Spokane Valley City Council okays new transportation district, funding undecided

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(The Center Square) – The Spokane Valley City Council on Tuesday approved an ordinance to establish a new transportation benefit district within city limits, which would be funded by new taxes.

However, no decision was made on how the TBD will be funded – typically, either by an annual vehicle license tab fee or an increase in the local sales tax. That discussion, along with deciding a collection amount, is still pending, said Spokane Valley Deputy City Manager Erik Lamb.

Lamb said the next step would be presenting a resolution to the council that details administrative responsibilities for the benefit district, a separate governmental entity with the city council serving as its governing board.

State law allows cities and counties to form TBDs to raise revenue specifically dedicated to local transportation improvement projects including street paving, crack sealing, pothole repairs, snow plowing, cleaning storm drains, and more. Revenues can accrue over time for larger projects or provide matching dollars for future grant funding.

Councilmember Laura Padden dissented in Tuesday’s 6-1 vote to establish the benefit district. Voting for the measure were council members Rod Higgins, Brandi Peetz, Arne Woodard, Ben Wick, Tim Hattenburg and Mayor Pam Haley. During the council’s Oct. 17 meeting, Padden voiced concerns that it would be another financial burden on taxpayers at a time when inflation is high and other public jurisdictions are also seeking money.

But the council has discretion in considering potential funding options, including seeking a public vote.

A majority of the municipal TBDs in Washington are funded by sales tax revenue. State law allows a local increase up to 0.3% – that is, 3 cents on every $10 purchase. A council can authorize an increase of 0.1% but any higher amount is subject to voter approval and must be renewed every 10 years. Under the sales tax option, non-residents making purchases in Spokane Valley – and driving on city roadways – would share in the financing.

With the other common option, a council may impose a basic $20 annual per-vehicle license fee, but voter approval is typically needed for higher amounts up to $100. And the tab fee would only apply to residents owning vehicles registered within city limits.

According to city documents, Spokane Valley has over 320 miles of local access streets and nearly 130 miles of larger arterial and collector roadways. An estimated $16 million is needed annually to maintain “suitable pavement condition,” but the city is falling short of that amount by at least $5 million for local streets.

Without a dedicated fund, the city has been tapping its reserves, Lamb told council members during a public hearing last week. He noted that transportation has been identified as one of the city’s top-two priorities.

Implementing surface treatments on local streets was also a priority among 1,018 respondents to a 2021 community survey, city engineering manager Adam Jackson said at the time.

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