Did you know that Anacortes appears to be trying to build the case for preparing taxpayers for another tax grab soon? At the July 27, 2026 City Council meeting, the Finance Department rolled out a familiar refrain: Inflation is outpacing the city’s tax revenue due to Washington state’s 1% annual property tax lid.
Slide 20 of the Finance budget agenda packet laid it out in bold graphics, asserting that since 2020, cumulative inflation hit 29%, while base property tax growth scraped by at just 6%.
Finance Department Presentation (Slide 20) at City Council Meeting on July 27, 2026
It sounds like a tragic tale of municipal belt-tightening. But if you look closely at the city’s presentation and the actual numbers behind it, a very different narrative emerges.
- The Art of “Convenient” Charting
The city’s official slide leads with a claim about the last 15 years, yet the chart conveniently displays only 2022 to 2026. It is not the first time local officials have played cherry-picker with timeline boundaries.
Take a look at the inflation-adjusted levy chart used by Ryan Walters and County Assessor in a March 2005 City Council meeting:
Inflation Adjusted Levy Slide Presented in March 2025 City Council Meeting
Notice where that chart stops? 2021.
Why stop in 2021? Because including the massive revenue jumps of 2023, 2024, and beyond completely shatters the narrative of a starving budget.
- What the City’s Slide Isn’t Telling You
The city wants you to focus on a modest 6% base growth figure. What they leave out is how voter-approved levy lifts and massive spikes in overall tax collections have far outpaced the 1% annual cap.
Washington’s 1% property tax lid limits base revenue growth, but it doesn’t stop the city from pulling in huge windfalls through special levies and new construction. Here is what historical finance records actually show:
Let’s look at the ten-year trend from 2015 to 2025:
- Assessed Property Values: Jumped 148%.
- Actual Taxes Generated: Increased 84% (an average of total revenue increase of 8% per year).
And in 2024 alone, property tax revenues spiked by an astronomical 49% when the Safety & Security Levy hit taxpayers’ bills. To claim the city is starving under a 1% cap ignores the massive windfall taxpayers have already delivered.
- The 2027 Deficit: Revenue Problem or Spending Problem?
During the Finance Department’s recent pitch, a stark forecast came to light: Anacortes is facing a $2.4 million budget gap in 2027.
Why? One reason is that starting in 2027, the revenue generated by the special Safety & Security levy will no longer cover the full funding required for the expanded services it created.
When asked how to address the deficit, Mayor Walters stated he has no intention of cutting city services.
If services aren’t being cut and revenues just jumped 49% two years ago, how did we get here? Consider the recent spending decisions:
- New Contracts & Stipends: City Council recently approved a 4% wage increase in the new firefighters’ contract, complete with special stipends for operating a newly acquired fireboat.
- Big Capital Purchases: The city acquired a $775,000 fireboat and is currently completing a major downtown fire station remodel.
- Grant-Funded Staffing Traps (“Cliff Economics”): The Fire Department secured a temporary federal grant to hire additional firefighters for three years. But federal grants don’t last forever. When the grant expires, those salaries don’t vanish – they turn into a permanent, multi-hundred-thousand-dollar line item on the city’s general fund, setting taxpayers up for a predictable fiscal cliff.
- Runaway Overtime: Despite hiring additional staff under the Safety & Security levy, logged fire department overtime remains significantly over budget.
The Bottom Line
When a city faces a multi-million-dollar deficit just two years after a historic levy-induced revenue surge, this isn’t a revenue shortfall – it’s a spending spree.
Why keep repeating the narrative that CPI is crushing the budget? Because establishing that narrative is step one in softening up taxpayers for another levy lid lift or tax increase.
Anacortes taxpayers: Keep your eyes open.
Sal Walker
Anacortes, WA