UPDATE | Island car tax could raise approximately $330,000 for roads

The Bainbridge Island City Council has long looked at ways to pay for repairs to its ailing roads.

Councilwoman Anne Blair believes she has the answer.

A vehicle excise tax.

Blair, along with her fellow council members, would like the city to form a transportation benefit district.

If adopted, it would translate into higher license tab fees for island vehicle owners.

The council got a first touch on the option to form a district at its meeting Wednesday. Council members unanimously approved moving forward with drafting an ordinance to form the district.

If Bainbridge Island is able to form such a district, a vehicle licensing fee would be established for each vehicle registered on the island. The money gained would go to pay for road maintenance and repairs.

The fee would likely be $20, the maximum allowed by law. The city estimates that, at a collection rate of 90 percent, it would raise approximately $330,686, based on the 18,000-plus registered vehicles on Bainbridge. This is after the Department of Licensing takes a 1-percent cut for processing the fees.

“All of us who ran (for city council) heard loud and clear that dealing with our long-delayed road problems is a super high priority,” Blair said. “We need to identify additional funding.”

The idea for a transportation benefit district is nothing new. A tax on island vehicles has been tossed around before. Former Councilman Barry Peters spoke of it often, but it never got any traction.

The idea may be picking up speed now, however.

Blair brought up the notion of forming an island transportation benefit district at the council’s recent retreat on Sunday, July 22.

Funding for roads maintenance has been slim.

This year, contracts were awarded to two contractors for asphalt and chip seal repair of roads for $334,097 and $218,511, which eats into most of the $600,000 budgeted for roads maintenance. In 2011, $400,000 was allotted.

The city did not fund any roads preservation programs in 2008, 2009 and 2010.

At the retreat, Blair’s fellow council members expressed support of at least talking about the district, but when Blair said she wanted to get it formed by the end of August, she was met with disbelief.

“Everybody laughed about it,” Blair said. “I was not kidding.”

But when faced with the reality of the situation, the council changed its tune.

If the council decides to support a transportation benefit district, they must move quickly.

Kitsap County has been “flirting” with the possibility of forming its own transportation benefit district, one which would include Bainbridge Island, Blair said.

If the county beats the city in forming a district, the city would not be able to direct how the tax money is managed and couldn’t subsequently form its own district.

“If the county were to establish a transportation benefit district, then they get to take the money and say how much of it we get,” Blair said.

But if the council is able to establish their own district, the city gets the whole pot of revenue.

“We’d like to keep our own money at home,” Blair said.

It therefore is not an issue  if a district is formed, but rather, who and when, city officials said.

“It’s not a matter of when it happens,” said Councilwoman Kirsten Hytopoulos, who also supports the idea. “It’s who gets the money.”

Putting the issue on the fast track, the city believes it can get an ordinance ready and passed by Aug. 22.

That is, of course, if everything goes smoothly at each council meeting until then.

To get the ordinance passed the council will have to go through two readings of it, give public notice, and have a public hearing.

When all is said and done, if the city passes an ordinance to form a transportation benefit district by the end of August, the Department of Licensing can begin charging the fees by February 2013.

Blair has noted that the city of Bremerton has formed its own transportation benefit district. She said that she will point to Bremerton’s district as an example for Bainbridge Island.

Bremerton passed a resolution to form a transportation benefit district in December 2011.

A $20 licensing fee was established for vehicles registered in the city.

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