Transportation district gains little ground in Spokane Valley

After the Spokane Valley City Council listened to a staff presentation on transportation benefit districts at its meeting Tuesday evening, several members said that they hoped they wouldn’t need to create such a district or impose any new taxes.

It was a question posed by Councilman Ed Pace a couple of months ago that led to staff preparing the presentation.

Deputy City Attorney Erik Lamb explained that a transportation benefit district is an independent unit much like a public facilities district, and it has the ability to issue a tax as a way of funding transportation improvements.

In Spokane Valley, road maintenance is funded by a tax on telephone lines, which is dwindling as fewer residents have land lines. The city has been investigating other options to fund streets.

Lamb said a license tab fee – like the $20 tax implemented in Spokane in 2011 – is the most common way for a transportation district to raise money.

“A fee up to $50 can be imposed without a vote of the people,” Lamb said.

If a transportation district is formed and a license tab fee applied, it would have to start at $20 for two years, then $40 for two years before it could reach $50.

At $20, Lamb estimated the city could collect around $1.4 million. At $50, the license tab fee would raise almost $3.6 million.

Lamb said a transportation district could apply a sales and use tax, but that would have to be voter-approved.

“Lodging couldn’t be taxed because that’s already at the allowed 12 percent,” Lamb said. He added that a property tax increase could also be brought forward by the transportation district but would have to be approved by voters.

All three kinds of taxes could be applied at the same time, with the revenue directed to the road fund, Lamb said after questions from Councilman Sam Wood.

A transportation district would be formed by passing an ordinance, which requires a public hearing.

Pace cautioned against jumping to conclusions.

“We have this report tonight because I asked for it, not because I wanted to do this,” Pace said.

Deputy Mayor Arne Woodard cautioned against taxing businesses and Valley residents – a license tab fee would apply to all vehicles with license tabs, including commercial trailers and motorcycles.

“Let’s be careful,” Woodard said.