Normally tax-wary Spokane Valley may adopt a vehicle tab tax

The Spokane Valley City Council wavered Tuesday on the best way to move forward with a funding source for its newly created Transportation Benefit District, but in the end voted to advance an ordinance setting a $20 car tab fee to a second and final reading later this month.

For more than a decade, city staff have said the city does not have enough funding to pay for street preservation projects. The city spends about $8 million a year on such projects, but staff have recommended doubling that amount to stay ahead of needed repairs. A landline telephone tax that once collected about $3 million a year for road projects has dwindled to about $900,000 a year as people give up their landline phones.

Each year, the council has voted to take money from the general fund to pay for needed road projects.

Tab fees are collected each year from residents when they renew their car tabs. Other jurisdictions in the area, including Spokane, have car tab fees in place.

Deputy city manager Erik Lamb said the council has the authority to enact a car tab fee without putting it to a public vote. Even if the council did decide to put it on the ballot, it would only be an advisory vote.

“It is a tool the state has provided to provide dedicated funding for transportation,” he said.

A $20 fee would collect an estimated $2.7 million a year, but the city can’t start collecting the fee until six months after it is approved, Lamb said. The city wouldn’t accrue enough money to spend until 2025, he said.

Only one person in the sparse crowd spoke about the issue. Resident Dan Ellison said he believed the issue should be put to a vote. “If you don’t put this to the people, you won’t get re-elected,” he said. “You do not need to keep taking money from the citizens of this town.”

Councilwoman Laura Padden said she didn’t like the idea of a tab fee because it would only be paid by residents, not visitors. It would also impact lower-income people more, she said.

“It’s not a good time to raise taxes,” Padden said.

Councilman Ben Wick noted that the city also has the option to impose a 0.1% sales tax increase, but said he would like the voters to have a say.

“I think we should try to put together a plan to take to voters,” he said.

Councilman Arne Woodard argued strongly for approving a car tab fee, even though he said he doesn’t particularly like the fees. The city, however, needs to do something, Woodard said. He said he doesn’t believe a public vote is necessary.

“We’re elected for a reason,” he said. “The public wants us to make decisions. I think it’s time we be leaders.”

He urged his fellow council members to do the job they were hired for.

“Where are you going to get the money?” he said. “It isn’t there. We need additional revenue for this particular item. We had better get on the ball and do something about these roads. Some of the neighborhood roads are 50 years old.”

Councilman Tim Hattenburg and Mayor Pam Haley said they see the car tab fee as replacing the shrinking telephone tax. Haley noted that people have been asking for more services, including more police officers, but don’t want to pay more in taxes to fund those services.

“I don’t like taxes either, but we’re kind of challenged,” she said. “The telephone tax is, for all intents and purposes, gone.”

Haley said she’d rather go with the 0.1% sales tax, and councilwoman Brandi Peetz said she agreed. The council briefly seemed hung up on whether to switch the funding to a sales tax instead, but then quickly voted to move the proposed ordinance forward to a second reading with the car tab funding included, with Wick, Padden and Peetz voting no.