The Lacey City Council on Thursday weighed the creation of a transportation benefit district and the funding mechanism for it as a way to help pay for the city’s asphalt overlay program for city streets.
Under consideration to fund the district is a 0.02-percent sales tax increase, or to enact a $20 vehicle tab fee. Here’s how each would work:
• Sales tax: the two-tenths of a percent increase, which would have to be approved by voters, would raise an estimated $1.9 million annually. The sales tax increase is limited to 10 years, and the city would have to decide whether to go to the voters during a general election, primary election or a special election. The cost to the city for both is estimated at $15,000 during a general election — the cost of a general election is spread among all jurisdictions which keeps the cost down — while the city would be on the hook for the full cost of a special election, estimated at about $100,000. Primary election costs are similar to a general election.
• Vehicle tabs: The renewal fee would cost $20, but could be enacted by a vote of the council, rather than a vote of the people. It is estimated to raise about $600,000 annually, if approved.
After Scott Egger, the city’s public works director, laid out the proposals during the work session, council members took it up for discussion.
Mayor Andy Ryder and council members Cynthia Pratt and Virgil Clarkson raised concerns about the regressive nature of a sales tax increase on those less fortunate, while counci lmembers Jeff Gadman and Jason Hearn leaned in favor of the sales tax.
Gadman said the vehicle tab fee won’t generate the funds the city needs, and that voters also would get to decide. Hearn said the sales tax spreads the burden because those drivers visiting the area also would pay the tax.
A decision on the transportation benefit district is not imminent. The work session ended with the council wanting more data about the funding options and the input of council members Michael Steadman and Lenny Greenstein. Both were absent Thursday.
After the work session, Egger said the transportation benefit district would create a dedicated source of funds for transportation projects, which currently rely on the city’s general fund budget. The challenge is that the general fund has felt the effects of the slower economy, he said.
Thirty-two cities in the state have transportation benefit districts, Egger said. Twenty-four are funded by vehicle tab fees, while eight are funded by sales taxes.Rolf Boone: 360-754-5403 email@example.com