Creating yet another tax in city is a bad idea

Creating a new tax to fund road improvements in Oak Harbor is a horrible idea, especially under a cloud of mistrust created by the major cost overruns for the new sewage treatment plant.

Many residents of Oak Harbor don’t have faith that the city is being a good steward of the people’s money, and they can’t be blamed for being skeptical.

Members of the Oak Harbor City Council are considering a proposal submitted by city staff to create a transportation benefit district to fund road work, especially fixing crumbling streets and pot holes.

The city has historically fallen short on funding for maintenance projects as most grants don’t cover that type of work.

With nearly 16,000 registered vehicles in the city, a vehicle license fee of $20 would raise about $315,000 a year, according to city estimates. The fee could be increased to $40 after two years.

A two-tenths of 1 percent sales tax would bring in more than $900,000 a year.

A transportation benefit district is a quasi-judicial corporation with an independent taxing authority. It can raise taxes in several ways, namely a sales tax increase of two-tenths of 1 percent, a vehicle license fee, a commercial and industrial building fee, an ad valorem tax or even a vehicle toll on roads.

Council members are set to discuss the idea during their May 15 meeting and possibly adopt an ordinance to establish a transportation benefit district.

There will be time for residents to comment.

Creating the district is a bad idea. Plenty of roads around town need attention and the city doesn’t currently have the funding to fix them, but residents are already feeling saddled with high utility costs.

The proposed ordinance would only establish the district. The decision on the revenue method will be made during a meeting of the district’s governing body, which would consist of council members.

The council members should also be cautious about raising sales tax in the city. Sales tax is regressive; low-income people end up paying a higher percentage of their income to taxes than wealthy folks.

Higher sales tax may not be good for business, especially those that sell big-ticket items.

The sales and use tax rate is currently 0.087 percent. It’s already higher than rates in unincorporated Skagit County, Burlington and Anacortes.

Oak Harbor residents are growing wary of city spending, and the council needs to pay attention.