NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Thursday, January 9th, 2020

Diverting sales tax revenue from vehicle sales will not get us beyond I‑976, Republicans

About two months ago, the ear­ly returns in the Novem­ber 2019 gen­er­al elec­tion indi­cat­ed that Tim Eyman’s incred­i­bly destruc­tive Ini­tia­tive 976 would pass, set­ting in motion an urgent and heat­ed dis­cus­sion about the future of trans­porta­tion fund­ing in Wash­ing­ton State. I‑976 ulti­mate­ly did pass, with 52.99% of the 45.19% of Wash­ing­to­ni­ans who turned out vot­ing yes, and 47.01% vot­ing no.

The objec­tive of Eyman’s I‑976 was to repeal bil­lions in bipar­ti­san, vot­er-approved trans­porta­tion fund­ing at three lev­els (state, region­al, and local), with the aim of elim­i­nat­ing fund­ing for all non-high­way modes of trans­porta­tion.

The mea­sure is cur­rent­ly on hold as a result of a court-ordered injunc­tion, but that has­n’t stopped Repub­li­can law­mak­ers from argu­ing that it should be imple­ment­ed (per­haps leg­isla­tive­ly) any­way. Of course, imple­ment­ing I‑976 would wreck the fis­cal foun­da­tion of the state’s trans­porta­tion sys­tem, result­ing in the can­cel­la­tion or delay of a long list of projects, includ­ing high­way projects.

Repub­li­can law­mak­ers know that bud­gets can­not be bal­anced using Tim Eyman talk­ing points. Pub­lic ser­vices cost mon­ey, and mon­ey has to come from some­where. So they’re disin­gen­u­ous­ly propos­ing to divert fund­ing from schools, men­tal health, and oth­er essen­tial pub­lic ser­vices to make up the short­fall in the trans­porta­tion bud­get that would result from the imple­men­ta­tion of I‑976.

In a piece iron­i­cal­ly titled “Beyond I‑976: We need a bet­ter way to fund high­way projects,” Repub­li­can Sen­a­tor Cur­tis King of Yaki­ma argues:

Some of my Sen­ate col­leagues are offer­ing a sen­si­ble long-term solu­tion for Washington’s trans­porta­tion needs — shift­ing the state sales-tax rev­enue from vehi­cle pur­chas­es into the state trans­porta­tion bud­get over sev­er­al bien­ni­um instead of con­tin­u­ing to put it in the state oper­at­ing bud­get. The oper­at­ing bud­get has seen huge increas­es in rev­enues, up 17% this bien­ni­um alone.

It’s log­i­cal, giv­en the rela­tion­ship between vehi­cles and trans­porta­tion infra­struc­ture, and would allow law­mak­ers to main­tain and increase trans­porta­tion invest­ments with­out adding a tax. That sounds like an approach the vot­ers would appre­ci­ate.

Rob­bing Peter to pay Paul is nei­ther log­i­cal nor an approach that the vot­ers will appre­ci­ate. A clear major­i­ty of 56% of like­ly 2019 Wash­ing­ton vot­ers sur­veyed by NPI’s poll­ster Pub­lic Pol­i­cy Polling after the con­clu­sion of last year’s leg­isla­tive ses­sion in May said that they agreed that Wash­ing­ton’s pub­lic schools were under­fund­ed, and that state rev­enue need­ed to be raised to ful­ly fund them.

This was after the Leg­is­la­ture had adjourned on April 28th hav­ing passed sev­er­al mod­est rev­enue reforms that increased fund­ing for our essen­tial pub­lic ser­vices.

Pub­lic schools and high­er edu­ca­tion make up the major­i­ty of expen­di­tures sup­port­ed by the state’s gen­er­al fund, which the state sales tax is the pri­ma­ry source of rev­enue for. So what Repub­li­cans are real­ly doing here is propos­ing raid­ing edu­ca­tion fund­ing so that they can have cheap vehi­cle fees and high­way projects.

The edu­ca­tion of our youth is our state’s para­mount duty — the Con­sti­tu­tion is very clear about this — but Repub­li­cans do not care. Their pri­or­i­ty is their cars. Not our kids, who are our future. Nope, got­ta put our cars first and per­pet­u­ate our cul­ture of auto depen­dence. Noth­ing is too good for our cars!

Gov­er­nor Inslee has jus­ti­fi­ably dis­missed this bad idea already, telling reporters at his bud­get roll­out press con­fer­ence last month that it would be irre­spon­si­ble.

But the absur­di­ty of this pro­pos­al actu­al­ly goes even deep­er.

See, Ini­tia­tive 976 did­n’t just tar­get vehi­cle fees for repeal.… it also tar­get­ed for repeal a por­tion of the sales tax on motor vehi­cles. Yes, the very rev­enue source Repub­li­cans like Cur­tis King are talk­ing about rely­ing on to get us “beyond I‑976” was among the tax­es and fees that Eyman tar­get­ed with I‑976!

You’d be for­giv­en for not know­ing this if you weren’t aware, because it was not men­tioned in the bal­lot title or the voter’s pam­phlet state­ment argu­ments sec­tion.

But if you read the text of the ini­tia­tive, or the fis­cal impact state­ment, you can see that the mea­sure does in fact attempt to repeal more than just vehi­cle fees.

Sec­tion 7 of I‑976 repeals the fol­low­ing por­tion of RCW 82.08.020:

(3) Begin­ning July 1, 2003, there is levied and col­lect­ed an addi­tion­al tax of three-tenths of one per­cent of the sell­ing price on each retail sale of a motor vehi­cle in this state, oth­er than retail car rentals taxed under sub­sec­tion (2) of this sec­tion. The rev­enue col­lect­ed under this sub­sec­tion must be deposit­ed in the mul­ti­modal trans­porta­tion account cre­at­ed in RCW 47.66.070.
(4) For pur­pos­es of sub­sec­tion (3) of this sec­tion, “motor vehi­cle” has the mean­ing pro­vid­ed in RCW 46.04.320, but does not include:
(a) Farm trac­tors or farm vehi­cles as defined in RCW 46.04.180 and 46.04.181, unless the farm trac­tor or farm vehi­cle is for use in the pro­duc­tion of mar­i­jua­na;
(b) Off-road vehi­cles as defined in RCW 46.04.365;
© Non­high­way vehi­cles as defined in RCW 46.09.310; and
(d) Snow­mo­biles as defined in RCW 46.04.546.

The rea­son why Eyman tar­get­ed this por­tion of the sales tax on motor vehi­cles for repeal along with vehi­cle fees at the state, region­al, and local lev­els is sim­ple: His objec­tive with I‑976 was to destroy fund­ing for non-high­way modes. “Thir­ty dol­lar car tabs” was his slo­gan, but it was a smoke­screen.

The real objec­tive of I‑976 was to dev­as­tate fund­ing for tran­sit, bike paths, side­walks, and even local roads, because Eyman is ide­o­log­i­cal­ly opposed to tax dol­lars going to any trans­porta­tion pur­pose except for high­ways.

Notice in the excerpt above that it says “the rev­enue col­lect­ed under this sub­sec­tion must be deposit­ed in the mul­ti­modal trans­porta­tion account.”

That mul­ti­modal account, as its name sug­gests, ben­e­fits all trans­porta­tion modes, not just high­ways. And that’s why Eyman tar­get­ed it. With I‑976, he want­ed to do as much dam­age as he could to mul­ti­modal infra­struc­ture in one fell swoop.

It mat­ters not to Eyman that his “thir­ty dol­lar car tabs” slo­gan is a lie, as his real aim was — and is — to defund tran­sit and peo­ple-ori­ent­ed trans­porta­tion infra­struc­ture.

It is cru­cial that every­one in Wash­ing­ton under­stand this, which is why I’m choos­ing to be repet­i­tive here and restate this impor­tant point sev­er­al times. Cheap car tabs are mere­ly a side effect of Tim Eyman’s real agen­da.

When The News Tri­bune asked Eyman about the fact that I‑976 would not actu­al­ly reduce vehi­cle fees to thir­ty dol­lars like it promised, Eyman’s response was essen­tial­ly to shrug… because he real­ly and tru­ly does­n’t care.

He admit­ted, on the record, that I‑976 does­n’t do what it claims to do.

DOL said the ini­tia­tive did not repeal the fol­low­ing:

  • $8 ser­vice fee, which goes to the office that process­es the trans­ac­tion or to fund state fer­ry replace­ments if car tabs are renewed at a coun­ty audi­tor or at the DOL.
  • $4.50 fil­ing fee, which is kept by the coun­ty in which the car tab tax is paid.
  • 50 cent DOL license ser­vice fee, which is used to sup­port its com­put­er sys­tem and reim­burse­ment of coun­ty licens­ing activ­i­ties.
  • 25 cent license plate tech­nol­o­gy fee, which also is used to pay for DOL com­put­er work to charge the car tab.

The total: $43.25.

Eyman agrees.

“We were going after the big ones, the big guys. The fee itself is $30. There are some ancil­lary fees on there,” he said.

The ini­tia­tive elim­i­nates the addi­tion­al fee the state charges based on the weight of a vehi­cle, which can range from $25 to $65. It also bars local gov­ern­ments from tack­ing on car tab fees through trans­porta­tion ben­e­fit dis­tricts.

Eyman said he doesn’t see a prob­lem because the ini­tia­tive will cut car tabs sub­stan­tial­ly by elim­i­nat­ing the weight fees and tar­get­ing Sound Transit’s MVET, which is col­lect­ed in the urban areas of Pierce, King and Sno­homish coun­ties.

“Are vot­ers going to be furi­ous because it’s $43? I don’t think so.”

Only 23.44% of the reg­is­tered vot­ers of Wash­ing­ton State vot­ed for Tim Eyman’s Ini­tia­tive 976. Most vot­ers either vot­ed no or did not express an opin­ion one way or the oth­er. Nev­er­the­less, Repub­li­can law­mak­ers are press­ing for this sub­ma­jor­i­ty’s will to be hon­ored. They want I‑976 imple­ment­ed. But of course, that would mean cut­ting the sales tax on motor vehi­cles along with vehi­cle fees.

How much rev­enue would be lost? Hun­dreds of mil­lions by the end of the 2020s. The sales tax on motor vehi­cles is pro­ject­ed to raise $109.62 mil­lion dur­ing the 2019–2021 bien­ni­um, accord­ing to the state’s Trans­porta­tion Resource Man­u­al.

Trans­porta­tion Resource Man­u­al extract: Retail sales tax on motor vehi­cles

If you’re going to argue that vehi­cle fees have become rev­enue non gra­ta in the wake of I‑976’s pas­sage, then the same goes for the retail sales tax on motor vehi­cles. The peo­ple who vot­ed for “thir­ty dol­lar car tabs” also vot­ed to cut the por­tion of the sales tax on motor vehi­cles that goes to trans­porta­tion.

Sec­tion 7 is as much a part of Ini­tia­tive 976 as any of the mea­sure’s oth­er sec­tions.

And yet Cur­tis King and oth­er Repub­li­cans are out there say­ing we should use rev­enue from the sales tax on motor vehi­cles to fund trans­porta­tion.

To be clear, the rev­enue they want to divert is the por­tion that’s going to the gen­er­al fund, not the por­tion I‑976 is try­ing to repeal. But by their log­ic, the vot­ers just said we don’t want to fund trans­porta­tion projects with sales tax dol­lars.

So, on the one hand, they’re argu­ing that we should abide by the will of the group of vot­ers who backed I‑976, and on the oth­er hand, they are simul­ta­ne­ous­ly argu­ing that we should not abide by the will of that very same group of vot­ers.

It’s good to know they’re not sin­cere when they talk about the will of the vot­ers.

To tru­ly move beyond I‑976, it’s impor­tant that law­mak­ers first rec­og­nize that it was a scam and a con per­pe­trat­ed against the vot­ers of Wash­ing­ton State.

I‑976’s bal­lot title con­tained mul­ti­ple false­hoods (includ­ing the false promise of “thir­ty dol­lar car tabs”, as men­tioned above) and no men­tion or even allu­sion to the destruc­tive con­se­quences of its imple­men­ta­tion.

The result there­fore can­not be regard­ed as a use­ful mea­sure­ment of where peo­ple stand on how trans­porta­tion in this state ought to be fund­ed.

Because the I‑976 bal­lot title is a blaz­ing dump­ster fire, about the only con­clu­sion we can draw from the I‑976 result is that there are a sig­nif­i­cant num­ber of peo­ple who would like vehi­cle fees to be low­ered or assessed in a more equi­table way (or both). We can make this infer­ence in part because it is sup­port­ed by oth­er avail­able data, includ­ing cred­i­ble pub­lic opin­ion research on the sub­ject.

Instead of repeal­ing vehi­cle fees left and right as Eyman pro­posed, the Leg­is­la­ture should restruc­ture them and ensure low income fam­i­lies ben­e­fit in the process.

The Leg­is­la­ture for­tu­nate­ly pos­sess­es the pow­er to respon­si­bly rewrite the tax code. It is prob­a­ble that I‑976 will ulti­mate­ly fail to with­stand con­sti­tu­tion­al scruti­ny in the courts, which is why the Leg­is­la­ture had best start prepar­ing for that sce­nario with a plan that address­es the griev­ances of peo­ple who are frus­trat­ed about vehi­cle fees but also want trans­porta­tion projects fund­ed and built — an out­come that will not be pos­si­ble if I‑976 is imple­ment­ed as Tim Eyman intend­ed.

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One Comment

  1. This is the best idea Cur­tis King can come up with?

    # by Vanana Senko :: January 9th, 2020 at 11:35 AM