People parking, buying movie tickets and shopping in Vancouver can expect to pay more starting next year.
To close a $43 million deficit in the 2025-26 budget, the Vancouver City Council on Monday passed ordinances for two tax increases and five new taxes, most notably a 0.1 percent business and occupation tax on retailers to pay for a 150-bed homeless shelter.
The council also approved doubling special license fees required for certain businesses, including tow truck operators and pawnbrokers.
Many Vancouver residents expressed concerns over the increased taxes and said they weren’t in support of a tax to fund what city officials are calling a bridge shelter.
Councilor Bart Hansen voted against three of the new taxes, including the tax that would fund the shelter.
“When you look at the cost of living and how people are being priced out of their homes and people can’t afford their rent, and now we’re coming along and saying, ‘We have a few more taxes for you,’ it just doesn’t make sense to me,” Hansen said.
New taxes
With such a large shortfall looming, budget cuts weren’t enough to balance the books for the next two-year budget cycle. For months, city councilors have debated how to bring in new revenue.
Starting Jan. 1, moviegoers will pay a 5 percent admissions tax on theater tickets and subscriptions in Vancouver. That’s 75 cents on a $15 ticket.
The city council also approved an ordinance shifting the card-processing fee for electronic payments with the city to the customer starting Jan. 1. The city previously absorbed that cost.
In addition, the city council adopted a 0.1 percent sales tax to fund arts and culture programs, which will also take effect Jan. 1.
Commercial short-term parking, such as street parking or parking lots at shopping centers, will cost more starting January 2026. The council adopted a tax of 15 cents per transaction for parking in lots and garages and 20 cents for parking on streets. The tax will increase by 2 cents per transaction annually.
Tax to fund shelter
The tax that drew the most ire Monday night was the 0.1 percent B&O tax on retailers, which would start as soon as Jan. 1, 2026. Although the tax would be imposed upon businesses, the increased cost could be passed onto customers through higher prices.
The tax would exclusively fund a 150-bed homeless shelter. The city estimates about 500 people live outside in Vancouver, but shelters rarely have beds open.
City officials estimate acquiring and building the shelter would cost about $16 million and operating it would take another $6 million to $7 million per year.
The shelter will have on-site medication-assisted drug treatment and services to help people stabilize and find housing, Vancouver’s Homeless Response Manager Jamie Spinelli said.
Hansen was the sole vote against the B&O tax, admissions tax and cultural access sales tax. Both he and Councilor Sarah Fox voted against doubling the special license fees.
Hansen, also the executive director of the Building Industry Association of Clark County, said he warned two years ago that high inflation and interest rates will eventually affect the city’s budget. City staff now cite those reasons for the budget deficit.
“It hit us. But at the time, I was assured that we had adequate reserves to weather such a storm,” he said. “Looks like we didn’t.”
Increased taxes
As expected, the city increased property taxes by 1 percent, the maximum increase allowed by state law.
This will increase the bill for the owner of a $504,554 house by $9.88 per year, assuming a 1.93 percent increase in assessed value of the property, according to the city.
The council also approved utility rate increases for 2025 and 2026.
Bills for water will go up by 4.5 percent, sewer by 6 percent, and surface water by 8 percent each year in 2025 and 2026.
All these taxes help bring the city’s operating budget to $2.11 billion for the 2025-26 budget cycle.
Despite the deficit, the operating budget is $46 million more than in the previous two years, Budget Manager Shannon Olsen said.
