Editorial: Costs of I-976 would be too great to bear

By The Herald Editorial Board

Why $30?

At Thursday’s Herald Forum on Initiative 976 at WSU-Everett, the measure’s sponsor, Tim Eyman, was asked why $30 was a reasonable Motor Vehicle Excise Tax to charge for vehicle license tabs. Why $30? Why not $50? Why not zero?

Eyman provided no reasoning how such a tax limit would still provide adequate revenue for state and local transportation needs. Other than a blanket attack on any existing or proposed tax meant to fund transportation, Eyman avoided the question.

So why $30?

Eyman’s fetish for a flat $30 fee is all about marketing. It was the figure with which he launched his first car tab initiative 20 years ago — which passed, was declared unconstitutional but was then codified by the Legislature — and to which he’s returned frequently for a string of petition campaigns, only one of which qualified for the ballot and passed in 2002.

The $30 figure has become the rallying cry that the former Mukilteo watch salesman has employed to support his anti-tax initiative cottage industry.

It’s an advertising slogan. It certainly isn’t about good government, fair taxation or responsible transportation funding. And it’s why The Herald Editorial Board is urging a no vote on I-976.

A luxury car tax break: On its face, I-976 will add to the package of regressive taxes in this state that demand more as a percentage of income from lower- and moderate-income families than from those with higher incomes, in effect a tax break for those who can afford luxury vehicles in the Puget Sound region. A flat $30 license tab fee means that someone driving an $81,000 Tesla would pay as much to renew his or her tabs as someone driving a 10-year-old Chevy. (And the Tesla owner isn’t paying any gas tax, but would pay a new $75 electric vehicle fee that I-976 won’t repeal.)

Currently, vehicle owners are charged a $30 base fee for tabs, but there’s $20 in service fees, a $4.50 filing fee, a weight fee that starts at $25 for the average 4,000-pound car and, — for residents of cities that have adopted a Transportation Benefit District — an additional local fee; for Everett residents, $20, for example.

And for those who live within the Sound Transit taxing district — mostly in urban portions of Snohomish, King and Pierce counties — there’s an additional 1.1 percent fee based on vehicle value that those voters approved in 2016 to fund construction of the Link light rail system, bus rapid transit routes and other projects.

Under I-976, all of that goes away except the $30 base fee. But what vehicle owners would save on the tabs if the initiative passes will come at heftier costs down the road for themselves, their commutes and the economy at the city, county and state level.

What it threatens: If adopted, I-976 would drain an estimated $475 million from the state’s transportation and transit accounts in the next two-year budget that funds: maintenance and improvement of county roads and bridges; a portion of of the State Patrol’s traffic enforcement and investigation work; multi-modal services including public transit, rail, and bike and pedestrian projects; and sap a major source of funding for highway construction, maintenance and ferry services.

Money from a budget surplus and reserves could be diverted for work deemed most pressing, but it would force a scramble for next year’s legislative session that will consume time better invested in other issues and it could ultimately delay the projects that the state’s and this county’s residents have demanded to address congestion along interstates and local highways, including the U.S. 2 trestle.

For those cities with Transportation Benefit Districts, the combined statewide loss of funding for basic road repair and preservation work would total more than $58 million. In our county, Everett, Edmonds, Lynnwood and Granite Falls would lose funding that each relies upon for that work.

For Granite Falls, it will lose $77,000 in road maintenance funding it won’t easily replace.

Everett would be out $1.5 million that — as it faces other cuts to balance its budget — it can’t replace without cuts elsewhere. Mayor Cassie Franklin, during Thursday’s forum, made clear that the loss would mean road conditions will degrade; delayed road repairs will cost even more and drivers will see more frequent damage to their vehicles from potholes.

For Sound Transit and the planned extension for the Link light-rail system — in particular to Paine Field’s aerospace manufacturing complex and to downtown Everett — it will push out its arrival even further beyond its expected service start in 2036. If it doesn’t shut down that extension completely.

A broken Link: Eyman has focused much of his attack on what he claims is a “dishonest tax” that some 700,000 voters in the three-county district approved in 2016, specifically on the valuation schedule that was adopted and the 0.8 percent valuation tax increase to 1.1 percent. A reminder: Those residents outside of the Sound Transit district are not paying this tax.

Still, there was some sticker shock among those who do live in the district when the new fee was added to vehicle tabs.

But it’s dishonest of Eyman and others to suggest that either the tax or the valuation schedule were adopted without the knowledge and approval of the Legislature or voters.

When the Legislature authorized Sound Transit to take the tax package to voters it approved an older schedule that admittedly allowed a slower rate of depreciation than the one then in use by the state. Yet, when the Senate was controlled by Republicans, it made no move to replace the schedule, rejecting at least one amendment that would have made that swap.

At the same time, Sound Transit and media reporting made efforts to show voters what the tax package would mean for their license tabs, encouraging use of online calculators that showed what taxpayers could expect to pay.

We’ve made the point before that voters don’t take lightly ballot measures that affect their taxes. Eyman has made his living off that tax-wary sentiment. Yet, Sound Transit’s ST3 tax package passed with 51 percent support in Snohomish County and 54 percent district-wide.

Savings, at what cost? State residents pay a number of taxes to pay for roads, transit and other modes of transportation, including the gas tax, license tabs and vehicle sales tax; and that’s by design to spread out the sources and ensure a level of equity in who pays.

The Sound Transit portion of vehicle tabs, for example, is paid by those who are going to benefit most — whether they use light rail or not — from the projects it funds.

Yes, approval of I-976 would save most vehicle owners some money each year when they renew their tabs. But that savings would quickly be eaten up by the cost of longer commutes, greater wear and tear from bad roads, lost jobs from delayed or canceled construction projects and lost economic opportunities from businesses unwilling to expose employees or their goods and services to more congestion.

I-976 is not worth it. Vote no.