Council to place 0.1% sales tax on fall ballot

July 17 public hearing is last chance to weigh in before final approval
By Nicholas Johnson | Jun 28, 2017

Mukilteo residents will get one more chance to weigh in on plans to put a sales tax measure on the November ballot.

The City Council set a public hearing for 6 p.m. Monday, July 17, after voting 4-3 during a work session June 12 to have staff prepare a resolution for the city’s recently formed Transportation Benefit District to put a 0.1-percent sales tax proposition on the ballot.

The council also directed staff to prepare a public education plan and solicit volunteers to write pro and con arguments for the fall voters’ pamphlet.

To volunteer, submit a letter of interest indicating which committee – pro or con – to Policy Analyst Marko Liias by 5 p.m. Friday, July 7, at or to 11930 Cyrus Way in Mukilteo. The district board will appoint up to three volunteers to each committee during its July 17 meeting.

Revenue from the sales tax, which amounts to a penny on a $10 purchase, would be used for preservation of city streets, the construction and maintenance of sidewalks, trails and other pedestrian facilities, and safety and mobility improvements for bicyclists.

If approved, the tax collections would last for 10 years beginning in April 2018, after which the tax would expire unless reauthorized by voters. Also, state law requires that all funds raised by the measure be used solely for transportation purposes.

After a year of work, the city’s Wise Investment in Transportation Taskforce recommended in July 2016 that the city dedicate a minimum of $900,000 per year to pavement preservation, and the council agreed.

In March, the council adopted the By The Way Plan for biking, transit and walking, which recommended $435,000 per year for pedestrian improvements.

Together, the price tag comes to $1.335 million, $885,000 of which would not be covered by the historically used real estate excise tax revenues. Through its newly formed taxing district, the council has two ways to raise that money: a sales tax or car tab fees.

According to staff estimates, the proposed 0.1-percent sales tax would generate $294,118 per year, and roughly $221,000 in the first year due to collections beginning in April.

The district board, which is composed of City Council members, voted 3-2 on May 1 to plan for a sales tax measure on the November ballot rather than the August primary ballot. The idea of a car tab fee has failed to gain traction among council members.

During its work session June 12, the council scoured the budget once again looking for money to be used in case the sales tax measure fails.

“If the sales tax doesn’t come in, I want us to plan on using the [property tax] banked capacity to cover the difference,” council member Randy Lord said. “I don’t want us to scramble in the middle of November trying to figure out the budget.”

Possible budget sources that could help make up the difference include $470,000 in banked property taxing capacity, some $60,000 in business license fees, an expected $80,000 in savings from 2017 pavement projects, $50,000 from the Paine Field defense fund, and $25,000 in interest savings from refinancing of the Rosehill Community Center bonds, among other sources.

Council members Steve Schmalz and Christine Cook said they would not support a property tax increase. Schmalz said he’s not sure the city needs to fund the By The Way plan right away.

“We’re going around and around trying to get to $1.3 million when I think really the number we should be talking about is $900,000” for pavement preservation, he said.

Wheeler and Whelpley agreed that the funding level should be reduced.

“I keep looking back at my business versus the city,” Wheeler said. “It runs a lot the same, except if I run short a million bucks or so on a project, I don’t go to the customer and say, ‘I need another million bucks and you’re going to pay for it.’ It seems the city is constantly doing that.”

Lord disagreed, saying the council agreed to the funding level last year after whittling down larger staff proposals.

“We discussed it for a year,” he said. “I don’t understand why we’re deciding at this point in time to ignore all the facts, all the science and all the reports just because the number looks like it’s hard to get to.”

Schmalz said Lord should have pushed in 2008, before the city issued bonds to build Rosehill, to use some $7.5 million in real estate excise taxes to pay for roadwork.

“There was plenty of money in the budget 8, 9, 10 years ago when you were on the council, and you ignored it,” he said. “You chose to do nice-to-have stuff rather than need-to-have. Now you’re coming to us and saying we have to do this.”

Council member Richard Emery said the funding level is scary, yet necessary.

“This is one of the more difficult decisions I’ve had to wrestle with in my years on council,” he said. “It’s a big ask, but we really need to pay attention to what has been suggested to us as the minimum requirement to maintain our roads.”

Council president Bob Champion said he’s confident the budget could cover the $900,000. He said the council was premature in deciding to go the voters and should instead wait to see how bad the streets really are.

“We have always talked about having at least three data points on the roads so that we know what the true pavement condition index (PCI) is,” he said. “The last two have shown that the roads are in very good condition. That being the case, I’m interested to see what the data shows that gives us all a clear indication of how bad is the problem.”

Emery suggested a car tab fee that would raise about $400,000 per year, but that idea was quickly shut down. Whelpley said the council has debated this issue so much because of fear that voters won’t pass the sales tax measure.

“The reason we’re concerned they’re not going to pass a sales tax is because of what happened with ST3, with car tabs, with sales tax, with property tax,” he said. “Now you’re saying you want to come back and get them on car tabs again? That just blows me away.”

Whelpley said he prefers Champion’s plan to find one-time funding sources in the budget instead of relying on approval of the sales tax measure.

“If it passes by some miracle, then we have the revenue we need,” he said. “If it doesn’t, we can go Council President Champion’s route.”

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