Olympia council to consider increasing sales tax to raise funds for streets, sidewalks
The City of Olympia is struggling to pay for construction of and repairs to its roads and sidewalks, so its Finance Committee is recommending an increase in the local sales tax.
The Olympia Finance Committee approved a recommendation to raise the city sales tax by 0.1% to 9.6% to help pay for sidewalk and pavement improvement projects. The proposal will come to the City Council within the next month or two, and, if approved, Olympia’s sales tax will increase in 2024.
There are more than 500 lane miles of roads maintained by the City of Olympia, project engineer Joey Jones said. The funds to maintain them now come from the city’s general fund, impact fees, a utility tax, grants, and the Transportation Benefit District, where a $40 vehicle registration fee is collected through the state Department of Licensing. Typical annual funding totals $6.5 million.
But that’s still not enough. Jones said an entire roadway system analysis was conducted to determine the level of work needed. Pavement gets a rating from 0 to 100 to indicate poor to pristine condition. The average rating is currently 67, and it’s projected to go down to 66 in 2024.
Jones said the city has an average rating goal of 75 for its roads, which was last seen in 2014. The proposed increase in Olympia’s sales tax would keep the city from backtracking on that goal.
If funding levels stay the same, the rating is expected to drop to 60 by 2028. To maintain the rating of 65 in 5 years, the city would need $10.6 million. That’s still 10 points below the target goal.
Sophie Stimson, Olympia’s transportation director, said there’s a funding gap in the Transportation Master Plan, which outlines a plan for 20 years’ worth of transportation projects. The plan shows a need for 65 miles of sidewalk, but enough money for 8, she said. Only 10 of the 34 miles of bike corridors can be built, and 15 of 81 pathway projects can be funded.
On top of that, there’s been a 75% increase in material costs since 2019, Stimson said. And there are other non-paving-related costs that stretch the budget, such as access ramp construction and other ADA accommodations.
“At current funding levels, we will see more costly treatments and repairs in the future,” Stimson said. “By not addressing pavement needs, it means more costly reconstruction later.”
Stimson said $100,000 has been set aside in the 2024 Capital Facilities Plan to conduct a survey of every sidewalk and access ramp in Olympia. Part of that work will include hiring a contractor for data collection. And while that’s happening, a $500,000 sidewalk repair project will be going on downtown and in major transit corridors. Funding for that will be from real estate excise tax revenue and year-end funds.
Changing response
Committee member Jim Cooper said it’s clear the city will never be able to fund the road repair it needs, so the conversation should be shifting toward repairing and grading fewer roads, and how to prioritize other modes of transportation such as biking and walking.
“I’d like to make a much bigger splash in the other modes of transportation than you’re talking about,” Cooper said. “Let’s bond $15 million to $20 million and drop some big, multi-modal projects in the city. I don’t know if that really gives us a big sidewalk corridor or bus lane, but that’s where my brain is.”
Cooper said if the city doesn’t start focusing on these other systems, it will never get to a point where it can reduce the need for pavement management. He said it takes looking at the system in a different and smaller way, and it could mean some roads become local access only, or dedicated to pedestrians and bicyclists only.
Stimson said the city has two engineers dedicated to transportation projects, and they don’t have much time to conduct research into the issues Cooper raised. Part of the plan moving forward is to hire another engineer who would focus on bringing in more consistent revenue for projects.
Right now, Stimson said there’s one dedicated funding source for sidewalks, a devoted utility tax that generates about $1 million a year. Other needed improvements such as bike corridors don’t have dedicated funding, and hiring another engineer would address that.
The plan to increase the sales tax and keep the $40 registration fee would also put a dent in the need for dedicated funding for projects. The increase would generate another $500,000 for sidewalk repair and ADA accommodations. Pavement repair would receive $1 million a year, and other Transportation Master Plan projects would get $1.6 million a year.
Now that the tax increase proposal has been approved by the Finance Committee, it will go to the City Council for approval. If approved, the city has to notify the Department of Revenue and has three months to prepare for collection to begin, which could start in the beginning of 2024.
