Bill gives tax breaks to companies in 4 cities in exchange for job creation

OLYMPIA — Marysville and Arlington will soon have a new tool to help attract businesses to an industrial area they share: a tax break.

A bill passed by state lawmakers last week allows the cities to exempt companies from paying a portion of property taxes if they create a minimum of 25 jobs that pay at least $18 an hour.

Senate Bill 5761 was passed by the Senate and House on Thursday, the final day of the first special session. It will now go to Gov. Jay Inslee for his expected signature.

“The city of Marysville is very grateful for the Legislature’s support,” Marysville Mayor Jon Nehring said in a written statement. “Encouraging new manufacturing businesses to locate and expand in the area will bring jobs to cities and strengthen our economy.”

The bill also applies to Lake Stevens and Mill Creek, but it was Marysville and Arlington that pursued the tax break. Leaders there have been lobbying lawmakers for three years. They say other communities in other states already offer the same or similar incentives to the very companies the two cities are trying to land.

Their goal is to convince aerospace, high-tech and manufacturing companies to settle in areas designated for industrial development.

Under the bill, taxes that are now paid on the land would continue to be collected. The proposed exemption would apply only to taxes due on the value of improvements, such as construction of new facilities.

A company would be exempt from paying those taxes for 10 years under certain conditions, including that the firm creates 25 or more jobs that pay a “family living wage” estimated to be at least $18 an hour.

City leaders are focused on developing roughly 1,200 contiguous acres straddling the two cities’ borders in and around Arlington Municipal Airport.

About 800 acres are in Marysville and lie east of I-5 and south of Highway 531, between 128th and 164th streets NE. That property once was considered for a NASCAR race track and a University of Washington branch campus. It connects with about 400 acres in Arlington around the airport.

“I hope it works. I hope we get some family wage jobs in that area,” said Rep. June Robinson, D-Everett, who pushed the bill through the House.

House Minority Leader Dan Kristiansen, R-Snohomish, said in a written statement that jobs created as a result of the exemption “will have a multiplier effect for our economy as employees purchase homes, cars, groceries, clothes, fuel, eat in our restaurants and pay for their daily needs. Essentially, everyone in our local area stands to benefit from this legislation.”

Until Thursday, the bill hadn’t been discussed in the special 30-day legislative session. During the regular session that preceded the special session, the bill cleared the Senate but didn’t get voted on in the House.

“We had heard it was in a holding pattern and could move. We were hopeful,” said Gloria Hiroshima, chief administrative officer for the city of Marysville.

The measure wound up passing unanimously in the Senate and on 74-18 vote in the House. Rep. Elizabeth Scott, R-Monroe, voted against the bill.

Sen. Kirk Pearson, R-Monroe, the bill’s prime sponsor, praised Robinson for coming up with the wording for an amendment to precisely define which cities could offer the tax break without actually naming them. The state Constitution prohibits legislation that would favor a particular person or community, so bills are worded to be potentially more inclusive than intended.

This bill’s language says that an eligible city must have “a population of at least eighteen thousand; and is north or east of the largest city in the county in which the city is located and such county has a population of at least seven hundred thousand, but less than eight hundred thousand.”

That definition applies only to four cities in one county. In Snohomish County, that applies Marysville, Arlington, Lake Stevens and Mill Creek.

“If it goes well, other cities might come back to the Legislature and ask for this,” Pearson said.

Jerry Cornfield: 360-352-8623;

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