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KITTITAS COUNTY <br />BOARD OF COUNTY COMMISSIONERS <br />STAFF REPORT FOR <br />STUDY SESSION <br />Auditor <br />STUDY SESSION DATE: 02-19-2026 <br />TOPIC: Real Estate Excise Tax (BEET) Current Usage and Changes <br />ACTION REQUESTED: Review options and support below for reallocation of <br />REET 2 funds in the 2026 budget. <br />LEAD STAFF: Zack DeHaven <br />RECOMMENDATION: Reevaluate current and future obligations related REET 2, <br />considering recent developments (HB 1791). <br />BRIEFING SUMMARY: The most substantial change to REET revenues occurred on <br />July 27th of this year when House Bill 1791 went into effect. This bill increases the <br />flexibility in how governments are permitted to utilize REET 1 and REET 2 funding: <br />• Any revenue raised under REET 1 may be used for eligible BEET 2 uses and vice <br />versa. <br />■ Governments can use the greater of 35% or $100K of REET 1 and 2 revenues for <br />operation and maintenance of existing capital projects beyond 12-31-2023. The <br />$1 MM cap on capital projects and the related reporting requirements are <br />removed. <br />REET 1 revenues have been the topic of many discussions recently approximately 70% <br />of the revenue for the next five years is committed to financing of past and current <br />projects. <br />REET 2 revenues on the other hand have been pledged to being transferred to the Parks <br />fund in totality starting in 2026. The 2026 Parks Fund budget is $725K and the estimated <br />REET 2 revenue is $1,750,000. <br />With no long-term commitments for REET 2 revenue and newly expanded spending <br />flexibility, there is an opportunity to align with strategic priorities and make meaningful <br />progress. <br />Pagel of 3 <br />Auditor "Study Session Staff Report", 02/19/2026 <br />