Pasco Considers Sales Tax or Car Tab Hike to Fund New Road Repair District

The city council must decide how to pay for the newly created Transportation Benefit District.

Published on Feb. 23, 2026

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The Pasco City Council has voted to establish a new Transportation Benefit District to fund road repairs and maintenance across the city. The council is now considering raising the sales tax by one-tenth of a percent or implementing a car tab fee to generate an estimated $2.3 million in annual revenue for the district. The decision will be made within the next five weeks, with the tax increase taking effect 6-9 months after approval and remaining in place for up to 10 years.

Why it matters

Pasco's street fund has struggled to keep up with rising construction costs and a 20% increase in road miles over the past decade, leaving the city's street department stretched thin. The new district aims to address the city's growing infrastructure needs, but the council must weigh the impacts of a sales tax hike versus a car tab fee on residents.

The details

The Pasco City Council voted 6-1 to establish the new Transportation Benefit District, which will cover the entire city. The council is now considering two options to fund the district: raising the sales tax by one-tenth of a percent or implementing a car tab fee. A sales tax increase would generate an estimated $2.3 million per year for road repairs, maintenance, and snow/ice removal. The council would not need voter approval for a sales tax hike of up to one-tenth of a percent.

  • The council will hold a public meeting in the next five weeks to decide on the funding mechanism.
  • If approved, the sales tax increase would take effect 6-9 months after the council's decision.
  • The sales tax or car tab fee would remain in place for up to 10 years.

The players

Pasco City Council

The governing body of the city of Pasco, Washington that voted to establish the new Transportation Benefit District and will decide how to fund it.

Leo Perales

A Pasco city councilman who voted against establishing the Transportation Benefit District, stating he would only support sales tax increases for public safety resources.

Richa Sigdel

The Pasco deputy city manager who informed the council that the city's street fund "desperately needs" more funding as construction costs have risen while revenue has remained flat.

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What they’re saying

“I've been an opponent of increasing the sales tax. I'd rather see us increase sales tax for officers and those types of resources.”

— Leo Perales, Pasco City Councilman (tri-cityherald.com)

“The city's street fund 'desperately needs' more money.”

— Richa Sigdel, Pasco Deputy City Manager (tri-cityherald.com)

What’s next

The Pasco City Council will hold a public meeting in the next five weeks to decide whether to raise the sales tax or implement a car tab fee to fund the new Transportation Benefit District. Once the funding mechanism is approved, the state must be notified and the tax increase will take effect 6-9 months later.

The takeaway

Pasco's aging infrastructure and growing road network have strained the city's street maintenance budget, prompting the creation of a new Transportation Benefit District. The council's decision on whether to raise sales tax or car tabs will impact residents, but is necessary to address the city's pressing road repair needs.