Kennewick sees $10 million erosion in utility-tax revenue since 2016; staff flags limits and options

Finance Director Jessica Platt told council the city has seen a sustained decline in certain utility-tax revenues, especially telephone and cable, over the last decade and staff estimate that decline represents roughly $10 million when measured from 2016 to 2025. "That equates to about $10,000,000," Platt said while reviewing charts that show phone and cable declines offsetting gains elsewhere.

Platt reviewed statutory and voter-approved limits on utility-tax rates (for example, limitations on gas, electric and telephone utility-tax rates) and explained some utility taxes historically certified to fund public safety are no longer keeping pace with inflation and personnel costs, which increases pressure on the general fund. Council asked whether taxing replacements for landlines (cell-phone data) is possible; staff said such a change would likely require action beyond the city level and explained that a large share of modern cell-phone bills is for non-taxable data services.