The City’s Transportation Benefit District (TBD) Board unanimously approved a motion on Monday to authorize the City to prepare a ballot proposition that will raise the sales tax by 2/10 of a percent to pay for transportation improvements.
The only dedicated funding source for paving comes from the TBD’s $20 license tab fees, which generates $500,000 per year in funding. City staff told the Board during a June 30 meeting that the City needs an estimated $3.5 to $4.0 million each year in order to keep its paving/streets at an acceptable level.
City staff estimated that the 0.2 percent increase in sales tax would bring in approximately $4 million annually. If passed, the tax increase would only be in place for 10 years and would end after that.
In urging his colleagues to support the motion, Board member Van AuBuchon said that his primary reason for supporting it was that “we are giving the citizens a say. I think that is an important thing in any democratic process … is that at every opportunity we allow citizens to govern themselves.”
Board member Benjamin Goodwin supported the idea of a sales tax increase over an increase in car tab fees because it spreads around the cost to everyone who comes to visit Lynnwood during the day rather than just the residents of the City.
Board member Ian Cotton noted that while Lynnwood has a population of about 36,000 the population swells up to 100,000 during the day.
“Sales tax more justly represents the usage of the infrastructure that we own as a City,” Cotton said. “We own the roads but everybody wants to come and use them.”
Before approving the motion, the Board voted 5-2 to defeat an amendment by Board member Sid Roberts, who proposed a 1/10 of a percent increase in the sales tax rather than the 2/10 of a percent increase that the Board previously had discussed. Roberts was concerned that if the sales tax increase was passed by the voters then Lynnwood would have the dubiously distinction of having the highest sales tax in the state.
Mill Creek currently has the highest sales tax at 9.6 percent, according to City staff. A 2/10 of a percent increase in Lynnwood sales tax would mean shoppers would pay 9.7 percent.
“I’m just a little worried that No. 1, it’s too much,” Roberts said of the proposed 2/10 of a percent increase. “The second thing I’m worried about is that it might jeopardize whether it (ballot measure) passes or not.”
Roberts made it clear that he supports the transportation improvements the sales tax increase would fund, but that his concern was that by proposing a 2/10 of a percent increase, the City was running the risk of not getting any increase from the voters.
AuBuchon was the only Board member besides Roberts to support the amendment.
Board member M. Christopher Boyer said that if the Board adopted Roberts’ amendment then “we’d find ourselves in the position of not solving the problem that we set out to solve and that seems to me to be illogical and undesirable. … 1/10 of a percent doesn’t solve the problem.”
Said Cotton, “We need to fix our roads. We need to get in a sustainable pattern of road repair and I think this is the fair way to do it.”
Roberts noted that Marysville has a sales tax rate of 8.6 percent and that consumers contemplating a big ticket purchase, such as a new car, likely would consider driving up north to avoid a possible 9.7 percent sales tax rate in Lynnwood.
“There is some risk in my view, not only to not passing, but also some risk to our economy,” Roberts said.
Board President Loren Simmonds said that if the sales tax increase passes, the City’s General Fund will benefit.
“If this does, in fact, (pass), it will have a positive impact on our General Fund,” Simmonds said. “We have to dip into the General Fund because we don’t have enough money to take care of our roads.
-By David Pan