Transit tax hike proposed Intercity Transit will consider asking voters on the Aug. 17 primary ballot for a sales tax increase of two-tenths or three-tenths of a cent on every dollar - a proposal that has met with mixed reviews from local jurisdictions.
The Olympia City Council couldn’t agree to support an Intercity Transit tax increase after a lengthy discussion Tuesday night. The Lacey City Council last week deadlocked in a 3-3 vote on the issue. Governing bodies in Thurston County, Yelm and Tumwater support a tax increase, Thurston County Commissioner Sandra Romero told The Olympian Editorial Board on Wednesday morning.
“Intercity Transit right now is at a crossroads,” said Romero, who also is the chairwoman of Intercity Transit’s board.
Intercity Transit is likely to decide March 17 whether to put the issue on the August ballot, she said.
Intercity Transit General Manager Mike Harbour said extra money is needed to maintain current levels of service because Intercity Transit’s sales tax revenue – which provides about 75 percent of its operating budget – is sharply down amid the recession. Costs outpaced revenue last year and are predicted to do so again this year. If the service can’t find more money, it will have to cut service beginning next year to preserve its reserve, he said.
Potentially on the chopping block is the transit authority’s Dash shuttle – three buses that offer free rides between the state Capitol Campus and the Olympia Farmers Market at an annual cost of $677,450 to the authority. Other routes that could be cut include 42, which serves South Puget Sound Community College, and 67, which serves Lacey. Several routes also could see reduced service. Sunday service also could be eliminated on all routes.
Intercity Transit taxes six-tenths of a cent on the dollar, and state law allows it to tax up to nine-tenths of a cent.
The authority is seriously considering one of the two possible tax increases. The 0.2-cent increase, Harbour said, would allow the agency to maintain its current routes and have a little money to spare for operational costs.
A 0.3-cent increase would keep current services and allow for a 23 percent growth in service, he said. Potential service increases include later evening service, increased frequency on some routes, expanded hours on Saturdays and Sundays, and more express service to Pierce County.
Harbour said the 0.3-cent increase would bring in 50 percent more sales-tax revenue.
The transit authority considered asking voters for a 0.2-cent increase last year but decided against it because of the economy.
Olympia City Council members expressed skepticism about the proposed tax increase Tuesday, and they were concerned that Intercity Transit didn’t make a strong enough case.
Olympia Mayor Doug Mah said the authority hasn’t shown that it has addressed possible cuts other than service cuts, such as switching from the more-expensive biodiesel to regular diesel.
“There seems to be a lack of consensus around community need,” he said. “It doesn’t seem that there’s been enough discussion.”
Harbour said that would save about $60,000, but not enough to be significant.
Romero told the editorial board that the agency already is doing more with less than it did in 2000. Spokeswoman Meg Kester pointed out that the agency is employee-heavy; most of its workers are driving buses.
Mah and others also were concerned that the transit tax increase would come at the same time the Olympia council is considering asking voters for a property tax increase to pay for more police officers and firefighters. The state also is considering tax increases.
Intercity Transit officials said that they, like council members, are aware of the perils of asking voters to raise their own taxes, especially during a recession that has cost many of them their jobs.
“These are competing needs, and subsequently, there are going to be competing measures on the ballot,” Mah said.
Councilman Joe Hyer raised a similar concern.
“In the absence of knowing what the state is going to do with sales tax … it would be difficult for me to recommend anything,” he said.
Added Councilwoman Rhenda Strub, “I don’t support this tax increase at any level.”
Matt Batcheldor: 360-704-6869