SEDRO-WOOLLEY — Sedro-Woolley city officials are preparing for a future without transportation funding after voters approved Initiative 976 in the November election.
Like 63 other communities in the state, Sedro-Woolley will likely lose its local $20 car tab fee, which is its main method of funding road repairs and transportation projects.
The initiative, which set a statewide $30 car tab fee for most vehicles and eliminated several transportation funding sources, was approved by about 53% of voters.
The state Office of Financial Management estimates over the next six years this means a $1.9 billion loss for state transportation funding and a $2.3 billion loss for local governments.
“We really can’t go long without a solution,” Sedro-Woolley City Supervisor and Attorney Eron Berg said.
Implementation of the initiative is on hold pending the results of a lawsuit, but Berg said the city can’t afford to just wait and see what happens.
If the initiative is upheld, any money collected during this period will have to be returned to residents, so that money cannot be spent. Berg said staff and elected officials are acting as if the initiative is already in effect.
Director of Public Works Mark Freiberger said the city’s car tab fee, which has been in place since 2016, brings in about $200,000 a year.
About half of this is devoted to repairing high-traffic arterial roads, and half is used as matching funds to secure grants for larger projects, he said.
Berg said losing this funding source means one of the two maintenance projects planned for 2020 — repairs to Wicker Road — likely won’t happen. He said repairs to Jameson Road will probably still be funded by moving money around.
Without a funding source dedicated for arterial road repair, he said residents can expect fewer road projects after 2020.
“We’re going to see a very different program in 2021 if something doesn’t change,” Berg said.
Money originally going to local roads will have to be shifted to maintaining arterials, meaning less frequently-used roads won’t get the attention they have in the past, Freiberger said.
In terms of more expensive projects, he said the city will have to do less.
“We’ll be able to do one major project per year,” Freiberger said.
He said, generally, the city is required to match grants at 15% of their value. Without matching funds, the city will be less attractive to those who award the grants.
Mayor Julia Johnson said she hopes the Legislature will step in this year to negotiate a fix for cities such as Sedro-Woolley, perhaps offering state money to compensate for lost local revenue.
However, Berg and Freiberger said they are not optimistic, saying any Legislature response to I-976 will probably be focused on state roads or state projects.
Berg said any solution to make up for lost revenue is likely to come from city governments.
He said the city could ask voters in November to increase the city’s sales tax by 0.2% for pay for transportation projects. This is how Mount Vernon and Anacortes fund transportation projects.
Alternatively, he said the city could look at a combination of increases to utility taxes and property taxes.
Freiberger said the City Council will be presented with these options, and he hopes they’ll start a serious conversation soon.
Johnson said the decision to ask the voters to consider another tax increase — within a year of implementing a voter-approved property tax increase to pay for more police officers — will have to be carefully considered.
“We like to be a city that prides ourselves on not raising taxes,” she said.