Richland ‘tax cut’ will double money for streets by killing unpopular car tab fee
AI-generated summary reviewed by our newsroom.
- Richland expects to replace its $20 car tab fee with a 0.1% sales tax in April 2026.
- New tax will raise $2.25M annually, doubling revenue for street maintenance.
- City aims to shift road upkeep costs to all shoppers, not just local vehicle owners.
Richland will abandon its detested $20 car tab fee and replace it with a new sales tax that will double revenue to the city.
The change is tentatively expected to go into effect April 1, 2026.
The city council is likely to approve the change after it gave the idea its enthusiastic support at its Sept. 16 regular meeting.
The matter returns for a vote at a special meeting set for 6 p.m., Sept. 23, in the council chambers of city hall, 625 Swift Blvd.
Under the change, Richland will stop collecting registration fees from city residents for their vehicles and replace it with an 0.1% sales tax — one cent on a $10 purchase, said Jon Amundson, city manager.
The change will raise the sales tax rate in Richland to 8.8%, the same as Kennewick and slightly lower than Pasco’s 8.9%.
Richland casts the move as a tax cut for Richland residents that will bring in new revenue by spreading the cost of road maintenance to everyone who shops in the city.
The city’s population of 64,000 residents swells by more than 26,000 during the day — people who use local streets but aren’t assessed the cost to keep them drivable.
Amundson said Richland is modeling its approach on Kennewick, which adopted an 0.1% sales tax increase last fall to pay for road maintenance.
“Kennewick funds it’s (transportation projects) with sales tax. When our residents shop in Kennewick, we help fund Kennewick streets,” Amundson said.
Pasco too is considering levying car tab fees or raising sales taxes to support its own street maintenance, a plan that has drawn fire from Tim Eyman, the anti-tax activist behind Washington’s $30 car tab initiative and other reforms.
650 miles of Richland roads
Richland needs about $4.5 million a year to maintain its 650 miles of road in goodish condition. It aims to keep pavement at level 70-75 on the 100-point Pavement Condition Index.
Car tabs cover only $1 million. City reserves and real estate excise taxes cover the rest.
The proposed new sales tax will bring in $2.25 million and curb the need to dip into the same funds that cover police, fire, planning, parks and other critical services, Amundson said.
In 2017, Richland’s then city council voted unanimously to implement the unpopular $20 car tab fees.
Six of the seven members have since left the council or been voted out of office. The seventh, Mayor Pro Tem Sandra Kent, will leave the council in December after losing her reelection bid in the August primary.
At the time, the council said the fees were needed to support the city’s $4 million share of the cost to construct the $38 million Duportail Bridge and to provide a dedicated revenue stream to maintain streets.
The car tab fees weren’t just unpopular, they proved a poor investment compared to sales taxes.
Amundson said Richland has collected $6.2 million in car tab fees since the program began. That’s $5.4 million less than it would have collected if it had chosen to raise sales taxes instead of car tab fees.
Who pays
Car tabs are paid only on vehicles registered within the city of Richland. Richland is one of 120 Washington jurisdictions that levy some sort of fee or tax to support transportation projects. More than half rely on sales taxes rather than car tab fees.
Amundson calculates that the overall tax burden will drop for most city residents under the sales tax approach.
The median household in Richland has about $105,000 per year and spends $6,442 on taxable items. The 0.1% tax will cost $6.44 a year, or 84% less than the $40 they’d pay in car tabs for two vehicles.
Nonvehicle owners would pay more in sales taxes without the benefit of lower car fees. City officials say the proposal is fair because everyone needs roads, regardless of if they drive.
“This is how the food gets here,” observed Councilman Kurt Maier.
Sales taxes in contrast are paid by everyone who buys taxable goods or services in Richland, whether it is tourists in town for the Ironman competition or shoppers at the new Costco Wholesale or the CarMax dealership under construction on Tapteal Drive.
The city’s seven elected leaders endorsed the change at their Sept. 16 business meeting. They will vote on a resolution making it official around the start of 2026.
Richland vehicle owners will continue to pay the car tab fee until the expected change takes effect next spring.