A December 2007 study by the department of community, trade, and economic development titled "County Financial Health and Governance Alternatives" reported that "counties' revenue base has become more inelastic over the last decade, significantly contributing to fiscal distress and jeopardizing equal access across the state to basic services provided by counties." In August 2010 the state treasurer report titled "Local Government Financial Health Indicators" claimed "the financial condition of Washington's local governments has generally declined between 2004 and 2008 based on the selected stress indicators." An August 2014 report by the state auditor titled "Progress Report: Local Government Financial Health" found that "local governments continue to face the fiscally challenging combination of rising costs and constrained revenues that could jeopardize their financial stability long after the state and national economies fully recover."