Lynnwood’s car tab fee and utility tax on chopping block again

City Council members will talk about repealing them. If they do, the mayor is prepared to veto their actions.

Lynnwood

LYNNWOOD — City Councilmembers are eyeing a repeal of the city’s car tab fee and utility tax, again.

The council on Monday will consider separate ordinances to erase the $40 vehicle license fee and 6% utility tax on Jan. 1, 2023.

Neither proposal is new.

In May 2020, a majority of the council voted to end the utility tax. Last fall, four of the seven approved a measure to get rid of the car tab fee. Each time the former mayor, Nicola Smith, vetoed their decisions and the council failed to override her.

Action is unlikely Monday because Mayor Christine Frizzell would be certain to veto them. She voted against repealing those measures when she served on the City Council.

“Her opinion about those has not changed,” said Julie Moore, the city’s communications manager. “It is our recommendation that the discussion be done as part of the regular budget process.”

Council president George Hurst is an outspoken proponent of tax relief for residents. He acknowledged Friday that “if we pass them, they’ll be vetoed.”

“I’m thinking now that the council is more inclined to look at this with the budget process in the fall,” he said. “There’s so much uncertainty now about our economy. We don’t know if we want to take away these fees.”

On Oct. 25 the council voted 4-3 to stop charging city-imposed vehicle registration fees, on top of the state’s base charges. Lynnwood gets about $1 million per year from the fees, which pays for street maintenance, preservation and capital projects.

Smith issued her veto Nov. 3.

“No one likes to pay taxes and fees, but vehicle license fees help offset the enormous cost of providing safe streets for Lynnwood’s drivers,” she wrote in her veto message. “Eliminating vehicle license fees has far-reaching consequences that are not in the best interest of Lynnwood.”

The utility tax costs occupants of single-family residences about $5.25 a month, according to a February analysis by city finance director Michelle Meyer. Amounts vary for commercial properties and apartments.

Overall, utility tax collections are expected to bring in $2.9 million for the current two-year budget. Those dollars are going into the general fund used to pay for the city’s day-to-day operations. Without that revenue, spending would need to be pared.

“If the City Council chooses to eliminate the utility tax on City-owned utilities, the Council will also need to provide direction regarding service reductions to balance the budget,” Meyer wrote in February when the council restarted the conversation.

After the council passed the tax repeal in late May 2020, Smith vetoed it in June. An attempt to override the veto failed when Hurst could not get the five votes needed.

Monday’s meeting begins at 6 p.m. in the council chambers at City Hall, 19100 44th Ave. W Lynnwood. It can also be attended remotely. For information, and links, go to the city website, https://www.lynnwoodwa.gov/Home.

Herald writer Ben Watanabe contributed to this report.

Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com; Twitter: @dospueblos.

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