City backs away from street tax proposal

City staff has recommended against asking voters to raise their property taxes this fall to fund street repairs. This comes on the announcement of a substantial decrease in property tax assessments in Tacoma, which greatly limits the city’s remaining taxing capacity.

On July 17, City Manager T.C. Broadnax discussed the matter with Tacoma City Council during its study session. He mentioned attending the meeting last week of the Citizens Neighborhood Street and Safety Improvement Task Force, recently formed to advise the city on tax measure and what projects it should fund, if passed. He gave them an update on new property values for Tacoma and the fiscal impact on the proposed property tax levy lid lift.

He said the meeting “was a difficult one for me.”

When it was proposed, the city’s funding capacity was adequate to provide $9 million annually over six years. Last month, the Pierce County Assessor-Treasurer’s Office announced an estimated 10 percent decrease in the city’s assessed property values, significantly reducing the funding.

Broadnax said the city has a cap of $3.60 per $1,000 of assessed value. The new figures indicate the city will only have 24 cents left. This would leave it with half the amount of money city officials thought would be available for street repairs through the tax increase.

The city has a deadline of Aug. 7 to place the measure on the ballot for the general election in November.

Broadnax said the city should explore other ways to generate funds for street repairs, noting Tacoma needs “a much more sustainable approach.”

He said staff will form innovation strategy teams that will brainstorm where to obtain this money.

Councilmember Ryan Mello said he is “incredibly disappointed,” but acknowledged the financial reality the city must deal with the taxing capacity limits.

He pondered whether the council has any influence over this decision from the Assessor/Treasurer’s Office.

Councilmember Anders Ibsen said the new property figures show the relative weakness in the city’s current system of funding street repairs. He said the Legislature should grant it more taxing authority to pay for such infrastructure.

There are two other options available to the city, which would not require a vote of the people. These are issuing a utility revenue bond to coordinate replacement of aging sewer and water lines and imposing a $20 car tab increase.

“We could look at those other revenue sources,” Broadnax remarked.

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