Issaquah considers new funding method for transportation improvement projects

Council has voted to assume the powers of the Transportation Benefit District to fund new projects.

The Issaquah City Council has voted to assume the powers of the Transportation Benefit District to secure funding for the upcoming 2020-2025 Capital Improvement Plan.

The Issaquah Transportation Benefit District (TBD) was formed in January 2018. As an independent taxing district that covers the entirety of the city, the TBD can leverage several methods to generate revenue for transportation related projects.

Gene Paul, city of Issaquah management analyst, said TBDs were created by the state in 1987 to give governments revenue-generating options for transportation projects. While Issaquah’s TBD has not yet been used for revenue generation, it is seen as a source of revenue for the future.

“Any TBD has an option to use a number of tools — the most common (tool) is vehicle license fees or car tabs, or a small portion of sales tax,” Paul said. “Issaquah has not levied any of these revenue sources.”

TBDs are created as a separate legal entity from the city, but are governed by the city council. In 2015, state Legislature allowed cities to assume control of taxing districts. At the June 17 city council meeting, the council approved the assumption of the TBD.

With the district now part of the city, Paul said TBD activity can be discussed and progressed in normal city operations. No new authority is being granted — the assumption of power just removes the separate entity component.

The city council has now begun work on considering revenue generated through TBD sales tax for the Capital Improvement Plan. At a June 24 council committee work session, finance director Beth Goldberg said the decision to use the TBD to acquire sales tax must pass a simple majority vote during the next election.