As the Vancouver City Council starts to whittle down the scope of a comprehensive, multimillion-dollar proposal aimed at carrying the city sustainably through the next decade, city leaders are starting to look more critically at their options for raising revenue.
The proposal, A Stronger Vancouver, includes around 60 proposed projects or upgrades to city programs. To fund the full plan as currently written, the city would need to collect an additional $30.1 million annually.
Recognizing the unwieldy scope of the proposal, the city council is working to nail down some priorities.
“I don’t think we have the climate to be asking for above and beyond. I think first and foremost, we need to get back to what we were trying to achieve, which is how are these expenditures going to address the structural deficit?” said Mayor Pro Tem Bart Hansen.
The Executive Sponsors Council, a volunteer group that started writing the plan in 2017, proposed a three-way split to spread the tax burden equally among different groups: $9.7 million from an increase in property taxes, $9.7 million from beefed-up business taxes and $10.7 million from other miscellaneous taxes and fees. They presented the plan to the city council in April.
But since then, some proposed tools for collecting revenue have fallen off the list of contenders.
On the business side, $5.5 million would have come from a new business and occupancy tax. The council unanimously shot that down last month, worried that it would create a hostile market for businesses in Vancouver.
“My concern isn’t that if you build it, they’ll come. It’s that if you tax it, they won’t,” Hansen said on Oct. 7.
A proposed $10 increase to vehicle tabs — projected to collect $1.2 million of the $10.7 million covered by the “miscellaneous fees” category — was effectively killed by the passage of Initiative 976 earlier this month.
I-976 could further complicate A Stronger Vancouver because it strips the city of millions in transportation funds. The Transportation Benefit District funds are collected separately from A Stronger Vancouver, but with the district now in limbo, councilors are now considering folding it into the larger Stronger Vancouver package.
Meanwhile, smaller items on the list have already been cut. The council decided against pursuing a $700,000 Downtown Improvement Area. They’ve also eliminated a $1 million fire sprinkler program.
Vancouver has a few options for how to raise $9.7 million more per year in property taxes, and all of them require voter approval.
The most likely route is a levy lid lift, which would allow the city to increase property taxes by more than the currently permitted 1 percent per year. In order to pass a levy lid lift, Vancouver residents need to approve a ballot measure by a simple majority — easier than passing a bond, which requires 60 percent to pass.
Under that umbrella, four combinations of possible levy lift types exist:
• A single-year, temporary levy lid lift: Bumps the property tax increase above 1 percent once, and resumes a 1 percent increase after that for a predetermined number of years. Once the levy expires, property tax rates revert to what they would have been had the lift never been applied.
• A single-year, permanent levy lid lift: Bumps the property tax increase above 1 percent once, and then resumes the 1 percent increase after that, indefinitely.
• A multiyear, temporary levy lid lift: Bumps the property tax increase above 1 percent and maintains that increased rate for up to five years. Once the levy expires, property tax rates revert to what they would have been had the lift never been applied.
• A multiyear, permanent levy lid lift: Bumps the property tax increase above 1 percent, then maintains that higher rate indefinitely.
Each option has its advantages and disadvantages, said Natasha Ramras, Vancouver’s chief financial officer.
Multiyear levy lid lifts have the potential to bring in more money, but they come with more restrictions on how the city can use the funds. They’re also harder to pass. According to a report from the Municipal Research and Services Center, cities have had a success rate of around 75 percent in passing ballot measures to approve single-year lifts, but multiyear options fail about half the time.
But ultimately, Ramras said, the option the city council selects will be determined by how they want to use the revenue.
“Usage of the revenue will drive which tool, property tax tool, is best suited,” Ramras told the council last month.
What is A Stronger Vancouver?
A typical city resident would be forgiven for not fully understanding everything A Stronger Vancouver encompasses. It’s a mammoth, sweeping package, difficult to sum up tidily. It covers around 35 capital projects and 25 new or enhanced programs.
The proposed capital projects include constructing a new city operations center, building or renovating five new fire stations and investing in infrastructure within the Fourth Plain corridor and other underserved areas. Parks are another major piece: eight new parks would be built, and another 16 would see upgrades.
The other half of Stronger Vancouver proposals includes services and programs — programs that would, unlike the one-time expense of capital projects, extend into the future indefinitely. The plan would establish a new homeless response team, establish business district plans for key development, implement traffic and pedestrian safety programs, expand recreation options, create a public arts fund, and more.
A full list of each of the proposals can be found on strongervancouver.org.
Through a series of public outreach events, city leaders have learned that Vancouver residents largely consider homelessness services as the most important piece, according to Carol Bua, the city’s communications director.
“There were some overarching themes to take away from the feedback,” Bua told the city council in September. “The No. 1 topic overall was homelessness. Everywhere we went, people talked about homelessness.”
Responders also cared about traffic. They were less enthusiastic about building new parks, and they also worried that major investments could rob Vancouver of its small-town, pointedly-not-Portland feel.
The city council will hold its first public hearing on the entire Stronger Vancouver package during its upcoming meeting on Monday.