WHITE SALMON — The White Salmon City Council held a workshop Nov. 16 to discuss a potential additional revenue stream to fund transportation improvements.
Cities in Washington State are allowed by state statute to implement what is called a “Transportation Benefit District,” which can be funded through an additional sales tax or vehicle licensing fee.
If a city adopts such a district, which would require a public hearing before its implementation, a city can authorize an additional 0.1% sales tax without voter approval for 10 years. The tax can then be renewed by voters through a referendum for additional 10-year periods. A city can adopt vehicle licensing fees incrementally as well, up to $50 over 10 years through council approval, and up to $100 with voter approval. City staff recommended against the licensing fee option.
According to City Manager Troy Rayburn, the city stands to gain an additional $72,791 per year on a 0.1% sales tax increase based on 2020-2021 revenue.
The majority of sales tax collected by the city comes from retail, trade, and construction, City Staff Assistant Jan Brending said.
Brending said the city’s current revenue does not cover the street improvement projects detailed in the city’s six-year transportation plan, which is worth $7,319,309 in project estimates that are currently unfunded, and the plan does not include every transportation project the city needs.
With the pandemic, online shopping has increased, and Brending said when a White Salmon resident orders online, if the product is delivered to an address within city limits, the city will receive some of the sales tax paid on the product. As well, the city collects some sales tax, which is also split between the county and state, on any construction services that are performed within the city.
Revenue collected through a transportation improvement project can fund any improvement projects listed within their six-year plan, which is set for adoption in 2023.
“We don’t have the revenue to implement a lot of what is likely to be in the TSP for implementation in the next 10 years,” Jeff Broderick, principal planner for the city’s transportation goals, said. “Something like this revenue base isn’t a huge amount every year, but there is the possibility that if we have this money at the ready, if we have an opportunity to go after a grant or a loan, it essentially allows the city to have skin in the game. It’s what the local match could be. And that is an opportunity we don’t have at this point.”
During council discussion, Councilor David Lindley said the city has long known that they need to look at increasing revenue without increasing costs, and said that since the potential pot of money is relatively small, he wonders whether there could be additional tax increase proposals stacking on top of this revenue source.
“I just want to see, how does this fit into the broader picture,” Lindley said.
Brending responded saying that there are no additional proposals for additional revenue sources at this time, and added transportation dollars could come from state and federal sources at a later time but it is unknown what those would look like at the time. She confirmed that the funds raised through a transportation improvement project would primarily be used a grant match.
The city hadn’t reviewed how much revenue could come from a licensing fee, because the data is held by the Department of Revenue and that during staff discussions with Mayor Keethler, the focus was on a sales tax rather than a licensing fee, Rayburn said.
Broderick said an estimated $55,000 per year could be raised on a licensing fee, based on a 1.88 vehicle to household ratio, which would be less than a sales tax. Councilor Patty Fink noted that while the revenue would be less, it would be more targeted towards people using the roads.
The city can approve both revenue streams, Brending said.
Fink said she was in support of raising matching funds for grants.
“I think it’s probably the best wins that we can have. And it allows us to pull in a lot more money for the city than otherwise,” she said, adding that the city needs to do due diligence to understand what other funding sources might be available.
The boundaries of the district can be different from city boundaries, which would require a separate board to administer the funds, Brending said.
Councilor Jim Ransier said he was in support of reviewing a 0.1% sales tax proposal and to continue reviewing the licensing fee option for a later date.
Councilor Ben Giant said he was in support of a proposal that would include both a sales tax and vehicle licensing fee.
City staff ended the discussion confirm a draft ordinance will be reviewed by officials at a later date.
Commented