Richland could hit car owners with a $20 license surcharge beginning in 2018.
City executives confirmed the long-standing plans to establish a “Transportation Benefit District” funded by an increase in local license tabs in a recent meeting with the Tri-City Herald editorial board.
If approved by the elected city council, the new fee would apply to an estimated 40,000 vehicles registered in the city of Richland and would raise about $850,000 per year.
City leaders say they need the money to help finance construction of the Duportail Bridge and to step up preventative maintenance of deteriorating streets.
The new license tab fee would support annual debt payments of about $340,000 on a $4 million bond — the shortfall the city is currently facing in its bid to build a $38 million bridge across the Yakima River at Duportail Street.
The balance of $510,000 per year would augment the $1.2 million Richland spends to maintain street surfaces, an amount it says is insufficient to keep streets up to the standards citizens expect.
The new transportation benefit district and car tab fee can be approved by the city council and do not require voter approval.
Mayor Bob Thompson expects to introduce a motion to create the district and fund it with the license fee at the council’s Feb. 21 meeting. A public hearing is planned as well. The council meets at 7:30 p.m. at Richland City Hall, 505 Swift Blvd.
Faced with financial shortages for both the bridge and street maintenance, city officials sought a funding source that makes sense, Thompson said. The result is a tax on vehicles that supports roads.
The city previously attempted to plug the funding gap for the bridge with a federal Transportation Investment Generating Economic Recovery — or TIGER — grant, but has not been successful.
Pete Rogalsky, public works director, said the city was recently turned down in the latest round of TIGER grants. Richland will continue to apply to the TIGER program and to other funding sources. He is not optimistic the city will prevail in the competitive process. But if successful, Richland will lower the license tab rate to compensate.
‘We’re up against it’
The mayor said time is running out to cement funding for the bridge. The city needs to hire a contractor later this year and begin construction in 2018 to meet its schedule of opening Duportail in 2020.
“We’re up against it,” Thompson said.
He characterized Duportail Bridge as a key to solving commuter congestion on its other arterials.
“We have to calm George Washington Way down,” he said.
Councilman Brad Anderson , first elected to the council in 2011, said the contracting business he works for is fully prepared to pay the new fee on its vehicles.
“It’s a hard thing to ask, but it needs to be done,” he said.
Phyllis Strickler, a former Richland School Board member who regularly attends the city council’s public sessions, was surprised to hear the city is ready to go public with plans for the district and fee.
She doesn’t support the idea.
“Why haven’t they talked about it in public?” she asked. “As a taxpayer, I don’t like it. I don’t want a tax on my car. But then, I don’t like taxes.”
The proposed bridge will extend Duportail Street across the Yakima River from the Queensgate area into the heart of Richland’s traditional downtown.
The project aims to relieve congestion and to reduce traffic on the Interstate 182 bridge. The city has touted the economic benefits of better linkage across the Yakima and better response time for emergencies.
Besides the city’s $4 million bond and $2 million from city reserves, the rest of the project will be funded by $20 million from the state Legislature’s $16 billion transportation package, $7 million from the state Transportation Improvement Board and $2.5 million from the state Department of Transportation.
How do transportation benefit districts work?
Washington law authorizes cities and counties to form transportation districts, which are quasi-municipal corporations that can raise revenue for specific projects.
They are usually funded through vehicle license fees or sales taxes. It takes a vote of the people to raise the sales tax, but the rules are dramatically different for raising vehicle license fees.
Transportation districts may levy up to $20 without a public vote. Once the $20 fee has been in place for two years, it may be increased to $40. Once a $40 fee has been in place for two years, it may be increased to $50.
Richland officials said their proposed license fee would automatically end in 20 years, when bonds to pay for the Duportail Bridge expire.
Transportation districts are widely used in Washington to support roads and related projects.
An estimated 90 cities and counties have created them and nearly 60 have levied new vehicle taxes. Locally, Prosser established a district in 2009 and levied a $20 car tab fee on its residents to fund chip and seal efforts that prolong the life of roads. It rejected a proposal to raise the fee to $30 this year.
Prosser’s $20 fee is expected to generate $90,000 this year.
“It works well for us.” said Dave Stockdale, city administrator.
The Washington Policy Center, a think tank with offices throughout the state, is skeptical of transportation benefit districts. It has criticized Puget Sound area districts for collecting license fees from car owners and using those fees to subsidize mass transportation and other infrastructure, which it calls unfair.
A spokeswoman said she wasn’t familiar with Richland’s plan, but added it’s critical to be clear about the projects that benefit, and to be transparent about creating the new district and tax.
Richland leaders say any money collected from car tab fees will be invested in projects that benefit drivers.
“We’re taking transportation dollars and putting them directly back into transportation,” said Anderson.