Vancouver council endorses sales tax hike for light rail
Decision likely paves way for districtwide vote on funding in November
Monday, June 11, 2012
The Vancouver City Council on Monday endorsed a sales tax increase to pay for light rail in Clark County, ending a fast-tracked search for funding options that ultimately ended right back where it started.
It is was a 6-1 vote, with Mayor Tim Leavitt casting the lone no vote. He said he believes light rail can be supported without a sales tax hike.
The council's support likely clears the way for a November ballot measure on light rail funding. Vancouver represents three of the nine votes on the C-Tran Board of Directors. The board's other six members have already signaled their support of a vote, which will be put to C-Tran's entire taxing district. The board meets tonight.
The proposed measure would bump the local tax rate by 0.1 of a percentage point. C-Tran leaders have long said they'd put a ballot measure to voters this year.
"I'm comfortable with where we are, and I think this is the right thing to do," said Councilor Larry Smith, who also chairs the C-Tran board.
Officials are banking on federal money to build a light rail extension from Portland to Vancouver, planned as part of the $3.5 billion Columbia River Crossing project. At issue is how to cover the annual operations cost -- estimated at $2.3 million to $2.7 million -- of light rail in Clark County.
City and C-Tran staff had explored several other options in recent weeks, including a per-employee "head tax" on local businesses discussed at length Monday. Using alternatives likely would have meant a combination of multiple sources, as none by itself would have generated enough to support light rail operations costs long term. And Monday, it became clear most in attendance didn't favor a business tax.
Not surprisingly, the Greater Vancouver Chamber of Commerce and its members were cool to the idea of an employer tax. Chamber President and CEO Kelly Parker called a proposed $2-per-head-per-month rate "obscene." Any such charge is a tough sell for merchants who would essentially be punished for doing well, she said.
"Businesses are concerned about any increase in any tax and any fee," Parker said. "It all matters."
In moving back toward a voter-approved sales tax, City Councilor Jack Burkman said it's the only viable option left after further analysis. A near-unanimous vote finalized the endorsement, though some members expressed their reluctance to vote for a sales tax increase. Councilors Bill Turlay and Jeanne Stewart have indicated they don't like the idea of higher taxes, but want to see the issue go to voters.
A 0.1 percentage point increase would generate some $4.5 million to $5.5 million per year, much more than the amount needed to cover light rail's annual cost. But Monday's resolution added bus rapid transit to the mix, stating the money would also be used to pay for some capital costs and operations costs of the enhanced bus system on Vancouver's Fourth Plain corridor.
C-Tran leaders had long assumed that a sales tax increase would cover the annual operations cost of light rail until earlier this year. That's when the board changed course as the city of Vancouver said it wanted to exhaust all other funding options first.
The full C-Tran board holds its regular monthly meeting today. The agency will have to settle on a funding plan by this summer if it hopes to put a ballot measure to voters this November -- as leaders have promised. But with Monday's city council action, it appears likely that leaders will make that happen.