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;
(c) 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.

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.