The Washington County Board of Commissioners reviewed a proposal to increase the county’s Transportation Sales, Use & Excise Tax during an April 13 workshop.
The board had previously studied the proposal for nearly a year during 2019, but suspended discussion once the COVID-19 pandemic emerged in March 2020.
The tax, generally referred to as the Local Option Sales Tax, state law allows local governments to levy a sales and use tax of up to .5% and a vehicle excise tax of up to $20 per vehicle. Washington County currently has a .25% sales and use tax, and a $20 vehicle excise tax. Fifty-one other counties in the state have similar taxes. The county board must conduct a public hearing to raise the tax.
The revenue raised by the tax may be used for roads or bridges, and for both capital and operating costs of transit projects.
The board reviewed a proposal to increase the county’s Local Option Sales Tax to .5%, and maintain the $20 excise tax. The board also reviewed a list of projects that would benefit from the increased sales tax. If the tax were to be increased, it is estimated that it would raise $21 million in 2022, as opposed to the $10.8 million that was raised by the tax in 2020.
Previously, the county was part of the Counties Transit Improvement Board, which imposed a .25% sales and use tax, and a $20 per vehicle excise tax. That board was disbanded in 2017, and Washington County maintained the taxes, and approved its uses.
Transportation funding from state sources is not keeping pace with the expense of building roads and bridges, and the proceeds from both the motor vehicle leased tax and the wheelage tax are not increasing. With Washington County’s population growth, the county is responsible for expanding highways to meet that growth, and rebuilding interchanges to improve safety for the traveling public.
General road maintenance is also falling behind, and the pavement on county roads is deteriorating more quickly than there are resources to repair it. Other road projects in the county are backlogged.
If the board chooses to move the tax increase ahead, it would set a public hearing, and then make a decision later this year. The county must report its decision to the state Department of Revenue before the tax may be collected.