Tax Collection for Aberdeen’s Transportation Benefit District is set to expire in 2019, city officials are planning to place a 10-year extension on the February ballot.
In October 2012, the City established a Transportation Benefit District – TBD for short, and sometimes referred to as the Transportation Improvement Fund or TIF – for the improvement of city streets, and in February 2013, Aberdeen voters approved a six-year 0.13% sales tax increase* to fund the TBD.
Since July of 2013, all taxable goods purchased in Aberdeen, whether purchased by residents or non-residents, have included an additional 0.13%* in sales tax to generate revenue for a local Transportation Benefit District (TBD). The TBD pays for transportation improvements within the city limits such as paving streets and building sidewalks. The current TBD sales tax will expire in June of 2019, and a 10-year extension of the tax at a rate of 0.18%** is on the February ballot for voter consideration.
From July 2013 through the end of 2018, the current tax generated $2,967,390.61 of revenue, of which $2,861,950.01 has been spent on transportation projects as summarized below and detailed at the end of this handout. With Aberdeen being a regional commercial center, much of this revenue has been generated from purchases by non-residents.
With the six-year TBD tax collection set to expire in June 2019, the City Council has recommended that a 10-year extension of TBD tax collection go before Aberdeen voters in the February 2019 election. Due to strong citizen approval of the transportation work completed and due to a long list of projects still to complete, the Council recommended that the proposed 10-year rate be set at 0.18%** to increase the amount of work that can be performed annually.
To help inform voters in their decisions, the City’s Engineering Department has put together the following map showing what the six-year TBD tax collection has funded since it began in 2013:
*0.13% = 13 cents on every 100 dollars in taxable goods purchased = Current tax set to expire in 2019
**0.18% = 18 cents on every 100 dollars in taxable goods purchased = Proposed 10-year extension
Interested in learning more about TBDs in Washington State? More information can be found here:
Questions & Answers:
Q: How are TBD tax revenues spent? A: TBD tax revenue by law may only be used for construction, maintenance, and operation costs for transportation projects that are included in a local, regional, or state transportation plan. In Aberdeen, the City’s Engineering Department develops an annual project plan for TBD funds which is presented to the City Council for approval.
Q: How is the City’s annual project plan for TBD funds developed? A: The City’s Engineering Department maintains a list of streets that have been identified by City staff, by the City Council, or by public comment as in need of repair or improvement. The streets on the list are inspected annually and their conditions are scored. The City Engineer then ranks the streets based on their scores and selects top-ranked streets for developing cost estimates. The City Engineer then assembles the annual project plan based on top-ranked streets and available budget, with an emphasis on providing a range of project types (large projects, small projects, sidewalks, crack sealing, etc.) over a broad geographical area, and avoiding funding projects with local TBD dollars that are eligible for state or federal grants.
Q: What happens if the tax extension is not approved? A: The tax would end in June of 2019 and the fund would stop collecting revenue. A final annual project plan for TBD would be developed to use remaining funds in 2019. The transportation system would continue to be maintained and improved with funds from the City’s annual budget, albeit at a considerably slower rate. The approximately $540,000 per year that the TBD tax has generated has allowed for faster implementation of repairs and improvements.
Q: What happens if the tax extension is approved? A: The tax will be extended for 10 years and will generate an estimated $748,000 of annual revenue to be used solely for TBD transportation improvements in addition to the City’s regular annual budget for street work. With Aberdeen being a regional commercial center, a large portion of the revenue will be generated from purchases by non-residents