Many cities and counties, facing aging/deteriorating roads and declining federal and state transportation funding, are looking at local tax and/or fee increases to fund much-needed street repairs and maintenance. In Washington State a city council can, with a majority vote, impose a vehicle tab fee of up to $20 to form a Transportation Benefit District. Anything above that requires voter approval. Cities can also levy a small sales tax increase.
The latest example is the City of Ferndale, in Washington State. The City Council voted 5-1 to create a transportation benefit district which could ask voters to approve a sales tax increase. That decision, and if and when the measure would appear before voters, may come as soon as December 5. A 2/10 of a percent sales tax increase would generate an estimated $300,000 a year, notes Kie Relyea of the Bellingham Herald.
Ferndale won’t be the last city in Washington state to seek a tax or fee increase for transportation projects. The Association of Washington Cities observed back in late 2010 that “cities are trending toward adopting Transportation Benefit Districts to assist (not wholly fund) their system.”
In fact just recently, the City of Wenatchee announced it it likely to approve a $20 car tab fee increase in December (link to article) after positive feedback from residents and businesses. The City of Bremerton indicated it may consider a vehicle tab fee increase early in 2012 (link to article). In November about 88% of North Bend residents approved a two-tenths of a percent increase in the city’s sales tax to raise money for street maintenance. Earlier this year the City of Bellingham used a two-tenths of 1 percent sales tax increase approved in November 2010 to restore Sunday bus service (link to article).
A challenge for cities is that majority of their transportation funding comes from their general fund. That revenue is declining, and is increasingly channeled to fire and other vital services. Typically, about 8% of city transportation funds come from federal sources – and that will probably continue to decline. Another 8% comes from state gas tax revenues, which is also expected continue to decline.
Meanwhile, Washington State has an estimated $6.6 billion need for road and bridge preservation over the next ten years. And that estimate, compiled by the state’s Transportation Commission, is just a portion: the most critical needs as compiled by MPOs and other regional planning organizations. It includes some city, county and state facilities, and certainly excludes many preservation and maintenance priorities.
Nationwide 78% of local tax increase ballot measures for transit passed in 2011. Cities and counties, more often than not, find residents and citizens will support a modest tax or fee increase for transportation projects. Yet at the state and federal level, public support for a tax or fee increase drops dramatically.
Ferndale will ask voters for sales tax increase to fix roads, Bellingham Herald
Washington Transportation Plan 2030, Washington State Transportation Commission, December 2010
Transportation Funding Overview, Connecting Washington Task Force, Fall 2011
“Car tab fee coming for Wenatchee,” Wenatchee World
“Bremerton council approves tax and fee revenues,” Kitsap Sun
“Bellingham to spend more money on bus service,” Bellingham Herald
“Voters save park district,” SnoValley Star