(The Center Square) – The Yakima City Council passed a 0.1% sales tax hike without voter approval on Tuesday and replaced a $20 annual vehicle registration fee that supports local transportation projects.
Local policy requires the city to hold a hearing whenever a change in the scope, schedule, or budget of a transportation benefit district (TBD) project results in a cost increase of 20% or more. Community Development Director Bill Preston said that much of their TBD project list now exceeds that 20% threshold.
The most expensive project on that list is renovating 6th Ave, which could cost taxpayers $8.3 million, or up to $15.3 million if the city were to replace the old trolley tracks. The current $20 car tab fee puts $1.6 million annually behind the TBD, and the new sales tax will increase that to $2.7 million.
“I know it sounds crazy passing a sales tax. It really does, but this is a different approach to actually funding this,” Mayor Matt Brown said. “Long term, I think this is a better pathway for our community.”
He and the rest of the council say the sales tax will be less burdensome on city taxpayers. Paying just one $20 car tab would generate the same amount of revenue as $20,000 in taxable sales. Replacing it with a sales tax shifts the burden onto people passing through rather than targeting residents alone.
Voters have passed three initiatives to cap annual car tab fees at $30, most recently in 2019, but the courts have blocked them. CARFAX now reports that about 600,000 cars are driving with expired tabs.
The council unanimously approved motions to replace the $20 car tabs, and voted 6-1 to prohibit the use of TBD sales tax funds for trolley infrastructure. The 6th Ave project will still proceed alongside the 20 other TBD projects slated for the next decade, but the decision will save taxpayers $7 million.
“It’s not going to be a money maker, no matter how we look at it, and to dedicate millions of dollars, whether the city procures it from other sources or not, to me, is totally irresponsible,” Councilmember Rick Glenn said. “I love the idea of the trolleys. I think it’s a nice idea, but it’s not affordable.”
The decision leaves it to Yakima Valley Trolleys to secure funding from donors or other sources.
Tuesday’s vote also shortened the timeline for completing all projects from 2043 to 2036. Several are scheduled to start simultaneously over the next five years. The TBD list totals $34.4 million.
The Pasco City Council voted Tuesday to establish its own transportation benefit district after months of debate over whether to impose a sales tax or a $20 car tab fee. The Richland City Council replaced its car-tab fee with a sales tax last November for similar reasons, amid transportation funding gaps.
Pasco hasn’t set a funding mechanism yet and may put the sales tax on the ballot for voters to decide.
Bronson Faul, senior assistant city attorney, said that Yakima’s sales tax should take effect next July.
“$30 car tabs has been brought into Washington state about 12 times, and has been passed a million times,” Brown joked in reference to initiatives to cap annual car tab fees, “We’re taking our piece out of their car tabs altogether, $20, and I think that’s a huge win for our community, and maybe it sends a message to Olympia, probably not, but at least we can say we did our part at cutting car tabs.”
