Street utility tax proposed

Spokane and Spokane Valley city officials hope voters will approve a new tax to patch the potholes in their street budgets.

A vehicle registration fee, authorized last year by the Legislature, is the most likely possibility in the short run. But some city officials think a “street utility” may be their best bet.

A street utility would mimic water and sewer utilities in requiring residents and businesses to pay according to how much they benefit from city streets.

People would pay one fee for access to the street system and another fee based on how much they use the system, Spokane City Councilman Al French told his Spokane Valley counterparts last week.

The idea won support from Mayor Rich Munson and other City Council members, but the council wasn’t ready to put all its eggs in that basket.

Despite some misgivings, the council directed City Manager David Mercier Tuesday to prepare a proposal in which voters could be asked to approve an annual vehicle registration fee up to $100.

Part of Mercier’s task is to recommend an amount.

“We stand ready to work with the county and the city of Spokane to develop a regional program if they desire to do so, but we will move on a parallel course of our own,” Mayor Rich Munson said.

Spokane Public Works Director Dave Mandyke said in an interview that Spokane officials also are pursuing a vehicle registration fee while they try to persuade the Legislature to authorize street utilities. They favor a countywide approach, he said.

Spokane County Commissioner Todd Mielke said city and county officials are considering a “big tent” meeting this spring or summer to discuss regional transportation problems. Several planning sessions probably will be needed to arrange the meeting, he said.

Commissioners have been interested in a countywide vehicle fee to satisfy pressure from state officials for local money to match state and federal contributions to the North Spokane Freeway.

But Mielke thinks the need is not limited to the partially constructed freeway.

“I just see a theme where more and more the state and federal governments are saying, ‘We need local participation,’ ” Mielke said.

Like some city officials, though, Mielke wants any new tax to support purely local street work in addition to regional projects.

“We have the same maintenance and operation needs as everyone else,” he said. “We see our revenue streams declining. … We’re all struggling to figure out a solution.”

A street utility wouldn’t help the county, though, because counties aren’t allowed to collect utility taxes. And the “political reality check” is that voters will rebel if asked to support too many new transportation taxes, Mielke said.

Under the city of Spokane’s proposed street utility legislation, property owners would pay a “base fee” for the benefits they receive from public streets whether or not they drive a vehicle.

Residents, businesses and other organizations – including governments – would pay a “trip fee” based on how much traffic they create.

Spokane Councilman French said the proposal – adapted from a system used by Tualatin, Ore. – overcomes a fatal flaw in similar legislation previously enacted by the Washington Legislature.

He said the state Supreme Court overturned the law when Seattle imposed a flat fee on each parcel of land because the fee wasn’t linked to street use. But the Spokane proposal would substitute a fee based on the International Traffic Engineers manual.

The manual, a standard reference for municipal governments, lists the average number of vehicle trips generated by various users. For example, French said, a 2,000-square-foot light industrial building would generate 15 trips a day while a home would generate 10.

French said the Spokane City Council decided unanimously in 2003 to try to get the Legislature to fix the law, but “we didn’t do a very good job of it.”

He said the council ran into political opposition from the Association of Washington Business, the Washington State Bankers Association and a restaurant association.

The business association objected that members in Interstate 5 corridor already gave their “first-born child” in business-and-occupation taxes, French said.

He said the banking and restaurant associations complained because drive-up bank windows and restaurants have high traffic.

This time, French said, Spokane and other cities hope to allay concerns by limiting the legislation to border communities that don’t use B&O taxes and by giving a discount for certain kinds of trips.

The new proposal would distinguish “destination” trips, such as to a hospital, from “passer-by” trips to a bank or a restaurant or a grocery store on the way home from work, French said.

The proposal also calls for a requirement that street utility money be used only for street maintenance.

A street utility would be more dependable than bond measures and cheaper because finance charges would be eliminated, French said.

A street utility would be better than a vehicle registration fee because the rate could be adjusted as needed to keep up with inflation, French said. Also, each city could establish its own ratios for dividing the burden among residents, businesses and other organizations.

In the example French showed Spokane Valley council members, residents would pay 45 percent of the base fee and 26 percent of the trip fee – for an overall share of 36 percent.

Residents would pay $10.35 a month for each car they have in the example French presented.

Spokane Valley Councilman Steve Taylor objected that businesses would pay a much larger share with a street utility than with a vehicle registration fee.

French said Spokane Valley could adopt a more business-friendly formula, but he reminded Taylor of the “political reality” that “businesses don’t vote.”

In Spokane’s case, French said, even a maximum $100-a-year vehicle fee would be $20 short of what the city needs to keep its streets in good repair.

Munson and Councilman Bill Gothmann supported the street utility legislation, but were wary of French’s prediction that it could be in place by August 2009.

“I do think the street utility tax sounds like a superior product in the long term, but we can’t act on a pig in a poke,” Gothmann said. “We have to act on what we have in our hand now.”

Munson said Spokane Valley can’t wait because it faces a deficit next year for routine street work, such as snow removal, and already has no money for major repairs estimated to cost $4 million a year.