North Bend proposes new taxing district, sales tax hike for infrastructure

A proposed sales tax increase in North Bend was applauded at the city's July 19 public hearing on the issue.

"I came tonight to support 100 percent your proposal," North Bend resident Sherwood Korssjoen told the North Bend City Council. "It gives us an opportunity to free up ... resources for some of the future projects that will bring significant benefits to the region, especially given that we have so many people coming in from outside of the community."

The increase, from 8.6 to 8.8 percent, is expected to raise about $400,000 specifically for road projects listed on the city's six-year transportation improvement plan. Because it's a sales tax, non-residents will also help pay for the city infrastructure that they also use and enjoy.

Before the tax can be implemented, however, voters must approve the increase in the November general election. Last week's action simply created the Transportation Benefit District that would have the authority to collect a voter-approved tax.

Public Works Director Ron Garrow briefed the council on the TBD and how it fit with the city's other options for funding street projects, general fund transfers, property taxes, and shrinking grant funds.

"We are running out of grant money," he said. "We are no longer a small city, and don't compete well against with the big guys, Seattle, Auburn, Bellevue, places like that. There's an expectation that we're not going to get a lot of grant money in the near future."

Garrow also highlighted some of the needed pedestrian safety improvements, and said the city was installing pavement overlay at the rate of 40,000 feet per year, but should be covering closer to 145,000 feet per year.

City Administrator Duncan Wilson said the cost of the increase to residents would be about $10 additional tax on every $5,000 worth of taxable goods they buy in North Bend. Food and fuel are tax-exempt.

Before approving the creation of the TBD, several council members noted that it was within their authority to implement a vehicle tax of up to $20 to without a public vote, but that they wanted to get voter approval on this tax.

The council, meeting as the governing body of the TBD, will hold a special meeting Tuesday, Aug. 2, at 7:15 p.m. to further discuss the sales tax increase.

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