Gov. Gregoire proposed Monday, Nov. 21, that the state sales tax credit for cities who have annexed unincorproated areas be reduced by 10 percent.

The proposed reduction is part of the governor’s proposed budget to address a $2 billion state budget shortfall. The state Legislature will convene on Friday, Nov. 25 for a special session to deal with the shortfall.

Burien City Manager Mike Martin said Burien would lose $50,000 a year in revenue under Gregoire’s proposal. Currently, Burien is scheduled to receive the tax credit for eight more years after annexing Boulevard Park and the south portion of North Highline in 2009.

Burien is already facing a $467,000 drop in property tax revenue next year because of declining property values.

The governor released her budget plan on Monday morning, and as of Monday afternoon, Martin said it is unclear what the effect would be on future annexation credits.

Burien was planning on receiving $5 million per year for 10 years in sales tax credit if it annexes White Center and the remaining North Highline unincorporated area.

Burien council members have indicated they would not pursue annexation without the state sales tax credit.

Burien Councilman Jerry Robison, the council’s most fervent annexation supporter, has told the Times/News that it might be possible to move forward with annexation even if the state offers a sales tax credit for only five years.

Martin cautioned that “it is still very early in the game” to draw conclusions about what will happen with the credit.

The governor’s proposed budget is followed by proposed budgets from the state House and state Senate. Budgets must be passed in both houses and then be reconciled before a final budget is passed by the legislature and signed by the governor.

Expect fierce lobbying against Gregoire's proposal from Burien and the other cities that receive the annexation tax credit. The other cities include Kent, Renton, Kirkland, Auburn, Marysville and Lake Stevens.