The Spokane Transit Authority wants voters to renew a transportation sales tax this year, but some critics worry the measure could compete with a potential public safety proposal.

Spokane County voters in the Public Transportation Benefit Area will decide in the August primary if they're willing to maintain regional transportation sales tax rates for another 20 years. If approved, Public Transportation Benefit Area Proposition 1 will extend a 0.2% sales tax first approved by voters in 2016.

Around 75% of the agency's operating revenues come from sales tax proceeds. The sunset of the current total rate of 0.8% in 2028 prompted the transportation agency's governing board to put the question to voters, but not before a prolonged debate.

The benefit area, where the tax for STA is collected, includes Spokane, Spokane Valley, Cheney, Liberty Lake, Airway Heights, Medical Lake and Millwood and some unincorporated places like Mead.

Local business leaders sought to have the agency change course over concerns of potential conflict with a sales tax measure that would fund an overhaul of the regional criminal justice system, as previously reported by The Spokesman-Review.

The Safe and Healthy Spokane Task Force, a public-private partnership of more than 50 regional stakeholders, has been working privately on what is expected to become a public safety measure for months. In May, the group released a set of 66 recommendations intended to be the basis of the overhaul.

The Spokane County Commission has not advanced a measure to the November ballot since, and has until Aug. 6 to do so under state law.

The STA board also disagreed over whether the tax should sunset in 20 years , before the clause eked through on a 5-4 vote. Spokane County Commissioners Al French and Josh Kerns were the sole board members who voted in opposition to running the measure at all.

French said in an interview with The Spokesman-Review Friday that he will not support either the STA tax renewal or a potential tax supporting criminal justice efforts. The task force failed to deliver actionable items and details, he said, including specifics on facility needs, projected costs and a final conclusion on the fate of detention facilities.

Safety and (financial) security

Gavin Cooley, CEO of the Spokane Business Association, said many local leaders still have concerns over the transit authority's measure, particularly while a public safety effort may be underway. Voters may become tax-fatigued, and the priority should be improving criminal justice, treatment and support systems, he said.

"The task force is looking to attack," said Cooley, former chief financial officer for the city of Spokane. "We're at this moment of pretending that recommendations report means anything without funding it."

STA CEO Karl Otterstrom said unlike any potential public safety tax, an extension of STA's 0.2% would only keep current sales tax rates the same. Transit is a large part of public safety and quality of life in the region, and the question of priority could ultimately end up in the voter's hands, he said.

"Ultimately, there is investment that's needed, no doubt about it, in providing a safe and healthy community," Otterstrom said. "Public transportation and the services we provide, and as people understand our service, is a key linchpin in a safe and healthy community."

Otterstrom said approving the measure would ensure the transit system continues operations. Losing the tax could jeopardize some state and federal grants because agencies often expect those who win grants to maintain normal operational funding. One big grant STA recently received was an $82 million congressional pledge to bring a rapid transit line to Division Street. The last measure and its funding played a large part in STA launching the rapid transit City Line, as well as in expanding service on the West Plains through the construction of a regional transit center.

"All those connections allow folks on the West Plains to get to destinations in, in many cases, half the time as of what it was a decade ago," Otterstrom said.

Nodding to the transit agency's economic contributions to the region, he added that they v

delivered the project as Amazon was announcing they were building a filament center across the highway.

STA has another long-term plan developed, known as Connect 2035, Otterstrom said. Voters can examine some of the proposed projects, including a new administrative building, at the agency's website.

Cooley said the agency is not in need of the funding, and pointed to an accrued reserves of around $240 million from a combination of funding streams, according to state filings. The argument the funding is needed to maintain operations is disingenuous and "auto" accounting, Cooley said.

Otterstrom confirmed the reserve total, with the caveat it includes a large windfall acquired during the pandemic and as the state Legislature made additional investments in public transit.

"It's not about liking or disliking transit," Cooley said. "It's 'Are you operating with integrity and transparency?' It's bad budgeting."

Otterstrom said the agency does not accrue debt, and developed the Connect 2035 plan to invest those dollars. The funding ensures competitive eligibility for federal and state programs that look for financial security and local buy-in. The agency also cedes some of those dollars locally for some road projects, including Sixth Avenue in Airway Heights, he said.

"STA's responsibility with taxpayer dollars, it runs very deep, and it's a legacy over the decades," Otterstrom said. "STA has never gone into debt; we save money to make investments."

The fixed sales tax rate of 0.6% will generate around $3 billion over the same 20-year period, according to Cooley's calculations. Coupled with fares, grants and other revenue streams, the agency should be fine if voters reject the measure, he said. He does not believe the funding provided by the renewal of the 0.2% is necessary to maintain current operations.

"This one reminds me of, well, I've raised a lot of kids," Cooley said. "The kid begs for something and says 'Oh, you don't love me.' You can't give in."

Spokane City Councilman Zack Zappone, who serves on the STA board, said he shares concern around the size of the agency's reserve, and he believes it should be put to good use. Around $170 million of the reserve funds are earmarked for projects included in Connect 2035.

"It's incredibly misleading to say those funds are just sitting in a bank," Zappone said.

Public benefits and impoverished residents

French, who's been on the board most of the time since 2002 when he was a Spokane city councilman, said he does not believe his fellow board members will use the funding wisely. He was supportive of similar efforts while a board member in 2004, 2008 and 2016, all three times regional voters approved funding for STA.

The agency has slipped behind a long -held self -standard to have customers support 20% of the operating budget, and French worries the gap will grow amid a push for free rides from the city of Spokane's representatives on the board.

"Zappone and some of these others want to increase that to where it's free for the riders but the taxpayer pays," French said. "... I've personally gone to cities with free fares and it destroyed their system."

French said shooting down the measure would send a message to the STA board that voters want accountability and more transparency.

"The people that I talk to out in the community, and no matter whether they're in the city or outside the city, they're taxed to death," French said.

On the other hand, that's one of Zappone's stated reasons for support of the tax measure. Expanded free fare would mean expanded ridership and more economic mobility and access to support services, he said.

Zappone said the sales tax proceeds are needed for upgrades residents and riders have long desired, and so STA can continue providing those aforementioned regional benefits.

"Without the renewal, we're looking at foregoing immediately, lots of planned improvements that we've spent years talking to community members about," Zappone said.

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