Annual car tab fees could soon be a thing of the past for Ridgefield drivers if the city’s proposed sales tax increase is passed in the November general election.
The sales tax proposition calls for a 0.2 percent increase to go into effect six months after the election and then expire in 10 years. The tax hike equals 20 cents for every $100 spent.
“If voters pass the sales tax, staff will immediately bring an ordinance to the council to repeal the car tab,” City Manager Steve Stuart said.
If the sales tax fails to get enough votes though, Ridgefield car owners will actually see their car tab fees increase another $10 starting in January.
The tax increase is expected to generate nearly $7.6 million over those 10 years while the higher car tab fees would raise nearly $5.4 million over the same period.
Stuart said the council began looking at how to fund road maintenance and preservation in July. The city had already increased the general fund allocation and created a Transportation Benefit District in 2018 but still found the existing $20 car tab wasn’t enough to cover the costs. According to the district’s web page, the city still faced a $10 million deficit for street maintenance.
The city council decided to put the decision to voters after reviewing options presented by city staff and listening to input from residents.
Of the $7.6 million in sales tax revenue, a little over $3 million would come from construction retail sales and $4.5 million from general retail sales. Construction retail includes all construction materials purchased within or delivered to Ridgefield. General retail includes consumer goods and services purchases like buying household items or clothing.
Stuart noted the revenue estimates for both the sales tax and car tab fees are just that, estimates. However, he said projections for existing sales commercial growth were conservative and “based on reasonable expectations.”
The increased tax dollars would allow the city to fund a full schedule of maintenance and repairs, rather than only responding to complaints. According to a city report, “Proper road maintenance saves taxpayers 71 percent in road repair expenses over five years. Funding and prioritizing regularly scheduled pavement preservation and maintenance saves taxpayers money and keeps Ridgefield streets in good condition.”
But Doug Wakefield, owner of Western Star Northwest, would rather see the city implement a higher car tab fee. In his “against” statement for the Voters’ Pamphlet, Wakefield said even a small tax increase could negatively impact his business, which sells commercial vehicles. He said it may not sound like much of an increase, but the tax hike would add between $350 and $500 to the cost of a commercial vehicle.
“With Oregon having no sales tax, we are already at a disadvantage in pricing our products. Any increase in the sales tax only makes us less competitive, leading to a decrease in sales,” Wakefield said.
