Kalama voters are deciding this general election whether to adopt a 0.2% sales tax to pay for neighborhood street repairs previously funded by the city’s $40 vehicle tab fee.
The tax would increase Kalama’s total sales tax to 8.1% and add 20 cents to the cost of a $100 purchase. It could raise about $115,000 annually for the street fund, but the amount will vary depending on the strength of the economy, said City Clerk/Treasurer Coni McMaster. If passed, the tax would take effect April 1 and last for 10 years.
Only voters inside the city limits will see the measure on the ballot. It needs a simple majority to pass.
“With this tax, it doesn’t matter if they are a Kalama resident, a visitor pulling off I-5 to shop, or a vacationer — revenue will be collected equally,” proponents of the measure wrote in the voter’s pamphlet argument. “This will shift some of the financial burden off our shoulders and onto those visitors and weekend tourists.”
The argument against the measure states that “once a tax is repealed for being too high, it makes no sense to replace it.” The opponents ask residents to vote against the increase because other local taxes and utility fees keep rising, and the COVID-19 pandemic adds more economic uncertainty.
The argument for the measures states shoppers would have to spend $20,000 to pay $40 in sales tax, making it the “smartest and most equal” revenue source for streets.
Kalama used the vehicle tab fees to fund its Transportation Benefit District (TBD), which paid for repairs and improvements to neighborhood streets ineligible for state and federal funds. The $40 car tab fee collected about $102,000 for the TBD in 2019.
In 2019, voters statewide approved Initiative 976 to cut car tab fees to $30, but the Washington Supreme Court last week struck down the initiative. The justices said the measure violated the state Constitution’s requirements that initiatives be limited to a single subject and that its description on the ballot was misleading.
The Kalama City Council in July unanimously killed the city’s $40 tab fees and the change took effect Oct. 1. The council voted 3-2 to put the sales tax on the ballot to replace the tab fees in funding the TBD.
The TBD can be funded in several ways, many of which aren’t applicable to Kalama, such as a border area fuel tax or transit service sales tax.
The city could use a portion of real estate excise tax revenue for streets. Kalama collects about $65,000 in the tax annually for capital projects, including paying off the loan on City Hall, Smee said previously.
The council Thursday voted to pay off the loan, which will free up about $46,500 annually that could potentially shift to streets. But using the money for street projects would decrease the funds for capital projects, such as buying or repairing buildings.