Uncertainty in state and federal government may waylay — or at least pause — discussions on Island Transit’s governing board about potentially lowering the amount of sales tax the agency collects.

Island County Commissioners Melanie Bacon and Jill Johnson kicked off the issue at a transit board meeting last month by asking the staff to give a presentation about the sales tax.

Bacon said other agencies in the county need “that money.” She pointed out that the ICOM emergency dispatch center will be asking residents for a sales tax measure this year. In addition, a new county jail could be partly funded with sales taxes.

“If we are collecting more than we need, we need to right size that, in my opinion,” she said.

Island Transit Executive Director Melinda Adams said during a presentation last Friday that state officials are in the process of making billions of dollars in cuts, and transit isn’t among the governor’s top priority for transportation. In addition, the U.S. Department of Transportation lost 33% of its workforce, which means “delays in funding are certain” while some grants could be in jeopardy, she said.

“With all of the funding uncertainty that Island Transit is facing, a sales tax reduction will have far-reaching consequences at this time,” Adams said. “Our reserves are critical to ongoing operations and necessary for required capital improvements.”

She added that sales tax collections are flattening out.

Island Transit collects sales tax at a rate of 0.9%. The current total sales tax rate in the unincorporated county is 8.8% while it is 9% in Oak Harbor, according to the state Department of Revenue. While Island Transit’s tax doesn’t directly limit other agencies, some officials feel that residents might balk at raising the rate further to fund other projects.

The transit board is made up of the three county commissioners and a council member from Oak Harbor, Coupeville and Langley.

Johnson, a Republican, noted during the meeting last month that the agency has a “very healthy” fund balance and has done an excellent job of living within its means. As of Jan. 1, Island Transit has more than $69 million in cash reserves, according to a recent Island Transit Finance Report. That’s a giant amount for an agency with an annual budget of $37 million and means the agency will be able to weather short-term cuts in grants.

“I’m not sure we need the full amount as intensely as we have in the past,” she said. “I’m not sure we don’t.”

Bacon, a Democrat, said she definitely would be interested in getting more information.

“What government very seldom does is to go back and say, ‘This sales tax provided a wonderful service for us. Is it as much as we need or is it maybe a little bit more than we need?’” she said.

While the two commissioners emphasized that they were only gathering information, their request sparked groups and transit proponents as far away as Seattle to contact the News-Times and express concern about any potential change to Island Transit. The agency is known for offering fare-free bus rides and other transportation services on Whidbey and Camano islands.

Natalie Lubsen of the Transportation Choices Coalition wrote in an email that other transit agencies that considered cutting services were met with public backlash.

“Not only would this directly reduce the agency’s funding, but voluntarily decreasing the sales tax would also make Island Transit ineligible to receive transit support grants from the state, which the Climate Commitment Act funds,” she wrote. “The agency faces increased financial uncertainty already, with federal grants potentially at risk and a big transportation budget deficit at the state level, which may or may not impact them.”

During her presentation Friday, Adams explained the complexities of the agency’s revenue sources and how even a small cut in the sales tax rate would snowball into a large revenue decrease because of the inter-connectedness of the funding sources. Island Transit, for example, receives “sales tax equalization” funds from the state which would be decrease if the sales tax rate is lowered.

After the presentation, Bacon said she agreed that now isn’t the right time to consider a tax change because of the uncertainties at the state and federal level. She said she would be very interested in retuning to the issue later.

Langley Councilmember Craig Cyr said he agreed with Bacon and added that he was “skeptical of the entire proposition of doing so.”

Johnson countered that she doesn’t have an agenda concerning the value of transit and was just gathering information to make the best decisions. She also questioned whether it makes sense for government employees who benefit from a tax to give a presentation about the need for the tax.

“Our job is to question the organization that we are leading,” she said. “It’s not just to like them; it’s not just to believe in the mission; it’s not just to listen. It’s to ask the tough questions.”