Transportation Benefit Districts in Washington: What They Are and Why Cities Use Them

​Transportation Benefit Districts in Washington: What They Are and Why Cities Use Them

Washington communities need safe streets, reliable sidewalks, and transportation systems that help residents access jobs, schools, and local businesses. One common local tool for funding these needs is the Transportation Benefit District, also known as a TBD. This two-part series explains how TBDs work and what they mean for daily life in Washington. Part 1 covers what TBDs are, how they raise funds, and why local governments choose to use them. Part 2 discusses what TBDs mean for businesses and residents, including the most common benefits and concerns.

Potholes, cracked sidewalks, and traffic backups are more than just inconveniences. They affect emergency response times, customer access to stores, and the safety of pedestrians and cyclists in their neighborhoods. In Washington State, local governments often use a Transportation Benefit District, or TBD, to help fund transportation improvements and services.
A TBD is a local public agency formed by a city, a county, or a group of local governments. Its main goal is to raise local funds for specific transportation projects that benefit the community. Since the money is allocated specifically for transportation, it doesn’t get mixed into a city’s general budget, where it would compete with other needs.

What a Transportation Benefit District is

A Transportation Benefit District is a separate taxing district focused on transportation issues. It can be created by a city or county and is usually governed by the same elected officials on the city council or county commission.
A main aspect of TBDs is their purpose-specific nature. The revenues collected are designated for transportation enhancements and services, allowing communities to concentrate on local priorities such as road maintenance, sidewalk upgrades, and intersection safety improvements.

How TBDs can raise money in Washington

State law offers TBDs several revenue options, but most rely on two tools: a small local sales tax and vehicle license fees.
Vehicle license fees are collected during annual vehicle registration. In many cases, a local government can impose a fee of up to $20 without a vote if the district covers the entire area of the city or county that created it. A TBD can also seek voter approval for higher amounts, including fees up to $100 under state law.

The sales tax authority is also frequently used. Some TBD sales taxes require voter approval, while state law permits limited sales tax authority through a council vote in specific situations when the district encompasses the entire creating jurisdiction. In practice, communities often opt for voter approval for larger or longer-term funding.

TBDs also specify requirements for public accountability. State guidance outlines annual reporting on revenues, expenses, and improvements.

How local governments are using TBDs right now
Across Washington, TBDs are widely used, especially by cities. They are often used to fund practical, visible transportation projects that residents and businesses see every day.

Common uses include street maintenance, pothole repairs, sidewalk repairs, ADA curb ramp installations, safer crossing enhancements, traffic signals, and specific intersection upgrades. In some areas, TBD revenue also supports transit reliability or improvements that help buses operate more efficiently.

Many local governments also rely on TBD revenue as a dependable source of local funding that can enhance grant applications. When a city can demonstrate local matching dollars, it may become more competitive for state and federal transportation grants.

Examples of local TBD use include established city programs and newer county initiatives. Some jurisdictions describe TBDs as a way to fund specific improvements and prevent street maintenance from falling behind each year.

Why TBDs may be necessary

Transportation infrastructure is expensive and gets more costly over time. Costs for materials like asphalt and concrete, construction equipment, and labor tend to rise. At the same time, many cities and counties face a backlog of maintenance. When a community delays routine maintenance, the problem often worsens, and repairs later become much more costly.

TBDs can help by providing local governments with a dedicated, flexible tool to raise local funds. This allows a community to handle urgent repairs, address safety problems, and plan transportation projects more consistently than relying solely on grants or short-term budget decisions.

Transportation Benefit Districts provide Washington cities and counties with a reliable source of funding for local transportation projects. These districts support street maintenance, safety improvements, and other initiatives that help keep communities connected and functional. Additionally, they offer local leaders a faster way to address transportation issues compared to waiting for external grants.
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In Part 2 of this series, we will shift from the “how” to the “so what.” We will explore what TBDs mean for businesses and residents, including the most common benefits, the biggest concerns, and the trade-offs communities face when choosing between taxes and fees to fund transportation.

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• Washington State Legislature, Chapter 36.73 RCW: Transportation Benefit Districts (authority, governance, funding tools).
• MRSC, Transportation Benefit Districts (overview, funding mechanisms, local usage trends).
• Washington State Department of Licensing, Local transportation benefit district fees (vehicle fee explanation and common limits).
• Washington State Auditor’s Office (BARS), Transportation Benefit Districts (reporting and compliance guidance).
• City examples for local use and description: City of Spokane TBD page; City of Monroe TBD page.

This article was written with contributions from AI to organize the information and improve its readability.