July 18, 2013 · Exit133

Tacoma Considering 2% Tax on Utility Earnings for Road Repairs

The bulk of revenue from the tax would come from power earnings.

The Tacoma City Council is considering proposing to voters that they impose a 2% tax on utility company earnings. Council heard a presentation from staff on the proposal at this week’s Committee of the Whole meeting.

If passed, the tax would be expected to raise between $10 and $11 million annually for repairs to Tacoma’s roads: resurfacing; improvements to sidewalks, intersections, and traffic signals, school crosswalk upgrades, and a community favorite: pothole repairs. Funds could also be dedicated to contribute to road improvements after utility work, and could be leveraged to get state and federal grants, for which a 15% local match is typical.

Although the tax would be on utility company earnings, it sounds like it would be likely be passed along to customers. The average Tacoma household could expect to pay about $5 per month. About 75% of the funds raised by the tax would come from power earnings. The presentation didn’t discuss what the tax would mean for larger commercial customers.

An interesting aspect of this discussion is that the vote on the tax will go to Tacoma residents, but TPU serves 160,000 customers - nearly half outside Tacoma (54.3% inside city limits; 45.7 % outside city limits). If the tax is passed along, it would be passed along to customers in Fircrest, University Place, Fife, parts of Steilacoom, Lakewood, Joint Base Lewis-McChord and unincorporated Pierce County as well.

The phrase we heard repeated a few times was “dedicated, sustainable funding.” That’s the key here - the City is looking for a funding source that can be directed specifically to roads, and that can be relied on year after year to help put a dent in the problem of Tacoma’s troubled roads.

The next step for the proposal would be a resolution on the July 23 Council meeting agenda that would make the proposal an official ballot item - City of Tacoma Proposition 1 - for Tacoma voters to decide on November 5.

Tacoma residents have told the City repeatedly that roads are a priority - this proposal would put money towards the kinds of repairs we hear the most complaints about. Now it’s up to them to tell the City whether this is how they want to pay for that priority.

Filed under: Transportation, Legislation, City Projects, City Government, Budget, Roads, Transportation Planning

12 comments

Jesse July 18, 2013

As long a they don't redirect current road funding elsewhere, but add this money to it, this is a great deal. Why not double the tax and bury some utilities while they're at it?
Sid July 18, 2013

I am all for it, IF they repair ALL the streets in the city and not conveniently pick the ones on THE NICER PART OF TOWN.
Xeno July 19, 2013

$10-11 million isn't a lot for this type of work, but it is a start.
NSHDscott July 19, 2013

The "nicer" part of town actually has some of the worst roads in town. Good luck finding a worse block of road than one near my house, on N. L St. next to Frisko Freeze. That said, I'd love to hear more about how roads will be selected for repair.
Sid July 19, 2013

I'll take the bumpy road over the drug addicts and dealers on our main strip of 38th st.
talus July 19, 2013

Let's hope some of the money goes to bike lanes/bike ways south of 19th. Just rode home from South Tacoma Way and 42nd. What a Pho King nightmare.
fred davie July 19, 2013

Reduce the wages for city workers by a very modest amount and you will be able to achieve a surplus of $10M...easily. And nobody is going to quit their job over it. Quit bending the taxpayers over with all these arcane tax increases.
Dan H July 19, 2013

I like that they are thinking outside the box. I've always thought that local street should be thought of like a utility in that it provides you a service of access. Tax existing utilities is not what I had in mind, but it might work. I'm concerned that the PR campaign will be inadequate to gain the public trust on such a large issue in such a short period of time. What assurances do we have that the money will be spent wisely? If this money is asked for, it needs to be dedicated to maintenance, preservation and repair only. I'm an avid cyclist and I'd love to see us work towards the completion of our Mobility Master Plan, but this has to be about fixing our broken and decaying roads. Use existing sources of money and grants to fund things like the Prairie Line trail and Water Ditch trail. Look at the streetscape improvements downtown and Stadium Way improvements. Those are being done without this money. New funding is needed to maintain what we already have. The most cost effective work you can do is preserving what you already have. The only improvement that should be done is building federally mandated Americans with Disabilities Act (ADA) ramps.
Garrett July 23, 2013

I rather like the free traffic calming we receive by replacing/repairing roads on a slightly lengthened schedule. That said, there are indeed some Tacoma roads that are probably past traffic calming stage and into alignment destroying stage. My only wish would be for the tax to be implemented as a local gasoline tax. Those who drive and can afford to pay for roads, like me, can pay for roads. Those who drive less (or not at all), who tend to be disproportionately poor, are getting the short end of the deal here.
Jesse July 24, 2013

I read in the paper that Simpson-Kraft (the paper mill) would have a $500k increase in their electric bill if the 2% increase was passed on to them in a utility bill. First off, are their utilities really over $2m a month? And second, if that plant were to go away, would that be a bad thing? There are jobs and commerce there but how many new residents and jobs have that stink plant cost Tacoma? Sure, it doesn't stink a lot anymore but an outsiders perception is reality.
Joe-Nate July 26, 2013

It is an honest tax--with a dedicated use, per the ballot language (not a tax increase for the general fund). TPU is a Tacoma city agency, not a mutual association run by customers. That TPU customers outside the city limits may help pay for Tacoma road repairs reflects the rights of Tacoma city voters to set policy for their public utility--Tacomans will also pay the tax. Fife and University Place chose to create their own city governments rather than join Tacoma, keeping instead TPU services for electricity. The bottom line is Tacoma voters will have a chance to maximize the value of their TPU assets to rebuild streets in their city with a modest tax increase. Tacoma is the economic hub of Pierce County and is used by residents of the whole area. This utility tax measure should be approved in November--restore the core's streets by fixing Tacoma potholes with new money..
NameJDHasty August 2, 2013

It is not "dedicated" to pavement repair, restoration & replacement. It is open ended "transportation" and can be spent on new capital projects or wherever the powers that be want to spend it.