A $400 million proposal to house 2,000 people who have been chronically homeless in King County through a new sales tax is losing millions of potential dollars as suburban cities adopt their own version of the tax instead.

So far, Issaquah, Renton, Kent, Snoqualmie and Covington have voted to adopt their own 0.1% sales tax, a mechanism authorized by state legislation if the county had not already adopted its own 0.1% tax by a Sept. 30 deadline. Next week, North Bend is preparing to vote on whether to do the same.

The result is an estimated loss of $18 million, or nearly 13%, from the county’s projected revenue from the tax for 2021 and 2022 alone.

The Seattle Times’ Project Homeless is funded by BECU, The Bernier McCaw Foundation, The Bill & Melinda Gates Foundation, Campion Foundation, the Paul G. Allen Family Foundation, Raikes Foundation, Schultz Family Foundation, Seattle Foundation, Starbucks and the University of Washington. The Seattle Times maintains editorial control over Project Homeless content.

King County Executive Dow Constantine revealed the proposed tax as part of his biennium budget in late September. The plan would raise $400 million in bonds against the tax to create permanent supportive housing quickly for a county with the third-largest homeless population in the country. Instead of building the housing from scratch, the plan would have the county buy up existing motels and assisted nursing facilities to convert into housing with social supports.

For Constantine’s plan to pull through, all 39 county cities would have had to hold off on implementing their own taxes. But several are deciding to levy the tax anyway after months of rising tension between the county and suburban cities over homelessness strategy.

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Suburban cities squared off against Seattle officials in the creation of the Regional Homelessness Authority last winter as politicians vied for power on the authority’s governing board. And after the pandemic broke out, some cities resisted the county’s emergency effort to put people living homeless into local hotels and motels.

Initial findings from a study on the hotels by the University of Washington and the county concluded that it slowed the spread of COVID-19 among the homeless population and reduced conflict in shelters.

Mike Heinisch, executive director of Kent Youth and Family Services, which provides homelessness prevention programming in South King County, characterized the county’s missed Sept. 30 deadline to implement the tax as a mistake. He also thinks the cities are pulling out of the tax in order to renegotiate their position with the Regional Homelessness Authority.

“I do hope that the move to retain the authority locally is really … is positioning to continue to level the playing field on the governance structure and ultimately that the cities will revote to send those funds to the regional authority,” Heinisch said. “But that’s a ways away.”

Cities began adopting their own version of the tax on Oct. 5, after the missed county deadline and a week before the county was set to vote on the tax.

Officials from those cities framed it as a way to have control over the funds generated in their cities, and to have a voice in what the county does with the money.

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“Really it’s to reserve a seat at the table for the conversation, so we as cities have a say,” Kent Mayor Dana Ralph told council members at a meeting Tuesday, Oct. 6, before the vote to levy the tax.

It remains unclear how much the loss will impact the proposed $400 million bonding package, according to the county, though it’s safe to say it will be smaller.

“That does threaten the work we can do; however, there is still significant revenue the county can receive from the rest of the county and bond against and work with the cities,” said King County Councilmember Joe McDermott, who is co-sponsoring the county legislation.

McDermott said he looked forward to the plans from individual cities levying the tax to address housing for people at 0 to 30% of the area median income. The state law authorizing the tax, however, allows it to be used to create housing targeted to people at up to 60% of the area median income.

Alison Eisinger, executive director of the Seattle/King County Coalition on Homelessness, said she worried that cities pulling out of the tax signaled a lack of support for homelessness interventions like permanent supportive housing.

“I hope sincerely that some of this is politics rather than policy, and that some cities are trying to make a statement and position themselves for negotiating purposes rather than opting out of doing this good, big necessary thing,” Eisinger said.

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“My concern is that there are certain electeds who are not bought in to the clear, understood, effective solution,” Eisinger said. “So that means we just have more work to do.”

Many cities are still set to join with the county, however.

After discussing the issue at the Federal Way City Council, council members decided to let the county move forward.

“Staff did not think we would make enough money from the sales tax to do very much in Federal Way,” said council President Susan Honda. “So we decided not to as a city and let King County do it.”

Heinisch, of Kent Youth and Family Services, said it’s important for cities to recognize that what’s happening in suburban cities affects Seattle, and vice versa.

“If every city takes its own share of the pie, how much can get done in any one jurisdiction?” Heinisch asked. “If we all put it in one pot and share and put it toward where need is the greatest, I think we can make some real progress.”

An earlier version of this story gave an incorrect figure for the size of the sales tax under consideration.