PORT ANGELES — The Aug. 1 primary ballot has its first contestant: a sales tax increase.
The Port Angeles Transportation Benefit District board, which consists of Port Angeles City Council members, Tuesday unanimously approved offering the city’s more than 12,300 voters the option of approving, in the Aug. 1 primary election, a 0.2 percent retail sales tax increase to fund street projects.
If approved, it would add 2 cents to every $10 spent on taxable sales beginning Jan. 1, 2018, for the next 10 years, after which the tax increase would expire or need to be renewed by voters.
It would increase the sales tax within the city limits — not all of which goes to the city — to 8.6 percent.
Council members approved formation of the TBD board April 4 with the intention of putting the measure on the ballot.
Clallam County Auditor Shoona Riggs said Wednesday the council’s action was the first official indication that anything will be on the election ballot.
Riggs said the sales tax ballot measure will cost the city $40,000 to $45,000 if no other measures or candidates are on the primary ballot and less if there are other races or measures not confined to the city limits.
Filing week for the Nov. 7 general election is May 15-19.
If approved, a 0.2 percent sales tax would add $40, for example, to the price of a $20,000 car.
The sales taxes for that same car are now 8.4 percent and total $1,680.
The tax increase would raise $600,000 to $700,000 annually for transportation improvements, Public Works and Utilities Director Craig Fulton said in a memo to the TBD board.
“The general fund has reached a financial position where it can no longer support the proper maintenance and repair of city streets through substantial capital repair projects,” Fulton said.
“A sales tax would ensure that all users of city streets contribute to their maintenance, including tourists and all county residents who shop in Port Angeles.”
City Manager Dan McKeen told board members the sales tax revenue will add to — not replace — existing funds for street maintenance, repairs and construction.
The sale tax revenues “will not cure all of our woes,” Councilman Lee Whetham added.
Fulton said the city’s 120 miles of streets have a poor Pavement Condition Index rating, while 40 miles of alleys have a very poor rating.
The city street fund at its present level covers only spot repairs for failed sections of roadway, he said.
“There is no sustainable street maintenance solution without a TBD,” Fulton said.
The board will review potential projects for funding in 2017 later this summer, McKeen said.
The board will not hold regularly scheduled meetings like the city council does but will operate under the council rules of procedure.
Its next meeting is at 4 p.m. July 18 at City Hall, 321 E. Fifth St.
Before they changed roles at 6 p.m. Tuesday for the council meeting, TBD board members selected Deputy Mayor Cherie Kidd as board chairwoman and Councilman Michael Merideth as vice chairman.
Council members have held up Sequim’s Transportation Benefit District as an example of how well the 0.2 percent sales tax works.
Sequim’s TBD was established in 2008 with a tax increase approved by voters that began in 2010.
Sequim City Manager Charlie Bush said Wednesday it will generate an estimated $600,000 in 2017, about half the budget for street department maintenance, operations and capital projects that have lacked funding since the 1999 repeal of the Motor Vehicle Excise Tax.
About $100,000 a year is used for safety and maintenance costs and the rest for capital expenditures, with a large portion covering Americans with Disabilities Act-related projects to accommodate the city’s senior population.
“The discussion for us is, more than half the sales in Sequim come from people who don’t live in Sequim,” Bush said.
“This is essentially a fee that is applied to people directly related to their retail activity in our community that helps us to make sure they have roadways and our community has better roadways as well.
“This is a way to help us offset some of the cost of their impact on our road system.”
Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 55650, or at [email protected].