Both sides of the debate about Tacoma’s Proposition 1 to fund street repairs agree on two things. Tacoma has bad roads, and more should be done to fix them. That is where the agreement ends.
Backers of the 2-percent hike – or 33 percent – on gross earnings of utility companies say the plan is the fairest way available to raise about $10 million a year for road repairs and maintenance. Opponents say the city hasn’t explored all options and the tax unfairly burdens businesses since they make up the bulk of ratepayers.
The tax would directly affect electrical, gas and phone companies, which are likely to pass the added charge to ratepayers. These utility companies already pass through a 6 percent tax, so the addition would bring the total tax to 8 percent and add about $5 a month to average residential customers.
The money gained from the tax would be spent on roads and is outlined in a five-year work plan that would have crews improve intersections around 46 schools, repair some 18,000 potholes and repave 510 blocks of neighborhood streets around the city. The money would also boost funding for 12 backlogged neighborhood Local Improvement District projects, where residents have already agreed to partner with the city and pay a significant portion of the cost, and provide matching funds for utility projects so water and sewer improvements can coordinate for street improvements at the same time.
The money would also be used to leverage state and federal grants, which only require a 15 percent match of local dollars, for example. Some grants even allow grant money from other sources to be used, so the city won’t have to pay any money for roadwork if the projects are cobbled together with other work.
Tacoma road repairs have been underfunded for decades, causing some streets to decay beyond repair and need to be replaced. Proposition 1 would target repair projects that would extend the life of streets before they collapse beyond repair. Streets installed and left unmaintained only last about 20 years, while streets that are repaired every five years with chip sealing and patches can last 80 years at a fraction of the cost of replacing it every 20 years.
“At the same price as a road you get for 20 years, you get a road for 80 years if you just take care of it,” Assistant to the Interim Public Works Director Michael Gents said.
One vocal opponent to the tax hike is the Tacoma-Pierce County Chamber, saying the tax will hurt businesses and do little to solve the city’s street troubles, which has been estimated as totaling $800 million. Businesses will be paying the bulk of the tax while the street repairs will be mostly done in residential areas, causing a gap between tax payers and those who benefit from the proposition.
“There isn’t a lot of fairness there,” Chamber Political Issues Manager Gary Brackett said. “There is no link between users and the tax.”
The chamber wants the city’s newly formed Fiscal Sustainability Task Force to complete its work examining the city's revenue structure and budget deficit to look at road repair holistically that could also include input from the city’s new Transportation Commission that is also tasked with developing recommendations about short and long-range transportation issues.
“The reality is that this tax will be passed on to the customer on top of the City Council’s recently added $20 car tab tax that was supposed to go toward fixing our roads,” said Tom Pierson, Tacoma-Pierce County Chamber President and CEO. “The chamber supports responsible and sustainable planning that will improve Tacoma’s roads with a comprehensive solution for fixing roads, not a band aid approach that the council has put forward to the voters this fall.”
Another issue is that the tax hike will be passed on to residents outside of the city, who are customers of Tacoma Public Utilities. About half of TPU customers are outside the city limits and don’t get a vote about the tax increase they will pay. City Councils in Lakewood and University Place have voted their opposition to the tax, for example, since many of its residents will pay the tax without receiving direct benefit from it.
Fircrest residents, however, are served by utilities affected by the tax, but its franchise agreement states that any tax higher than 6 percent must go to fund local improvements, so other cities might ponder adding similar language to their franchise contracts, which would lower the final tally going toward Tacoma roads, Pierson said.