(The Center Square) – Spokane Valley city officials have scheduled an Oct. 17 public hearing to consider formation of a local transportation benefit district.
Council members on Tuesday unanimously okayed a resolution to set the hearing, which will provide information about the function of TBDs and their potential revenue sources.
Deputy city manager Erik Lamb outlined the parameters and a draft ordinance that, as proposed, would designate Spokane Valley’s city limits as the benefit district’s boundaries and specify the council as the governing board of the TBD, which would be a de facto offshoot of city government.
State law allows cities and counties to form transportation benefit districts to raise revenue for specific local transportation projects, usually through sales tax or vehicle license fees. Common uses of TBD revenues include pothole repairs, crack sealing, rebuilding failing roads, snow plowing, cleaning storm drains, sidewalks, traffic signals, street lights, roadside maintenance and more. Revenues can accrue over time to finance larger projects or provide local matching dollars for future grant funding.
Spokane Valley has more than 320 miles of local access streets and nearly 130 miles of larger arterial and collector roadways that equate to 1,025 “total lane miles” in the community. To sustain a suitable “pavement condition index” requires an estimated $16 million annually, but the city is falling short of that amount by at least $5 million, according to a council summary.
To establish a TBD, a city or county must first conduct a public hearing to specify the district boundaries and transportation improvements which would be funded.
That’s the focus of the Oct. 17 hearing, said Lamb and councilman Arne Woodard, but there will be information provided about potential funding mechanisms should the council ultimately decide to form the district.
The summary did note that formation of a district “may be pointless if council does not have the intention to fund it in the future ….”
According to the Municipal Research and Services Center, more than 110 cities and towns in Washington have established TBDs and most of those use a sales-and-use tax of up to 0.3% – that is, 3 cents on every $10 purchase. If it chooses, a council has the option to vote in a sales tax fee of 0.1% but a higher amount must be approved by a simple majority of voters. The sales tax fee is subject to renewal every 10 years.
Proponents believe a sales tax proposal is the most equitable because it spreads the fiscal impact to the largest number of people, including visitors and area commuters driving into town to shop, and because it must be renewed every 10 years, providing more accountability and voter involvement.
A less-common option is the use of vehicle license fees. A TBD board may – without voter approval – impose a basic $20 annual vehicle license fee or an incrementally increased fee up to $50, or up to $100 with voter approval.
Proponents of tab fees say they apply most specifically to motorists and their effects on city streets while putting less of a fiscal burden on local businesses for collecting the sales tax. However, car tab fees tend to be less popular with voters because they recover no costs from visitors, commuters, or other travelers using local streets and could be subject to elimination through future voter initiatives.
Other rarely used TBD funding options include border area fuel taxes, vehicle tolls, bonds or other impact fees.
