Community Government
Gig Harbor Council considers raising sales tax via its Transportation Benefit District
The Gig Harbor City Council will consider raising the sales tax inside city limits by .1% to pay for street maintenance. The council heard the first reading of an ordinance to do that on Monday.
The new ordinance, which will be on the council agenda on Sept. 23, would also change the ways in which money raised by the city’s Transportation Benefit District can be used.
The city established the TBD in 2018 to pay for transportation projects, and voters approved a .2% sale tax increase the next year to fund new transportation construction. But the money could not be used for street maintenance.
As a result, the city pays for most pavement maintenance and street repair projects using General Fund money, Public Works Director Jeff Langhelm said. But that revenue source has dwindled.
“We used to do street projects every two to three years. Now it’s every five years,” Laghelm said. “And in the end, it costs more because deferred maintenance always costs more.”
The new ordinance would allow the city to change how it uses TBD funds. It also would up the sales tax by one cent on every $10 spent. If approved, the new sales tax rate would go into effect on Jan. 1, 2025, and would be in place for 10 years.
City revenue situation
The city sales tax rate is already going up after voters approved a public safety sales tax increase in the August primary election. That one-tenth of 1 percent increase supports the general fund. At least one-third of proceeds from the increase must go to the city Police Department.
The city expects the public safety sales tax to bring in about $1 million a year, helping ease a general fund budget crunch previously projected at $2 to $3 million starting next year.
Earlier this year, city voters overwhelmingly rejected a proposed property tax increase. After voters rejected the property tax, city leaders identified the TBD as a possible vehicle for bringing in more revenue.
State law allows cities and counties to form Transportation Benefit Districts to raise revenue and fund transportation projects. Gig Harbor is among at least 110 cities and towns in Washington with a TBD, according to the Municipal Services Research Center.
Fees increase
The council also approved a new fee schedule, raising fees on everything from the cost of renting a city-owned meeting space to building-permit fees to applications for revising the comprehensive plan.
City staff told the council the new fees would recoup the costs of staff time used to process applications, issue public notices, conduct site visits and other tasks.
The new fees will go into effect Nov. 1.
Other business
The council declined to pass a motion opposing a carbon tax initiative that will be on the state-wide ballot in November. The majority of council members agreed that the city should not take a position on state initiatives.
The carbon tax ballot measure, Initiative 2117, would repeal a 2021 law that established the state’s cap and invest program to reduce greenhouse gas emissions. The 2021 law sets emissions limits on major polluters, like oil refineries and utilities, and forces them to buy allowances at auction for each metric ton of their air pollution. Initiative supporters want the law repealed, arguing it raises costs to consumers.
The council also nominated Councilmember Ben Coronado for the Pierce Transit Board. The position represents the cities of Gig Harbor, University Place and Fircrest. The Pierce County Council will select Transit Board members on Oct. 14.
Future meetings
The Gig Harbor Planning Commission meets at 5:30 p.m. Thursday, Sept. 19, in the Civic Center on Grandview Street, as it continues its update of the city’s comprehensive plan. The commission reviews the Transportation Element of the plan. The next city council meeting will take place Sept. 23. The council cancelled its Sept. 12 study session.