Cycle Vancouver

In this post we are going to try to figure out exactly how the City of Vancouver (Washington, USA) pays for its street and road funding. Here we should note that the City of Vancouver almost always uses the term “street” even when they are clearly talking about a road or a stroad. Because of this I will also use the terms street and road interchangeably.

Transportation Improvement Program (TIP) Financial Data

To begin to understand how our streets are funded we are going to start with the data provided by the 2025-2030 Transportation Improvement Program final draft. Specifically we are going to dig into the tables provided on page 20 and the associated graph on page 21. I should note that all of the math in this post starts with this document. We take as gospel that the numbers that the city has provided here are correct.

As a slight aside that is unimportant for our arithmetic, I want to note that the table on page 20 is actually comprised of four city funds. Before we go further, let’s figure out what these funds actually are.

Background on funds 102, 103, 330, and 331

If you check the Biennial Budget 2023–2024 you will find brief descriptions two of these funds but nothing on the other two. Fund 102 is the “Street Fund” and fund 103 is the “Street Funding Initiative - Operating Fund Total.” Both of these funds have associate reserves described on page 18 so they can run a deficit or a surplus in any given year. There actually isn’t any information provided for funds 330 or 331. We are left to deduce that whatever funds 330 and 331 are, they are funds that are used for transportation capital projects (as opposed to maintenance - those are funds 102 and 103). Not to worry, the opaque nature of this accounting isn’t particularly important for our analysis of where the revenues come from or where they go to.

Back to the Transportation Improvement Program Financial Data

Let’s flip back to page 20 of the TIP. I need to take a moment to note just how poorly this is put together by the city in this document. The line items are in no particular order. They aren’t sorted by amount, alphabetically, or in any other rational capacity as far as I can tell. Sometimes they list “Real Estate Excise Tax” and sometimes they just list “REET.” We will use REET to keep it short.

More importantly for our use, the numbers on page 20 don’t add up to form the graph on page 21 (labeled “2023 Streets Revenue Operating and Capital $54.9 Million”). The biggest discrepancy is that if you add up all the revenue in the tables on page 20 you get $55.3M. This is because the two revenue line items “Street Maintenance Fund” and “Energy Savings in Street Fund” are not actually revenue sources. They are just accounting for transferring money between different pools of money within the street fund. This was confirmed by the City in email.

Finally, the tables list “Employee Surcharge” (which is presumably the per-employee fee component of the Annual City business license fee) and “Transportation Special Revenue Fund” which are added together as “Business License Surcharge $2.2” on the graph. Upon careful examination of the Budget (page 87) we see that this is not incorrect because the Transportation Special Revenue Fund is 100% funded by Business License Fee & Surcharge. This too was confirmed by the City in email.

Since the city has done such a slipshod job at presenting this data let’s make our own table and graph. Here we will present the data on page 20 with “Street Maintenance Fund” and “Energy Savings in Street Fund” removed since they are not actual revenue sources. Then we’ll lump the “Employee Surcharge” and “Transportation Special Revenue Fund” together into “Business License Surcharge” to match the graph on page 21 (this also matches the terminology in the Budget).

Tabular representation of 2023 revenues

Here we have reformatted the data provided by the city in a more comprehensible form by focusing just on 2023. That is, this is 2023 revenues by source and use. We use 2023 since it is the most recent year that is available, for obvious temporal reasons. This table now matches the graph on page 21 of the TIP.

Source	Street Maintenance	Debt Service	Transportation Capital	Total	% of total
Business License Surcharge		1,937,563	288,070	2,225,633	4.06%
Developer Participation			449,082	449,082	0.82%
General Fund	15,035,110	204,113		15,239,223	27.78%
Grants	1,223,726		3,804,553	5,028,279	9.16%
Miscellaneous	3,361,991		1,492,512	4,854,503	8.85%
Motor Vehicle Fuel Tax	3,660,024			3,660,024	6.67%
REET	3,678,721	499,725	198,916	4,377,362	7.98%
Street Funding Strategy	6,659,788		10,605,000	17,264,788	31.47%
Traffic Impact Fee			1,767,072	1,767,072	3.22%
Total	33,619,360	2,641,401	18,605,205	54,865,966	100.00%

Total 2023 revenues

This is just a recreation of the graph on page 21 of the TIP, based on our table data above.

But this graph almost raises more questions than it answered. Where does the revenue for the General Fund come from? Also, WTF is a Street Funding Strategy?

Street Funding Strategy (SFS) Financial Data

It turns out that the Street Funding Strategy is just a bunch of (other) sources of revenue to pay for streets. There is actually an easily comprehensible table and graph on page 7. The data in the table and the graph even matches.

Note: TBD here means Transportation Benefit District. Also note that when they list “Paid-Off Debt” they mean ”[a]s street bond debt service is repaid, use funds previously needed for debt payments for streets.” This is actually bullshit, “Paid-Off Debt” isn’t a revenue source. It’s just a way of freeing up cash flow from an actual source of revenue. However, when I asked the city in email what the actual sources of revenue are they replied that ”[b]ack at our highest point of debt we had about $5 M annually. Most of which was paid by the general fund. Currently our annual debt is about $2.8 M annually ($5M-$2.8M =$2.2 M which is the fallen off debt). Therefore, the $2.2 M of fallen off debt is from the general fund.” So I’m going to account for it as revenue from the general fund.

Folding the data back into our graph

Now that we know where the SFS revenues actually come from and in what proportions we can fold that data back into our table and our graph.

Tabular

Source	Street Maintenance	Debt Service	Transportation Capital	Total	% of total
Business License Surcharge	133,196	1,937,563	500,170	2,570,929	4.69%
Developer Participation			449,082	449,082	0.82%
General Fund	15,967,480	204,113	1,484,700	17,656,293	32.18%
Grants	1,223,726		3,804,553	5,028,279	9.16%
Miscellaneous	3,361,991		1,492,512	4,854,503	8.85%
Motor Vehicle Fuel Tax	3,859,818		318,150	4,177,968	7.61%
REET	3,678,721	499,725	198,916	4,377,362	7.98%
Sales tax	1,997,936		3,181,500	5,179,436	9.44%
Vehicle License Fee	2,264,328		3,605,700	5,870,028	10.70%
Traffic Impact Fee			1,767,072	1,767,072	3.22%
Utility Tax	1,132,164		1,802,850	2,935,014	5.35%
Total	33,619,360	2,641,401	18,605,205	54,865,966	100.00%

Graphical

What he have here is pretty damning. Why are Vancouver roads funded more by Real Estate Excise Taxes than by Motor Vehicle Fuel Tax? But let’s try to get an even better look by breaking up that big slice of “General Fund.”

General Fund

We are going to use page 79 of the budget to get a better sense where we the General Fund revenues come from. There are 28 sources listed plus a bunch of inter-fund transfers. So I’m going to try to simplify it just a little bit for us. I’m going to ignore all internal transfers, including internal lease revenue. I’m going to lump “Brokered Natural Gas,” “Cable TV,” “Electric Tax,” “Telephone Tax,” “Utility Tax on Drainage,” “Utility Tax on Sewer,” “Utility Tax on Solid Waste,” and “Utility Tax on Water” into “Utility Tax.” I’m going to lump “Excise Tax,” “Gambling Taxes,” and “Liquor and Marijuana Taxes,” into “Sales and Use Tax.” I’m going to lump “External Leases” and “Interest” into “Leases and Interest.” Finally I’m going to lump all grants together.

2023 General Fund revenue tabular

This is our simplified view of the 2023 general funds revenue.

Source	Amount	% of total
Business License Fee & Surcharge	4,025,626	1.81%
Criminal Justice	824,000	0.37%
Development Fees	1,922,655	0.86%
Fines	866,000	0.39%
Grants	1,422,168	0.64%
Leases and Interest	2,294,000	1.03%
Miscellaneous Revenue	1,566,712	0.70%
Property Tax	72,065,335	32.33%
Public Safety Fees and Charges	180,070	0.08%
Recreation and Parks Fees	3,260,000	1.46%
Sales and Use Tax	70,562,703	31.65%
Utility Tax	63,944,505	28.68%
Total	222,933,774	100.00%

2023 General Fund revenue graphical

Folding the data back into our graph part 2

Now that we know where the General Fund revenues actually come from and in what proportions we can fold that data back into our table and our graph. To the people who might say “you can’t do that” I’d says that yes, I can. This is because money is fungible. It is entirely appropriate to account for the general fund revenues in proportion to where they came from.

Final product tabular

This is our final product for how the streets in Vancouver are funded.

Source	Street Maintenance	Debt Service	Transportation Capital	Total	% of total
Business License Surcharge	421,528	1,941,249	526,980	2,889,757	5.27%
Criminal Justice	59,018	754	5,488	65,261	0.12%
Development Fees	137,709	1,760	12,805	152,274	0.28%
Developer Participation			449,082	449,082	0.82%
Fines	62,027	793	5,767	68,587	0.13%
Grants	1,325,588	1,302	3,814,024	5,140,914	9.37%
Leases and Interest	164,306	2,100	15,278	181,684	0.33%
Miscellaneous	3,474,206	1,434	1,502,946	4,978,586	9.07%
Motor Vehicle Fuel Tax	3,859,818		318,150	4,177,968	7.61%
Property Tax	5,161,631	65,981	479,943	5,707,555	10.40%
Public Safety Fees and Charges	12,897	165	1,199	14,261	0.03%
Recreation and Parks Fees	233,495	2,985	21,711	258,191	0.47%
REET	3,678,721	499,725	198,916	4,377,362	7.98%
Sales tax	7,051,942	64,606	3,651,435	10,767,983	19.63%
Vehicle License Fee	2,264,328		3,605,700	5,870,028	10.70%
Traffic Impact Fee			1,767,072	1,767,072	3.22%
Utility Tax	5,712,146	58,546	2,228,709	7,999,401	14.58%
Total	33,619,360	2,641,401	18,605,205	54,865,966	100.00%

Final product graphical

A Simplified view of user fees

Finally, let’s create a simplified view of how Vancouver funds its roads. Here we will focus on the revenue sources that are obviously paid by drivers through some sort of user fee. I’m hesitant to even include the Traffic Impact Fee (TIF) here. This is a fee paid by developers to compensate the City/County for increases in traffic due to their development. But since it is paid on behalf of drivers for the traffic that drivers will create I’ll let it slide.

Tabular

Source	Street Maintenance	Debt Service	Transportation Capital	Total	% of total
All other sources	27,495,214	2,641,401	12,914,283	43,050,898	78.47%
Motor Vehicle Fuel Tax	3,859,818		318,150	4,177,968	7.61%
Vehicle License Fee	2,264,328		3,605,700	5,870,028	10.70%
Traffic Impact Fee			1,767,072	1,767,072	3.22%
Total	33,619,360	2,641,401	18,605,205	54,865,966	100.00%

Graphical

Next steps

So, as we’ve shown, over 78% of all Vancouver road funding comes from sources other than vehicle user fees. Obviously, I have opinions about that. But this post isn’t about that. In our next installment of this series we’ll look at where all this street funding revenue is actually put to use. Finally, at some later point in time, you can expect at least one opinion piece about how this is illiberal anti-capitalist bullshit. If you happen to find any errors in my math you can email me at sfg.south.cliff at the email server that the Gs use. Alternatively you can find me at our happy hour.

Special thanks

I would like to note that after I spent days digging through city documents to write this post Alyssa Wheeler was kind enough to spend days double checking my math. I am incredibly grateful for her work to validate my work. Of course, none of this would be required if the city published a transparent report about how they actually pay for the roads.