Bellevue could absorb a neighboring city's $4.93 billion in assessed property value if Clyde Hill voters reject a proposed 69% property tax increase on the November ballot.

Clyde Hill, the one-square-mile enclave of about 3,000 residents on Bellevue's western boundary, will run out of operating funds by the end of 2030 without new revenue, according to a Financial Sustainability Taskforce established by the City Council in December 2024.

The taskforce's June 2026 community letter identifies Bellevue as the most likely merger partner if the levy fails, warning that a merger "would cost taxpayers more."

For Bellevue property owners and businesses along that western edge, the scenario would mean inheriting Clyde Hill's service obligations, including an 11-officer police department and a fire contract already provided by the Bellevue Fire Department.

It would also bring roughly $4.93 billion in new assessed value onto Bellevue's rolls, generating additional levy revenue at the city's $0.96-per-$1,000 rate.

The proposed levy lid lift would raise Clyde Hill's property tax rate from $0.2955 to $0.50 per $1,000 of assessed value, a 69% increase. Even after the hike, Clyde Hill's rate would remain roughly half of Bellevue's $0.96.

Clyde Hill's total 2026 budget is $6.7 million. Police costs consume $2.8 million; the Bellevue Fire Department contract runs $895,000 annually and is projected to jump 10% or more in 2027, according to the taskforce letter.

Together, public safety eats more than half the budget.

Washington state law caps annual property tax increases at 1% without voter approval. That structural limit has made it impossible for Clyde Hill to close its revenue gap incrementally.

In five of the last seven years, expenses have outstripped revenues and drained reserves, according to The Urbanist's reporting.

"Unless the city did something, it was going to go bankrupt or it was going to get absorbed by another city," taskforce member Wayne Burns said at a January 2026 council meeting.

"In that case, taxes go up, and police services probably go down, and local control goes down."

The Clyde Hill City Council held a special meeting July 3 to advance the levy lid lift proposal. If the council gives final approval at its July 14 meeting at 6 p.m. at City Hall, the measure goes to voters on November 3.

The city incorporated in 1953, one day before Bellevue did. While Bellevue grew from 4.7 square miles to 36.5 through annexation, Clyde Hill stayed put.

Its population in the 1970 census was 2,987. Its commercial tax base consists of two businesses: a gas station and a coffee shop called the Queen Bee.

Mayor Dean Hachamovitch, appointed in 2025 after the resignation of former Mayor Steve Friedman, had chronicled the budget crisis for years in a Substack newsletter. In 2023 he wrote that the city "got here by a process of denial and delay."

Bellevue's city government has not publicly commented on the merger scenario. The Clyde Hill council's final vote is set for July 14.