Utility Tax Increase + Property Tax Increase (Could) = Fixing Tacoma’s Streets

It's time once again to talk about potholes. To be more specific, it's time again to talk about how we might pay to fix them. You may have heard that Mayor Strickland was working on a proposal to raise funds to patch up Tacoma's troubled streets. This week she's asking her city council colleagues to put a proposal to do that on the November ballot for Tacoma voters. 

The mayor is offering the voters a proposal that would impose a 1.5% tax on utility company earnings, along with a levy lid lift of $0.20 per $1,000 of assessed value over 10 years. If approved by the council this week, here's what voters would see in November:

CITY OF TACOMA PROPOSITION NO. 3

The Tacoma City Council adopted Resolution No. 39236 concerning levy rate and gross earnings tax increases for street improvements. If passed, Proposition No. 3 would authorize the City to increase the City’s regular property tax levy by $0.20 per $1,000 of assessed value for collection for ten years beginning in 2016, and levy an additional 1.5% earnings tax on natural gas, electric, and phone companies for ten years, beginning 2016, to fund street repair, maintenance and safety improvements for residential streets, arterials, and freight access, including resurfacing, pothole repair, pedestrian safety improvements, school crossing beacons, and sidewalk improvements.

Should this proposition be approved?

Yes………….. [ ] No…………… [ ]

The estimate is that this would raise about $130 million ($90 million from the utility tax, $40 million from the property tax), which would be dedicated to the repair and maintenance of Tacoma's residential and arterial streets, freight access points, and bike and pedestrian mobility. The average household could expect an increase of about $3.50 per month on their utility bill, and an increase around $3 per month in their property tax.

The voters have repeatedly identified fixing Tacoma's roads as a key priority. They have also rejected past efforts to raise revenues for the work. We haven't seen an updated estimate on the cost of fixing Tacoma's roads (there is an assessment of road conditions underway, from what we hear), but in 2012 we were hearing estimates in the neighborhood of $800 million. That means this $130 million proposal, while a significant investment in infrastructure, would only begin to address the problems. 

So, will Tacoma voters find this proposal, with its blend of utility and property tax increases, more acceptable than they did Proposition 1's utility tax increase in 2013?


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Comments

JDHasty

They have absolutely no interest in restoring our failed pavement infrastructure.  They are using claim as a way to get their hands on unconstrained dollars that they have already been promising to spend like there is no tomorrow on more capital projects that are at best only tenuously related to pavement restoration.

Do not under any circumstances vote for any new dollars that are not 100% legally constrained.  Furthermore tie any consideration of new revenues to 100% legally binding constraint of all existing transportation revenues as well.  The only way to end the insanity is to take the opportunity to siphon off our transportation revenues away from politicians and bureaucrats. 

Personally I favor creating a Transportation Utility and placing it under TPU’s purview.  Taking any and all incoming revenues that are transportation related and placing them under the Utility and absolutely under no circumstances allowing Kurtis Kingsolver or any City Council member or the Mayor any where near any of them. 

July 14, 2015 at 9:18 am / Reply / Quote and reply

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Nick

Last year our property taxes were raised to pay for improvements to the aquarium. I don’t want my taxes raised every year to pay for pet projects. I am all about fixing the potholes, but not at the expense of it being part of a yearly tax increase. Wonder what they will want to raise my taxes for next year. Voting no!

July 14, 2015 at 10:17 am / Reply / Quote and reply

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JDHasty

Well what they are looking for is funding for pet projects.  I would vote to fund restoring, maintaining and preserving our pavement infrastructure, but this is not what this is all about.  It is the Mayor going on a fishing expedition for a new funding source to fund pet projects out of.  The money she is looking for is not legally constrained and we all know what that means.  History is a good indicator of what the money will be spent on if the Mayor gets her way.

July 14, 2015 at 11:04 am / Reply / Quote and reply

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Engineer

Let me get this straight, the voters of Tacoma will pay for a new aquarium, but not to maintain their own streets???  I suppose this keeps cut-thru traffic to a minimum.  My little Civic could barely navigate some of the streets recently as we drove around to open houses and homes for sale.  I really thought that my car was going to get stuck a few times, it is that bad.

July 14, 2015 at 10:27 am / Reply / Quote and reply

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JDHasty

Well, there is not going to be legally binding constraints on any new revenues…. so at best what you are going to get is pothole patching, chip and cape seal and oil mat streets.  The powers that be want the money to fund a laundry list of new capital projects tat have little or nothing to do with pavement maintenance, restoration and preservation.  The simple fact that they keep coming back with the same old, same old is a dead giveaway.  The only way I would support a new revenue source would be if ALL existing and All new revenues were 100% constrained and that means iron clad language stipulating EXACTLY what constitutes “transportation” revenues and defines transportation revenues, stipulates EXACTLY what these revenues can be programmed, budgeted and spent on and makes it perfectly clear what they cannot be used to fund.  There is absolutely no other way, if it is not done this way the money will be extracted from the citizenry and subsequently siphoned off and pissed down the same old ratholes it has been and twenty years from now the City’s streets will be in no better, and probably worse, shape than they are today.

The new revenue stream would also terminate and all fees or taxes would cease upon any attempt by any bureaucrat or elected official to modify make changes to the language constraining these funds.  If they want to change anything the funding simply goes away and they can put their new proposal on the ballot in it’s place.

July 14, 2015 at 11:01 am / Reply / Quote and reply

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Jesse

I have several questions:

1. Only $120m?  I thought it was $325m over 10 years?

2. I don’t understand why the city doesn’t tax or raise utility rates on customers outside of Tacoma and leave Tacoma rates alone.  Is there a law against that or something?  It seems odd that if something goes catastrophically wrong with a dam, Tacomans have the responsibility of fixing it while outside customers in, say, Lakewood or U.P., can just switch electricity suppliers.  Why does Tacoma have all the responsibility of TPU and is not able to use it as an asset and capitalize on it?

3.  I heard Click! needs about $7m to upgrade to gigabit speed internet and expand outside of it’s current area.  Gigabit speed at competitors is $130 a month but Click! said they’d charge $75.  A great deal.  But why not use Click! and gigabit speeds, totally tax the hell out of it, and use the money for roads?  Seems to me that if you charged a whole lot less for internet, you could also get away with increasing electricity rates/taxes (for roads) in the outlying cities with a net savings for customers there.  Even charging $100 for gigabit internet and raising electricity rates a smidgen might get all the money needed for roads???

Having TPU have a department of infrastructure would be great.  Give them the roads issue so utility work is integrated into road reconstruction - further saving money.

July 14, 2015 at 11:12 am / Reply / Quote and reply

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JDHasty

“But why not use Click!...  ...and use the money for roads?”

C’mon, you can’t possibly be so naive as to actually believe that the powers that be intend to spend any new revenues exclusively, or even primarily, on restoring, maintaining and preserving our pavement infrastructure.

“Only $120m?  I thought it was $325m over 10 years?”

It really doesn’t matter how much money they are talking about the issue I have is that what they are asking for is unconstrained dollars and we all know that if they get their hands on unconstrained dollars that our pavement will be in no better shape than it is today. 

Irrespective of everything else, there is still no comprehensive pavement assessment and plan to study so there is absolutely no valid reason for the public to support any request for new revenues.

July 14, 2015 at 12:04 pm / Reply / Quote and reply

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Jesse

The city is doing a pavement assessment.  It was in an E133 article about a month or two ago.

July 14, 2015 at 12:26 pm / Reply / Quote and reply

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JDHasty

The City does not have a pavement assessment, ergo the City has no plan.  I am not supporting anything less than a defined work plan that has an achievable OCI rating at the end of the term associated with it.  And if the post workplan OCI rating does not reflect meaningful improvement and the cost is not commensurate with the work being done I still will not support it.  In fact I will actively campaign against the proposal.

July 14, 2015 at 12:49 pm / Reply / Quote and reply

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JDHasty

http://www.exit133.com/articles/view/state-of-the-city-more-than-potholes…-deep-repairs#.VaVoFvlVhBc

This is all a search returns.  Perhaps you can find and provide a link to the article.  As an aside, the objections I raised to the Mayor’s earlier proposal are applicable to her newest scheme.  You can read a few of them at the link. 

July 14, 2015 at 12:55 pm / Reply / Quote and reply

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JDHasty

Here is all you need to ask the Mayor:

1) What is Tacoma’s current OCI?
2) What is the target OCI the City is aiming for at the end of 10 years?

If she cannot answer these questions then the City has no business coming to the voters looking for new revenues.  Once these questions have been answered then the debate can begin on whether or not to support funding the work plan that is being proposed. 

July 14, 2015 at 12:14 pm / Reply / Quote and reply

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JDHasty

The City does not have a current Pavement Assessment or report. 

Work is to start next week on the data collection and by August will be wrapped up. 

It will take a few months to analyze the raw data and put a draft report and analysis together.  So we are talking in October sometime the public will have the necessary information available to make an informed decision whether to support any ballot measure of Council action.

July 15, 2015 at 12:45 pm / Reply / Quote and reply

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Jesse

You should be happy.  They took your advise.  This will create a list of items to tackle first - just like you suggested.  Smile big.  It’s okay, man… you can do it. 

July 15, 2015 at 3:35 pm / Reply / Quote and reply

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JDHasty

It isn’t my “advice,” it is just common sense.  This Pavement Rating, Analysis and Report will, or at least should, provide us with a number of scenarios that range all the way from “do nothing” to “do everything in a few years.”  Tacoma has first hand experience regarding the former and how that works out for a jurisdiction in the long-term (actually maintenance deferred for any longer than a few short years turns disastrous very quickly and by time you get to mid-term the situation is in crisis).  Regarding the latter, it is only placed in the report to add context to the discussion.

The report will grade the City’s pavement and provide what is known as a Pavement Condition Index (PCI) or Overall Condition Index (OCI).  That number will be in the 20 to 30 range, which is a number that no jurisdiction with any pride or with competent leadership can be happy about.  The scenarios will look at various work plans and will project what our OCI/PCI will be at the end of a certain number of years. 

Generally the plans I have seen have provided ten-year programs and have defined a work plan to get there and then, and only then they are able to provide an estimate of the amount of funding necessary to implement the work plans.  In the case of a jurisdiction that has been mismanaged to the degree that Tacoma’s transportation system has, notice I am not saying neglected - there was no “neglect” there was a lot of effort put into raiding the maintenance and preservation budgets and spending those revenues on “Council Special Projects,” the consultant will probably provide fifteen or twenty year program scenarios in order that the post program PCI/OCI will show improvement enough that our pavement will be in at least the lower range of fair/good condition when the program nears the end of it’s term.

The only new revenues Tacoma voters should support would be for funding that is totally 100% legally constrained for funding a defined work plan and this means the language must also make it clear what this money CANNOT be used to fund.  The work plan and program must provie a target OCI/PCI at the end of the program’s term as well as a target OCI/PCI at each two year interval as the program progresses.  Arterials and collectors will be rated annually in perpetuity and the entire City’s street system shall be rated every other year. 

If for any reason the pavement rating is not done as scheduled the Public Works Director will receive a termination notice and will not be eligible for rehire with the City of Tacoma. 

   

July 16, 2015 at 8:41 am / Reply / Quote and reply

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Stu

When I was a kid growing up in the north end (which somehow since got renamed the west end, even tho it is further north than the north end - go figure), the street I lived on (and quite a few of the surrounding streets) was not paved at all. No alleys were paved, and many still aren’t. Dirt ruled. And this was the 1960s, when ‘Merica was at its economic pinnacle.

Nowadays with all the talk of polluted water runoff making its way back into the sound (or sea - dang, they renamed that too), perhaps we should go back to the future. Save paving for arterials. Stop worrying about how to maintain secondary paved roads and embrace a return to dirt. Dusty? Muddy? Sure. Small inconvenience. Replace street sweepers with road graters. Free up specialized road crews to focus on arterials. Save $ while use as another bragging rights tool as to how green this city is.

Reduce speed limit to 20 on all secondary roads. Allow the earth to filter the water naturally. Let greendom ring.

Tongue-in-cheek, of course. But there is some truth in the wacky idea. Work on it.

July 15, 2015 at 11:32 pm / Reply / Quote and reply

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Wild BillRegistered

love it

July 16, 2015 at 4:09 pm / Reply / Quote and reply

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JDHasty

This is an important thing to keep in mind.

A rehabilitation program of this extent IF PROGRAMMED CORRECTLY will look much like a twenty or thirty year home mortgage to residents.  As you track the OCI/PCI for the first third of the program the number is not going to seem to be getting any better.  Just like watching the principal on your mortgage does not go down by much early on. 

That is because the deterioration does not rest.  Now this is very important so pay close attention:  as we are reclaiming certain streets others are getting worse and it will be some time before we turn the corner and the restoration effort is out pacing the deterioration. 

We need to save streets that have not YET failed, before going after the worst of our streets which have already failed.  We must do it this way because we need to stop streets from going from salvageable to totally failed and needing to be replaced with a totally new road bed as well as pavement restoration.  This is vital, because the cost differential is dramatic. 

The City has gotten us into a pickle and it is going to take decades to dig out from beneath the mess they have created.  The thing to watch out for is that politicians will want results that can be seen immediately and their horizon is only as far as they term limit out of office.  If allowed they will opt for a strategy that is analogous to laying new carpet over bad flooring.  But it looks good for a few years.

If this is allowed the issue is that at the end of the program our City OCI/PCI will be what it is today or even worse.  If we are going to achieve long term benefit and at the end of this program have a solid foundation to build on we absolutely must choose a strategy that will yield sound pavement throughout the City of Tacoma at the end of the term and not leave us and/or our kids where we are today. 

I hope you can follow this.  What Tacoma needs is a sound strategy to get us to the point at which our OCI/PCI is at a level of fair to good.  Perhaps, if we want to look at a strategy to get Tacoma up into the good to excellent range we are looking at a 25 to 30 year commitment that has iron clad, legally binding constraints on how this revenue can be spent and more importantly it must spell out what none of it can be budgeted or programmed to fund. 

July 16, 2015 at 6:24 pm / Reply / Quote and reply

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