Lynnwood Council passes car tab relief, increases utility tax rates

LYNNWOOD, October 31, 2022—The Lynnwood City Council passed car tab relief, rejected utility tax relief yet approved increased Water, Sewer, and Stormwater Utility Rates at its Business Meeting last Monday, October 24.

Car Tab Relief Passes

There was considerable back and forth on car tabs. Car tab relief, titled Ordinance 3416, ultimately passed 4-2 with Councilman Joshua Binda abstaining, indecisive on where he stood. Councilmembers George Hurst, Jim Smith, Shirley Sutton, and Patrick Decker voted yes with Councilmembers Shannon Sessions and Julieta Altamirano-Crosby voting no.

In 2007, the Washington State Legislature allowed city governments to create transportation benefit districts (TBD) and impose a sales tax to fund local transportation projects. In November 2016, voters approved a 0.1% sales tax increase to fund Lynnwood roads through the TBD. The tax increase went into effect on April 1, 2017, lasts for 10 years, and is expected to generate approximately $2.5M per year.

The TBD is directly governed by the mayor and city council. The TBD wholly or partly funds preventative and routine pavement maintenance and reconstruction, street and traffic maintenance and operations, and other capital projects as identified in the City’s Transportation Plan.

Councilwoman Sessions cited that in her eight years on the city council, the street budget has been “extremely low,” adding that the car tabs aren’t new taxes and that they go towards improving Lynnwood streets.

“Why would I take away this cost right now as we are finishing up our infrastructure, planning for our downtown core, the link light rail,” Councilwoman Sessions said. “It would be irresponsible.”

Conversely, Councilman Smith advocated for passing car tab and utility tax relief for Lynnwood residents and using general fund dollars to finance other projects funded by utility taxes and car tabs.

“If we were to get rid of these two taxes and help the people of Lynnwood then we could use our other resources, such as the tremendous amount of dollars from the sales tax to fill that gap,” Councilman Smith said.

Utility Tax Relief Fails

Next was utility tax relief on 6% utility tax relief. Ultimately, Ordinance 3417 regarding utility tax relief failed 5-2 with Councilmembers Hurst, Sessions, Altamirano-Crosby, Decker, and Binda voting no and Councilmembers Smith and Sutton voting yes.  

Utility taxes are allocated for the City’s General Fund, which funds all of city departments.  Single-family residential, commercial, and multifamily residential accounts each provide approximately one-third of utility operating revenue. Single-family residences pay approximately $6 per month in utility taxes.

Councilwoman Sessions said that although Lynnwood has a 6% utility tax rate on all utilities, that they are low comparable to other cities in south county. Bothell, Edmonds, and Mountlake Terrace have utility tax rates on water alone at 11.15%, 17.07%, 13.8%, respectively. Sewer and stormwater tax rates vary from the city-to-city but equal to or are higher than Lynnwood’s flat 6%.

Councilman Patrick Decker voted against the utility tax ordinance with the proviso that councilmembers work “in good faith” together to look where to trim parts of the budget since the council had just passed car tab relief.

“I’m going to trust that people are going to figure out how to solve those problems in good faith,” Councilman Decker said. “That means we’ll be tough in some areas that are priorities but that’s what compromise is all about and what a governing body does.”

Utility Tax Rate Increase Passes

The City Council unanimously passed Ordinance 3426, increasing the Water, Sewer, and Stormwater Utility Rates.

Councilwoman Shannon Sessions clarified that the rates increase is not “adding any new taxes” and Councilman Jim Smith praised the effectiveness of the Public Works Department and underscored the rates increases are paying for themselves.

Other Business

In the other business, the City Council issued two declarations pertaining to the month of October.

  • Councilwoman Sessions, on behalf of the Mayor and the City Council, issued a proclamation declaring November 11, 2022 as Veteran’s Day.
  • City Council President George Hurst, also on behalf of the Mayor and City Council, issued a proclamation declaring October 2022 as Domestic Violence Awareness Month and the third week of October as YWCA Week Without Violence in Lynnwood.

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One thought on “Lynnwood Council passes car tab relief, increases utility tax rates

  • November 1, 2022 at 10:21 AM
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    Thanks to Jim Smith and George Hurst for their persistence on this. Lynnwood voters have been clear on the car tab fee. Arguments about retaining the fee by the mayor and other council members for sidewalk funding sources are easy to fix. Ask voters for a bond to address this in a meaningful way.

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