By: Mike Fong and Laura Solis, Lower Valley Matters
Mayor Hilda González has confirmed that Granger plans to consider creating a Transportation Benefit District (TBD) before the end of October. The Council, convening as the board of a TBD, could then enact a new car tab fee of up to $20 per vehicle registered in the City and/or a .1% sales tax increase without voter approval. Collection of the new revenue could begin as early as January 2027. New funding would support the maintenance and repair of Granger’s streets.
Transportation Benefit District. Colleda Monick from HLA, the City’s contracted engineering firm that assists with transportation projects, presented to the Mayor and Council on TBDs at a workshop in May. In her introduction of Monick, the Mayor explained that new revenues from a TBD could fund existing roads maintenance projects and “local match” requirements for transportation grants. Monick noted that the City’s Transportation Improvement Plan (TIP) identified priority projects ranging from a few hundred thousand dollars to as much as $4 million.
Monick explained that TBDs are taxing authorities that cities and counties across the state have created to raise funds specifically for transportation needs. There are four options for generating revenues through a TBD: car tabs fees, sales tax increases, property tax increases, and tolls on cars driving on roads.
Grandview, Sunnyside, Toppenish, Wapato, and Zillah have TBDs in place. Sunnyside voters approved a sales tax increase of .2% in 2020. Grandview, Wapato, and Zillah have approved a $20 annual car tab fee, and Toppenish has a $40 annual car tab fee.
Granger’s current local sales tax rate is 8.2%. Adding .1% would raise this rate to 8.3%. Examples of taxable purchases in the city include restaurant/food truck prepared meals, online purchases delivered in town, convenience store household items, beer and alcohol, soft drinks, other retail items, and certain types of services like car repair. The sales tax increase would not apply to purchases of gas.
A .1% increase would add $0.10 for every $100 spent on taxable purchases.
To compare the potential cost from the perspective of someone living in Granger, a resident would need to spend $20,000 in a year on taxable goods in town at .1% additional sales tax for it to cost the same as a new $20 annual car tab fee.
Estimated Revenues. Monick estimated that a .1% sales tax increase could generate roughly $50,000-$60,000 in additional yearly revenue for the City for transportation projects (based on 2023 actual sales tax receipts, a more conservative calculation would peg the revenue closer to $40,000). Assuming that there are 1,500 registered vehicles in Granger, Monick estimated that a $5 car tab fee could raise $7,500 a year for the City for transportation projects (using Monick’s assumptions, increasing the car tab fee to $20 would raise about $30,000 annually).
Council Discussion. In May, Councilmember Juan Isiordia stated that he preferred the sales tax option. He noted that Granger’s current sales tax rate is lower than Yakima’s (8.6%) and Sunnyside’s (8.4%). He stated that he didn’t think an 8.3% sales tax would change customers’ spending habits in town. However, he commented that Granger residents may be more critical about a car tab.
Councilmember Israel Bustamante noted that the biggest impact on roads are from vehicles, pointing to the truck traffic to and from Cargill and other businesses in the City. Since these trucks were not registered in Granger, he explained, they wouldn’t have to pay the car tab fee.
Mayor González raised the possibility of imposing both a car tab fee and the sales tax for a holistic approach that can capture users of the City’s roads. She noted that there were cities in the state that had both in place.
Councilmember Isiordia responded that they needed to “let the community breathe a little bit,” fearing the impact of new financial cost burdens. He reiterated that he leaned more toward the sales tax, noting that some cities had rolled back their car tab fees and replaced them with the sales tax.
Next Steps. To begin collecting any funds from a TBD by early 2027, Monick explained that the Council would need to enact the TBD in October. The City would need to pass a resolution to set a public hearing to get the community’s feedback on the proposal. From there, the Council would need to create the taxing district and determine which funding source(s) to implement or send to the voters. The Council has a budget retreat on October 3 and meetings on October 13 and 27. It is likely that the TBD will be discussed at one or more of these upcoming meetings.
You can find the May 26 City Council workshop discussion here: https://reflect-midvalley.cablecast.tv/internetchannel/show/1029?site=4
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