Port Townsend creates transportation district with taxing power

Members to consider putting sales tax to voters in November

PORT TOWNSEND — The Port Townsend City Council voted to create a new Transportation Benefit District for the city and said they’d like to put a potential increase in sales tax for street maintenance before voters on the November ballot.

In a unanimous vote Monday evening, council members voted to create the new body — which would be made up of council members but have its own meetings — with the aim of generating additional revenue specifically for streets. Council member Aislinn Palmer was absent from Monday’s meeting and did not vote.

“We hear loud and clear at the staff level that streets are not in great shape in Port Townsend,” said Public Works Director Steve King.

Unlike other taxes, revenue generated by the Transportation Benefit District, or TBD, must be used on streets, King said, which includes construction, maintenance and administration.

“One of the biggest problems municipalities have is if they raise property tax for streets, pretty soon other pressures start to remove those property taxes from the streets,” King said.

There are 110 cities in Washington that have created TBDs, King said, and although they have several revenue-generating options at their disposal, the most frequently used are a sales tax of between 0.1 percent to 0.3 percent or vehicle license fees.

The district could enact vehicle licensing fees of up to $100 with a public vote or $20 without one. Those fees could be raised to $40 and then $50 without a public vote if the fee has been in effect for two years in each step.

A sales tax of 0.1 percent could be enacted by the district without a public vote, and up to 0.3 percent with a vote. The district would also have the option of enacting the 0.1 percent sales tax and then later increasing that to the full 0.3 percent with a vote of the people.

If the vote passes, the revenue from the sales tax won’t be available until the second fiscal quarter of 2024, said City Manager John Mauro, but if the district decides to enact a 0.1 percent tax with a vote, that money would be available at the start of the year because the tax would go into effect sooner.

At the meeting, council members expressed support for putting a 0.3 percent sales tax vote before voters on the November ballot.

“I would support going to the voters with the 0.3 percent,” said council member Owen Rowe. “The amount of revenue we would miss is not zero, but it’s not a huge amount. It’s less confusing for the voters. It’s less confusing for business owners.”

Mayor David Faber said enacting a 0.1 percent tax without a vote and then asking for an additional 0.2 percent tax could be confusing to voters and create backlash, which could potentially fuel a “No” vote on the ballot.

“Keeping in mind if the 0.3 percent fails, we could do the 0.1 percent in the future,” Faber said.

The district will have its first meeting on Aug. 1, which is also the last day to submit initiatives for the November ballot. Council members will decide at that meeting whether or not to put the sales tax before voters.

Three people gave public comment on the proposal, with two in favor and one opposed. Port Townsend resident Rebecca Kimple, who spoke in person at the meeting, called the TBD “an incredibly reasonable thing to do.”

A letter submitted anonymously criticized the council for increasing taxes.

“Good government officials find solutions by eliminating unnecessary spending, working within their budget and focusing on their mandates instead of feel-good things that rarely work and become unsustainable,” the letter said.

Council members and staff said at the meeting there are several demands on city funds, some of which are mandated by state or federal governments.

“I think it’s probably important to recognize we have a state mandate that we have to provide police service. We have to provide a certain level of sewer, water, et cetera,” said council member Libby Urner Wennstrom.

“You can’t take money that you’re collecting on your water utilities and use it to fill in potholes,” she said.

According to meeting documents, a sales tax of 0.3 percent would generate an estimated $800,000 annually for the city’s streets, and a 0.1 percent tax would generate $250,000. A vehicle license fee of $20 would generate $186,000 annually.

Meeting documents state the city is looking at roughly $980,000 in annual street costs.

Citywide pavement repair, rehabilitation and preservation of the street system are estimated at $500,000 per year, and citywide sidewalk and Americans with Disabilities Act construction, upgrades and repairs are estimated at $100,000 annually.

Citywide gravel road repair, rehabilitation and paving are estimated at $50,000, and traffic calming is estimated at $30,000 annually.

Street improvement projects under the city’s six-year transportation improvement plan are estimated at $300,000 a year, money which is able to be leveraged to acquire about $1.5 million in state grants for streets.

King noted that revenue raised by the district could be used to leverage state grants.

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Reporter Peter Segall can be reached at peter.segall@peninsuladailynews.com.

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