Every year city and county lobbyists descend on Olympia to beseech the legislature for additional state funding for local transportation projects. We can expect more of the same in the 2027 legislative session. In response, legislators may point to the Transportation Benefit District (TBD) legislation already on the books that gives cities and counties the authority to impose taxes and fees for transportation improvements.
The law allows cities to enact a sales tax increase of .1% or a license fee of up to $40 per year by council action, or higher tax rates if approved by voters.
In RCW 36.75.020 the TBD law also provides guidance on what the revenue should be used to accomplish:
To the extent practicable, the district shall consider the following criteria when selecting transportation improvements:
(a) Reduced risk of transportation facility failure and improved safety;
(b) Improved travel time;
(c) Improved air quality;
(d) Increases in daily and peak period trip capacity;
(e) Improved modal connectivity;
(f) Improved freight mobility;
(g) Cost-effectiveness of the investment;
(h) Optimal performance of the system through time;
(i) Improved accessibility for, or other benefits to, persons with special transportation needs as defined in *RCW 47.06B.012; and
(j) Other criteria, as adopted by the governing body.
Over the last twenty years more than one hundred TBDs have been created, usually to fund city street improvements, sidewalks, bridge repairs, etc. Two more TBDs that take different approaches are currently under consideration, one is in Bellevue and the other in Seattle.
The City of Bellevue is developing scenarios that would use a .1% sales tax increase and $20 -$40 increase in vehicle license fees. The funds would be used for a wide variety of transportation improvements, mostly on city streets, but no more than 8% would be used for street preservation and less than 20% for vehicle mobility. The bulk of the funding would be used for the rather nebulous “neighborhood mobility”, “bike and pedestrian mobility” and “major projects”.
If approved, the sales tax rate in Bellevue would increase to 10.5%. This increase could be enacted by the Council and would not require placing the proposal on the ballot. Interested Bellevue residents can provide input at the City Council’s work session Tuesday evening, October 6th https://link.edgepilot.com/x/ZSlnbCOWjaPcFGq-a9jMdSw?u=https://bellevuewa.gov/city-government/departments/city-clerks-office/public-meetings-speaker-registration/council-oral-communications, or by sending your comments to the City Council.
In contrast, Seattle proposes a .3% sales tax, expected to generate $138 million per year. Most of the revenue would be used to subsidize additional Metro bus service in Seattle, fund continued operation of the Seattle Streetcar, and provide free ORCA transit passes to low-income residents. The proposal will be put to voters in November.
It is unclear if the Seattle Mayor or City Council gave any thought to using the TBD revenue for long overdue repaving and maintenance of Seattle streets. SDOT has reported that 35% of the City’s streets are in “poor” or “very poor” condition, which indicates increased spending on street maintenance is desperately needed (in case you hadn’t noticed the proliferating potholes). Further deferring that work will result in much higher costs for complete street reconstruction when the City finally gets around to it. In the meantime, motorists and cyclists can look forward to increasing road hazards as pavement condition continues to deteriorate. If approved, the sales tax in Seattle would rise to 10.7%, which would be the highest sales tax for any major city in the U.S.
A noteworthy similarity of the two proposals is how little they respond to the guidance set forth in state law. The materials presented in the Bellevue proposal do not show what benefits, if any, the projects would have on traffic congestion, freight mobility, air quality, or cost-effectiveness of the investments. The Seattle proposal makes no effort to address the issues listed in the enabling legislation. This highlights a failure of the legislation. It succeeds in providing cities an additional source of funding for transportation, but it fails to ensure the funds address State transportation priorities or are used cost-effectively. The outcome may be very high tax rates but little improvement in transportation system performance.
To achieve better outcomes the legislature should set clear priorities for use of TBD funds, establish cost-effectiveness thresholds for transportation projects, and require cities to show how the revenue will improve transportation system efficiency.