Sales tax measure pushed to November

City has until Aug. 1 to agree on funding scheme for road care
By Nicholas Johnson | May 03, 2017
Photo by: Nicholas Johnson Former mayor Don Doran speaks to the City Council during a Transportation Benefit District public hearing May 1.

After three public hearings and hours spent scouring the budget, members of the city’s Transportation Benefit District board decided in a 3-2 vote May 1 to push a potential sales tax measure to the November ballot.

The board, which is made up of City Council members, has been working toward a May 12 deadline to place a sales tax measure on the August primary ballot ever since establishing the district in early April.

The district allows the city to raise money for street pavement preservation and pedestrian improvements through vehicle license fees and/or a sales tax increase, which must be approved by voters.

With that deadline looming and a remaining need to identify people to pen pro and con statements for a voters’ pamphlet, the council opted to take more time and refocus its efforts on the general election, which has a filing deadline of Aug. 1.

“I’m not for this,” district board Vice President Steve Schmalz said of a potential sale tax measure, “but I think if it does go to the ballot, the November ballot is more inclusive for the voters. I would rather have more participation than less.”

Board President Scott Whelpley agreed.

“I’m not for raising taxes, either,” he said, “but I think if we’re going to walk that path, it should be the decision of the voters.”

In years past, the city has dedicated about $450,000 per year from real estate excise tax revenue to transportation infrastructure maintenance, with $300,000 going to pavement preservation and $150,000 going to pedestrian improvements.

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 is considering two ways to raise that money.

During an April 24 special meeting, the board combed through the city budget looking for ways to pay for street maintenance that would not require car tab fees or a sales tax increase.

Council members Schmalz, Richard Emery, Randy Lord and Bob Champion proposed their own funding scenarios, each comprised of a hodgepodge of existing revenue sources, such as real estate excise taxes, increased business license fees, untapped property taxing capacity, paid parking revenue, Paine Field Defense funds, Rosehill Community Center funds, the General Fund, and sales tax revenue from construction of the state’s new ferry terminal.

Nearly all of those scenarios shared an interest in using real estate excise taxes, increased business license fees and untapped property taxing capacity.

At the May 1 meeting, Whelpley said the city’s untapped property taxing capacity, which amounts to some $470,000 per year, should not bet tapped before giving voters a chance to consider a sales tax increase.

“If it [a sales tax measure] doesn’t pass, then obviously we go toward the banked capacity,” he said.

“If most of us who sit here make six figures and we can ask our residents who don’t – the ones who are on fixed incomes and who are barely making it – to pay more on car tabs, to pay more on their property taxes, I think everybody here should make it their duty to find something in the budget to resolve this.”

Former mayor Don Doran, who spoke during the public hearing, said all funding sources should be considered, except for the car tab fees, which he characterized as a political nonstarter in Mukilteo.

“I would not be troubled by being the highest sales tax city in the state,” he said, noting that a sales tax impacts more than just residents and comes with a 10-year sunset clause.

“It doesn’t bother me one iota, for a couple reasons: this is only a moment in time; you’re first now, but you won’t be later. It’s the one funding source you can use that you likely will never have to address again, and everybody pays.”

Doran was one of five people to speak over the course of all three public hearings, one fewer than the six who spoke during the April 3 hearing before the City Council created the taxing district.

“I really believe that we still have a long way to go in discussing this,” Whelpley said. “They [the public] haven’t had a chance to speak to it because it’s been so late when we have had these meetings.”

Earlier in the evening May 1, the City Council adopted a resolution of intent to assume the district’s powers as its own, something Policy Analyst Marko Liias said a majority of other cities with such districts have done since the option became available in 2015.

The council stopped short of actually assuming the powers, leaving that for a later meeting. Whelpley and Cook both said they didn’t see any reason to assume the powers before deciding on a funding scheme. Mayor Jennifer Gregerson said the main effect of assuming the powers would be better scheduling, allowing more people to weigh in.

“If the council absorbs the TBD, it allows us to schedule discussions about the transportation funding package as part of the regular council meeting itself,” she said, “and schedule those earlier in the agenda rather than have a second meeting that follows the council meeting.”

Comments (1)
Posted by: Joe Kunzler | May 03, 2017 15:01

Good you're going to voters.

Apparently my letter to the editor did not sink in.


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