Reckoning may come on car tab relief

Reckoning may come on car tab relief
State lawmakers may have to choose between enacting car tab relief for Puget Sound drivers or risking voter approval of Initiative 976 that would create a $30 car tab. Photo:

State lawmakers may find themselves between a rock and a hard place: allowing Washingtonians to decide whether to approve a $30 car tab initiative on the ballot or to provide relief from ST3’s new motor vehicle excise tax (MVET) through legislation that would reduce transportation revenue and possibly satisfy voters. It’s a choice that legislators considered during a Feb. 26 public hearing of the Senate Transportation Committee regarding Initiative 976 and two bills looking to reduce at least some portion of ST3’s MVET.

Sponsored by Tim Eyman, I-976 would limit car tabs to $30, a move that would reduce driver’s annual vehicle fees along with millions of dollars that go to the state Multimodal Transportation Account. The proposal is opposed by the state’s chamber of commerce along with transit groups. At the same time, SB 5075 introduced by Sen. Patty Kuderer (D-48) would reduce the MVET for older vehicles or low-income drivers, while SB 5042 sponsored by Sen. Steve O’Ban (R-28) would swap out Sound Transit’s current vehicle depreciation schedule with car industry standards such as Kelley Bluebook.

Eyman told lawmakers that with the state collecting billions in surplus revenue, “I think the timing on this couldn’t be better.”

Although opposed to the initiative, Washington Roundtable Vice President Neil Strege advised the committee to let the initiative run without introducing an alternative and trust the voters to vote against it. He added that if the state lost the revenue from the car tab, it would “leave you with an impossible choice of what to cut.”

That view is shared Mike Ennis, director of transportation policy for the Association of Washington Business. He told the committee that the initiative would “significantly cut transportation funding to state and local governments. We want to honor the commitments.” He added that transportation investment cuts would also affect economic development opportunities in the state.

Also against the initiative is the Washington State Building and Construction Trades Council and the Washington Transit Authority.

However, O’Ban argued that the initiative garnering enough votes to make the ballot was “entirely predictable. That was because we did nothing.” In the last two years, lawmakers have proposed varying degrees of car tab relief that has failed to clear the legislature. That includes SB 6303 sponsored last year by O’Ban, which was unable to advance from the Senate Transportation Committee after a public hearing. That year he also sponsored SB 5893, which got a unanimous vote from the Senate but got sent back from the House. In the House, HB 2148 would have created a rebate program for low-income households, but couldn’t get out of the  House Transportation Committee.

Rather than approve car tab relief proposals, he said that frustrated voters might now approve an initiative that is “far more substantial in terms of its cut than any proposal made by either party. I would urge this body to finally do something for the taxpayers of the RTA (regional transit authority).”

In opposition was Redmond Mayor John Marchione, also chair of the Sound Transit Board, who argued the cut in tax revenue would affect the transit agency’s ability to deliver projects on time. However, O’Ban and Sen. Phil Fortunato (R-31) argued the agency is now expected to receive $63 billion, rather than the $54 billion originally proposed when voters approved three new taxes via ST3 by 54 percent in 2016. When Sound Transit originally approached the legislature for authorization to put the measure on the ballot as part of the 2015 Connecting Washington package, it was pitched as a $15 billion package.

Washington Policy Center Transportation Director Mariya Frost told lawmakers that SB 5042 “represents good policy,” particularly because it would apply retroactive credit for ST3 MVET already paid since 2017. “It’s clear that Sound Transit can afford this fix.”

No further action is scheduled for the bills and initiative at this time.

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