Pasco council imposes transportation sales tax hike without voter approval

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(The Center Square) - After months of consideration, the Pasco City Council approved a sales tax hike on Monday without voter approval after questioning whether residents should weigh in on a future ballot.

The tax increase passed 6-2, with Councilmember Leo Perales and Mayor Charles Grimm in opposition; it will take effect in six months to fund the city’s transportation benefit district approved last February.​

State law allows local governments to establish TBDs to generate revenue for transportation projects through a 0.1% sales tax or a $20 car tab fee. City officials could increase the vehicle registration fee every few years until it hits $50, but any tax increase beyond the current rate requires voter approval.

“I'm for maintaining our roads, but gas is high, and childcare is high, groceries are high, and this sales tax is going to impact the lower middle class in our community,” Perales said Monday. “If I were going to implement a councilmanic sales tax, I would look at my priorities, [which] would be public safety.”

According to Monday’s agenda, Pasco’s street fund is supported by stagnant utility and fuel taxes as operating expenses increase, resulting in a roughly $600,000 shortfall for the city’s 2025-26 budget.

Perales said past councils should have considered a TBD and the associated tax a few years ago, when the pavement preservation program started facing issues, and taxpayers weren’t as strapped for cash.​

Deputy City Manager Richa Sigdel said Monday that Pacso’s pavement preservation program amounts to roughly $8 million annually; however, the tax hike approved Monday will only generate $2.3 million.

Sigdel said the city will continue to fill any funding gaps through various grants and internal transfers.​

Monday's agenda suggests that the miles of road Pasco is responsible for maintaining have increased by 43% since 2010, while the size of its street crew has remained unchanged due to a lack of funding.

“Deferred maintenance is not a permanent savings; it's a financial liability,” said Councilmember Mark Figueroa. “Nobody likes a sales tax increase; however, I do want to address [Perales’] statement, that if previous councils didn't address this, that should be the argument for why we should address it now.”

The rest of the council agreed, framing Pasco’s tax increase as an investment in future infrastructure.

Grimm recognized the need for street funding, but said that he couldn’t vote in support at this time.

Last fall, there was a clear consensus among the council to establish a TBD and impose the sales tax.

Several members at the time expressed a desire to place it on a future ballot for voters later this year.​

According to Monday’s agenda, placing the tax on the November 2026 ballot would cost the city about $46,000, while placing it on a special election ballot in 2027 would cost about $350,000 to $375,000.​

Still, Grimm said he wasn’t comfortable passing the sales tax on Monday without asking voters first.​

“As much as I see the need… I'd feel more comfortable to leave it within the will of the voters,” he said.