Blaine City Council contemplates a sales tax hike to pay for transportation projects

By Stefanie Donahue

Blaine may be the next to join myriad cities throughout Washington with a special taxing district used solely to fund transportation projects for streets, sidewalks and trails.

At a special meeting on December 5, city staff recommended the council move forward on a plan to form a Transportation Benefit District, which would allow for an increase in sales tax by up to .2 percent. The tax is estimated to generate $200,000 annually to fund transportation projects for 10 years.

A simple majority of voters would have to approve the tax hike and city staff are hoping to see it on the ballot as early as the April 2017 special election. During the special meeting, Blaine City Council voted 7–0 to contract Liz Loomis Public Affairs to kick off public outreach efforts.

“I’m not a fan of taxes, as probably most of you are not,” said Eric Davidson, a member of Blaine’s public works advisory committee. “I’m not a fan of more government in my pocket, but I really like this because this is monies that come directly to the city of Blaine, specifically directly to public works to work on my roads and your roads as well as our trails.”

A city or county ordinance can form a Transportation Benefit District, and its boundaries can encompass all or portions of land within its jurisdiction. If established, the city council would maintain the role of the district’s board and would be responsible for approving transportation projects, among other things.

Transportation districts can generate funds through a number of means including a sales tax, vehicle licensing fees, fuel taxes, bonds and other fees, however, increases to the sales tax and vehicle licensing fees are most often utilized. An increase to the sales tax requires a simple majority by voters, while a hike to vehicle licensing fees requires only board approval if it’s

under $50 in Washington state.

Public works director Ravyn Whitewolf thinks increasing Blaine’s sales tax is preferable. In all, Blaine receives less than 1 percent of the current 8.5 percent sales tax that is remitted to the state. Whitewolf estimates that 50 percent of sales tax funds generated in Blaine comes from tourists while an estimated 35 percent is derived from P.O. boxes.

The tax hike wouldn’t leave the entire burden on Blaine residents and neighboring Bellingham, Lynden and Ferndale are already paying the extra .2 percent, she said.

This all comes with the city’s recent approval of the 2017 budget, which acted as a reminder that transportation projects are in need of a stable funding source.

Blaine voters approved a 10-year property tax levy for street maintenance and improvement back in 1996. The city soon followed by issuing a 10-year bond  that amounted to $6.8 million with interest – it’s set to be paid off in December 2017.

While the estimated $200,000 per year generated through the prospective tax increase seems minimal in comparison, Whitewolf said it will be used to leverage grant funding to stretch local tax dollars.

Whitewolf said the transportation district will also help to address needs identified by residents out of the city’s recent strategic economic initiative. Out of the 933 responses derived from citywide surveys, trails and streets were near the top of the priority list.

“Good transportation links are critical to economic development, which attracts and keeps businesses in Blaine,” Whitewolf said in a statement released December 19. “It also welcomes people for shopping and tourism, which generates revenue for other city services.”

City staff will present an updated list of transportation project priorities to the city council in January, Whitewolf said.

Members of the public are invited to chime in on the discussion by emailing TBD@cityofblaine.com. Whitewolf is also accepting letters at 1200 Yew Avenue, Blaine, WA 98230.

To learn more, visit ci.blaine.wa.us/903/Transportation-Benefit-District-TBD.