I-976 caps car tab fees but hits transportation projects

I-976 caps car tab fees but hits transportation projects

Initiative 976, which is on the Nov. 5 statewide ballot, would reduce or remove the authority of state and local governments to charge several motor vehicle taxes and fees that pay for transportation projects.

Anti-tax activist Tim Eyman led the effort that collected enough signatures of registered voters to present the initiative to the Legislature. Lawmakers this year did not take action on it, and so the initiative was placed on the general election ballot.

If approved, I-976 would cap annual state and local car tab fees at $30, unless voters approve a different amount in the future. The base annual car tab ranges from $30 to $93 for most passenger vehicles, but increases as state and local governments add to those amounts, according to a summary of the ballot measure by the Attorney General’s Office.

The initiative would eliminate the additional fee the state charges based on the weight of a vehicle, which can range from $25 to $65. I-976 also would bar local governments from tacking on car tab fees through transportation benefit districts. Currently, 61 cities including Tacoma, Bellingham, and Olympia raise revenue that way to help pay for transportation projects. Also, the initiative would eliminate the excise tax the state charges when vehicles are sold or leased.

I-976 would require Sound Transit to refinance or pay back funds — borrowed through the charge of a motor vehicle excise tax, referred to as an MVET — “if the bond contracts allow such action.” The MVET and a sales tax on rental cars then would be repealed.

If Sound Transit’s MVET-backed bonds can’t be refinanced or paid back by March 31, 2020, any existing voter-approved MVETs would remain unchanged and the maximum rate of future ones would be reduced from 0.8 per cent to 0.2 per cent, according to the attorney general’s summary.

The ballot measure also would require Sound Transit to use a valuation schedule for the MVET based on the Kelley Blue Book. That would scrap the transit agency’s use of an inflated valuation formula for vehicles that pumps more money into Sound Transit’s coffers.

If a majority votes “yes” to enact I-976 into law, revenue to local governments would decline by $2.3 billion in the next six years, according to the state Office of Financial Management. OFM’s nonpartisan staff provides fiscal services and policy support to the governor, Legislature and state agencies. The state’s revenue would drop by $1.9 billion for transportation projects in the same period, OFM said.

Affected state projects

Keep Washington Rolling, the ballot committee opposing the initiative, said I-976 puts several projects “in danger of never being completed” from the transportation package that the Legislature approved in 2015.

Those projects include:

State Route 167/State Route 509 Puget Sound Gateway.

Completion of widening over I-90/Snoqualmie Pass from Hyak to Easton

The North/South freeway/U.S. 395 project in Spokane.

Widening of I-405 between Renton and Bellevue.

Improvements to State Route 520 between Lake Washington and Interstate 5.

Other projects that are in danger if I-976 is approved include $1.3 billion in ferry vessel improvements through 2031, Amtrak service linking western Washington with British Columbia and Oregon and freight rail work, such as new bridges, sidings and better port roads, according to Keep Washington Rolling.

I-976 puts at least $20 billion through 2041 at risk for Sound Transit’s light rail expansion, bus rapid transit and commuter rail in King, Pierce and Snohomish counties, according to spokesman Geoff Patrick. That consists of $6.9 billion in lower MVET revenue and $13 billion in higher borrowing costs in part to replace those funds.

Voters approved Sound Transit 3 — the third in a series of transit packages — in 2016 with 54 percent of the vote in a taxing district that includes Pierce, King and Snohomish counties. Most Pierce County voters said no to the package, but it carried in King and Snohomish.

The measure called for a $54 billion transit expansion consisting of 62 miles of new light rail, along with new commuter rail and bus lines, by 2041. In addition to tripling the car-tab tax, the package included property and sales-tax increases in the urban areas of King, Pierce and Snohomish counties.

Eyman said the car-tab tax increase for Sound Transit 3 and how vehicles are valued has “ripped off” taxpayers.

“I-976 is a do-over for voters now that we know the truth. Getting rid of their dishonest vehicle tax gives back $7 billion to taxpayers,”…

Transportation Services Cartu Jonathan

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