Can Washington survive $30 car tab measure if it passes?
Aug 15, 2019, 11:52 AM | Updated: Aug 16, 2019, 10:31 am
With the primary pretty much wrapped up, the attention turns toward the November election, including a controversial measure to reduce car tabs to $30 per vehicle.
The $30 dollar car tab initiative — officially labeled I-976 — comes from anti-tax activist Tim Eyman, in his ongoing battle over the issue dating back to the 1990s.
According to him, it’s a simple choice for voters.
“The voters have twice voted for $30 tabs — unfortunately state and local governments have started jacking them back up again, and before the tab-creep takes them all the way up to what they used to be, we want to get them back to $30 again,” Eyman said.
But Andrew Villeneuve with the Northwest Progressive Institute leads the “No on I-976 campaign,” claiming it’s not that simple, and that voters need to understand what exactly is at stake.
“Initiative 976 would wipe out over $4 billion in state, regional, and local transportation funding over the next six to 10 years,” he described, citing the new fiscal impact numbers from the Office of Financial Management.
At the state level, I-976 caps car tabs for regular and electric vehicles and snowmobiles at $30, and ends a 0.3 percent sales tax that’s tacked on to new car sales. That’s estimated to lead to approximately $1.9 billion in losses for the state transportation budget over the next six years.
The effect on Sound Transit
For Sound Transit, 0.2 percent of an 0.8 percent increase approved by voters as part of ST3 would be allowed. They would also have to stop using a 1990s-era depreciation schedule to calculate a car’s excise tax, which overvalues vehicles. It would instead base it on Kelley Blue Book values.
Sound Transit would also have to retire, defease, or refinance bonds it has issued against the car tab tax, which fiscal estimates say may not even be possible.
Sound Transit estimates a $20 billion impact through 2041 if the measure passes, the combination of collecting $6.95 billion less in car tab revenues, and shelling out $13 billion more in higher interest costs in future transactions. Officials also forecast being forced to delay or cancel various transportation projects.
Then there’s the vehicle fees local Transportation Benefit Districts collect. Sixty-two cities benefit, but I-976 would end that, leading to a total loss of $58 million for those cities.
“So we’re looking at enormous losses for people all over Washington state,” Villeneuve said.
Car tabs typically pay for everything from sidewalks to various public transit options. Villeneuve noted that places like Seattle also use vehicle fees to expand neighborhood bus service.
In the end, he predicts everyone would suffer should I-976 pass.
“It’s local, it’s regional, it’s state funding. Many people are not aware that Amtrak Cascades is principally funded by vehicle fees, and if this initiative passes, Amtrak Cascades will be gutted,” Villeneuve said. “That includes our rail service to Vancouver, British Columbia, one of the most important services our State Department of Transportation operates.”
Is impact being exaggerated?
Eyman claims the financial impact is overblown, especially when we’re talking about Sound Transit’s funding.
“The fact is Initiative 976 is like a haircut when it comes to Sound Transit,” he said. “We’re only talking about a small percentage of money.”
Eyman claims the same is true at the state level.
“Most of the money that ends up going to roads comes from the gas tax, [and] we have one of the highest gas taxes in the nation,” he said, pointing out the state has a massive $3.5 billion tax surplus, more than enough money to backfill any affected program.
The campaign against I-976 has raised roughly 10 times as much as Eyman. While the “No on I-976” camp has garnered nearly $700,000, Eyman has raised just $70,000.
For Eyman, that discrepancy in funding has done little to dampen his resolve.
“This initiative is about trying to send a message to the government that they have to treat us fairly,” he said.
For the “No on I-976” camp, it’s largely an existential battle for Washington’s transportation system.
“Our message is simple — let’s keep Washington rolling,” Villeneuve said. “We can’t afford to go backwards.”