Cities have to rework budgets and prioritize road projects with the loss of funding from Transportation Benefit Districts. The Rucker Street improvement project is shown here on Sept. 1. (Sue Misao / Herald file)

Cities have to rework budgets and prioritize road projects with the loss of funding from Transportation Benefit Districts. The Rucker Street improvement project is shown here on Sept. 1. (Sue Misao / Herald file)

Cities start to deal with the fallout of I-976

Without the revenue car tabs brought in projects and road maintenance are likely to be postponed.

EVERETT — Snohomish County cities are set to lose millions of dollars for road maintenance projects with the passage of Initiative 976. The measure, approved by 58% of the voters in the county according to latest counts, reduces most car tabs to $30.

Many cities are still deciding next steps. One prepared for the measure’s passage by proactively adjusting its budget. All are likely to have to postpone construction projects and road maintenance.

Before the election Everett Mayor Cassie Franklin warned approval would have devastating impacts on the city.

The city is losing about $1.5 million — about 41% — of its street maintenance and paving budget, and another $700,000 that comes from the state for paratransit bus service.

In Everett, the measure passed with about 60% of the vote.

“I do feel our residents need a better understanding on what their taxes pay for and how much the city does with those dollars,” Franklin said. “It will impact what we are able to provide. There‘s no way around that.”

For 2020, the city has about $700,000 in contingency funds in the transportation benefit district that can be used to help cover the shortfall.

It’s not enough to cover the entire loss, Franklin said, but gives the city a few more months before feeling the impacts.

Early next year the city will start to prioritize projects.

“We don’t have the resources to do it all,” Franklin said.

In the long-term, the city has to either redirect funding from other city services or reduce road maintenance, said Kathleen Baxter, a city spokesperson.

Lynnwood won’t lose all the funding its transportation benefit district brings in. The $1.2 million that car tab fees brought in last year will disappear. But the $2.5 million collected by a 0.1% sales and use tax won’t.

The game plan, according to city spokesperson Julie Moore, is for staff to bring forward a balanced budget reflecting passage of the initiative to council members later this month. Then it’s up to the city council to either move forward with the reduced spending plan for streets or find money in other places, she said.

The passage of I-976 eliminates $700,000 — about 37% — of Edmonds’ streets budget, according to Mayor Dave Earling.

“I was heartened to see that Edmonds residents rejected I-976 by a vote of over 56%,” Earling said in a press release. “For these reasons, we will do our best not to place the burden of this revenue shortfall solely on the transportation budget.”

Mountlake Terrace’s Transportation Benefit District collects about $330,000 a year for repaving and reconstructing roads, and capital projects, said Scott Hugill, city manager.

The city council will identify next steps going forward in the coming months, Hugill said.

In Granite Falls the revenue from the Transportation Benefit District brought in $77,000 in 2018, accounting for about a third of the city’s street fund.

“We had already anticipated that the initiative would pass and have structured our 2020 budget and long-range financial forecast accordingly,” said Brent Kirk, Granite Falls city manager in an email.

Next year, the city plans to divert revenue from the city’s general fund into the streets fund, according to Kirk. Doing so will reduce money for other things such as city parks, building maintenance or community events.

”As the economy cools off — especially if we fall into a recessionary environment — the impacts will become more significant and may result in a reduction in levels of service,” Kirk said.

This could include a reduction in repairing potholes, repaving roads and constructing sidewalks.

As cities work to bridge gaps in transportation funding, officials will also be keeping close tabs on a lawsuit announced recently challenging the measure.

The Snohomish County cities are indirectly part of the lawsuit. The Association of Washington Cities, a group all five belong too, signed on as a plaintiff.

Lizz Giordano: 425-374-4165; egiordano@heraldnet.com; Twitter: @lizzgior.

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