Mill Creek Council reviews new business and utility tax options for revenue generation

In the heart of Mill Creek, city officials gathered under the bright lights of the council chamber to discuss a range of potential revenue options aimed at bolstering the city’s finances. The April 1, 2025, City Council meeting was marked by a detailed presentation on various taxes and fees that could be implemented, each designed to support essential services and infrastructure.

City staff presented a comprehensive overview of three major categories of revenue options: business and utility taxes, other excise taxes, and specific fees. The discussions began with the Business and Occupation (B&O) tax, which would impose a 0.2% tax on local businesses' gross receipts. This tax is unrestricted, meaning the funds could be allocated to any lawful government purpose, including public safety and infrastructure. It is estimated that this tax could generate between $40,000 and $50,000 annually, although it would require additional administrative resources to ensure compliance.

Utility taxes were another focal point, with rates varying based on the type of utility service. For instance, a 6% tax could be applied to electric and gas services, while water and sewer services would not have a rate cap. The potential revenue from utility taxes could range from $1.6 million to $2.6 million per year, depending on the rates set and the services taxed.

The council also explored other excise taxes, including a lodging tax, which could be set at 2% but is limited due to existing county taxes. This revenue would be earmarked for tourism-related activities and could help fund local projects aimed at enhancing Mill Creek's appeal to visitors.

Additionally, the meeting touched on the possibility of implementing a transportation benefit district, which would allow for vehicle license fees to fund transportation improvements. This fee could be up to $50 annually per vehicle, providing a dedicated source of funding for road maintenance and transit services.

As the discussions unfolded, council members raised questions about the implications of these taxes on local businesses and residents. The need for careful consideration and community input was emphasized, ensuring that any new revenue measures would be both fair and beneficial to the city as a whole.

The meeting concluded with a commitment to further analyze these options and engage with the community to gauge support. As Mill Creek navigates its financial future, the decisions made in these council meetings will play a crucial role in shaping the city’s services and infrastructure for years to come.