SPOKANE VALLEY – Since council has adopted the Transportation Benefit District on Oct. 24, there have been questions on how it will be adequately funded. After deliberating the idea through a couple of workshops and meetings, they have narrowed the options down to just two.
Council is looking at either implementing an increased sales tax or vehicle tab fees.
Proposed ordinance 23-024 would move to implement a vehicle fee, and it would also create fund 111, which is where appropriate funds would be accounted for.
City staff estimate there are 140,676 registered vehicles in the city.
According to the Deputy City Manager Erik Lamb, council can enact a $20 fee at any time without voter approval.
Not everyone agrees with that, and during the public comment period, Dan Allison spoke against this move.
“This tab fee should absolutely go to the people,” Allison said. “This is what I’m going to say. If you don’t put this in front of the people you won’t get re-elected.”
“I voted for every one of you people up there and I went to the city to get you guys a raise which went through. You do not need to keep taking money from the citizens of this town.”
Estimated revenue with $20 fees adds up to $2,813,520, but council may raise those fees periodically. The Department of Transportation would receive one percent of those fees totaling $28,135.
After two years at $20, the city could raise the fees to $40 creating an expected revenue of $5,627,040 and the DOT would see $56,270. After two more years they could be raised to $50 bringing in $7,033,800 where the transportation dept. would see $70,338.
According to staff, the license fees may exceed $50 but not more than $100, but would need majority voter approval to raise them that high.
Councilwoman Laura Padden shared her thoughts on this proposal.
“I have a few thoughts on tab fees,” Padden said. “First of all, they don’t impact people that come here and use the roads but don’t live here like the sales tax would.”
“Secondly they impact lower income people more than higher income people because it’s a flat fee, and tab fees have a recent history in Washington state and it’s not all that positive.”
Padden shared that in 2019 an initiative was proposed to limit tab fees to $30. That was initiative 940 according to Padden.
She said it was passed in 60 out of 62 cities, and that shows tab fees are not a popular option.
She also said that recent statistics show the average American family needs more than an additional $11,000 to simply maintain their standard of living.
“I don’t know too many people that have got raises in excess of $11,000 annually since 2021, and I’m just saying it’s not a popular tax and not a good time to raise taxes on regular people.”
Councilman Ben Wick said he adamantly believes this should be taken to the voters.
“I was the one who spoke very adamantly about taking this to the vote of the people before,” Wick said. “I’m still in that mindset of wanting to take it to a vote.”
He also said the sales tax rather than the tab fees would mean nearly have of the funds would come from people outside of the city.
This topic has been heavily discussed through council, and in 2019 the city estimated they would need to spend $16 million annually to preserve and maintain roads.
According to the city those numbers have been used in discussion, but they expect the costs next year to be greater than that due to declining pavement condition, inflation, and increased project costs.
Since 2018, the city has been able to provide eight million dollars annually by using the local street wear fee, real estate excise taxes, telephone utility taxes and fuel tax funds.
Starting in 2019, they had to begin transferring surplus general fund revenues for street maintenance. Those transfers have gradually increased since then, and are approximately $4.6 million in the 2024 budget.
It is important to note that these transfers are made of surplus reserves and can’t be counted on every year.
If council were to make the transfers recurring items, the general fund would no longer show recurring revenues that exceed expenditures. That is why the benefit district has been formed.
Councilman Tim Hattenberg said it is simply time to make a decision and the city will need to “increase fees or reduce the levels of service provided.”
Using the general fund in this matter also means there is less money available for other projects the city would like to undertake.
Councilman Arne Woodard said that nobody really likes vehicle tabs, but the city has to come up with funding somehow. He said if they can free up money in the general fund, then those funds can be used for things like police.
“You all want more police and you want better roads,” Woodard said. “Well that costs money.”
“I think it’s time for us to be leaders and do our job.”
Matthew graduated from West Virginia University-Parkersburg in 2011 with a journalism degree. He's an award-winning photographer and enjoys writing stories about people.
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