Just Read It: The 18th Amendment

by ALEX BRONER

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After reading Martin’s excellent analysis (and follow-up) on why the restrictions on the use of Gas Tax money don’t really matter, I thought it was worth bringing up another salient fact. Often in discussions regarding the gas tax, people bring up the 18th Amendment to the Washington State Constitution. People summarize this amendment as stating that gas tax money can only be used for “highway purposes” and leave it at that. While the words “highway purposes” are indeed used by the amendment, it’s interesting to look at how it defines highway purposes. Below I quote the 18th amendment as found here.

SECTION 40 HIGHWAY FUNDS. All fees collected by the State of Washington as license fees for motor vehicles and all excise taxes collected by the State of Washington on the sale, distribution or use of motor vehicle fuel and all other state revenue intended to be used for highway purposes, shall be paid into the state treasury and placed in a special fund to be used exclusively for highway purposes. Such highway purposes shall be construed to include the following:
(a) The necessary operating, engineering and legal expenses connected with the administration of public highways, county roads and city streets;
(b) The construction, reconstruction, maintenance, repair, and betterment of public highways, county roads, bridges and city streets [emphasis added]; including the cost and expense of (1) acquisition of rights-of-way, (2) installing, maintaining and operating traffic signs and signal lights, (3) policing by the state of public highways, (4) operation of movable span bridges, (5) operation of ferries which are a part of any public highway, county road, or city street;

I’m not a lawyer, but the provision seems pretty clear to me that “highway purposes” includes city and county streets, aka local streets. While some gas tax money currently goes towards street maintenance, substantial funding for local maintenance is funded by property tax and other taxes and fees. Directing more gas tax towards road repair could free up these other funding sources for other purposes, including transit. How much money could we free up?

Below are some rough calculations based on the Seattle Department of Transportation 2009-2012 budget numbers.  For simplicity, I’ve omitted spending on major projects such as the Mercer rebuild. I’ve only included those budget categories for which it is unambiguous that 18th Amendment funds could count:

Expenses 2009-2012: ($m)
Bridges & Structures Major Maintenance

111.10

Bridges & Structures Operations

29.76

Roads: Major Maintenance

95.53

Street Repair

114.52

Traffic Signals

34.12

Total

385.04

How much money does the city of Seattle currently get in gas tax money and other state grants?

Revenue 2009-2012 ($m)
Motor Vehicle Fuel Tax – City Street

53.94

State Grants

47.74

Total

101.68

We subtract the two totals and we see that between 2009 and 2012 at least $283m in expenditures were eligible for gas tax money had this money been available. That’s at least $283m that could have been spent on other things. Extended over 10 years that’s over $707m. What can you get for $707m?

The 2007 bicycle master plan (which is currently in the process of being updated) estimated the cost of the plan at $240 million over 10 years, or $259 million in 2011 dollars. The Pedestrian Master plan Tier 1 projects cost $882m  in 2011 dollars. The Seattle Transit Master Plan is estimated to cost $1,009m in capital costs plus another $27.8m a year for a total of $1,287m over 10 years. The Seattle Subway will probably cost many billions as it is a long term investment to connect up our neighborhoods with fast and reliable mass transit.

How does $707 million compare to other funding measures? The $60 Vehicle License Fee proposed as part of the (rejected) Proposition 1 in Seattle would have raised $204 million. The North King County Portion of the Sound Transit 2 funding package consisted of $3,569m in projects/services over 2009-2023 or $2,549m over 10 years (including inflation).

Clearly funding gas tax eligible expenses with gas tax money isn’t a magical slush fund that will give us all the money we need for effective and sustainable transportation, but it’s a good start. From a public transit perspective, one of the other benefits of raising the gas tax is that higher gas prices for motor vehicle drivers means more transit usage. If some of that $707m is used on improving existing bus service with off vehicle fare payment, signal priority, and dedicated right of way, then more riders will raise revenue without slowing down service. If some of that money is also used to accelerate planning, design, and environmental review then we can build out our city and regional high capacity transit systems fast enough to deal with the looming challenges of global warmingpeak oil, and demographic transition. So next time you hear the “conventional wisdom” that gas tax money can’t be used towards transit, go ahead and point out what the 18th Amendment actually says and all the benefits we could have from liberating on 18th Amendment funds.




Comments

  1. What current spending using gas tax money do you propose to forego in order to shift it to street maintenance and then shift that money to transit?

    It’s not like there’s any surplus funds floating around in that funding stream…

    • Bruce Nourish says:

      I think it’s most relevant to possible future gas tax increases, including a possible local option. Any new gas tax revenue can be used for “road work” (much of which would be useful to all road users, not just drivers), freeing up unencumbered money to be used solely for transit.

    • The Alaskan Way Tunnel, the Columbia River Crossing, the new Spokane expressway…. this is easy!

    • BlogReader says:

      I’m not trying to say I know what Alex is thinking, but I believe in the context of the cited posts, he’s implying that if WA state was (or local jurisdictions were) able to raise the gas tax to cover all $128.35m (annual average)gas tax eligible local expenses, local funds could be freed to cover, for example, the bike master plan. I agree that “Directing more gas tax…” is a confusing way to put it.

  2. You’re definitely right, it’s pretty clear that the amendment is about roads, not highways or cars or something more restrictive. I’d love to see more of that money shifted to bike and pedestrian infrastructure, especially now that Chicago is explicitly out to best Seattle in that regard.

    • Actually, I noticed something else. It’s roads *and bridges*. The bridges don’t have to be for roads. They can be railway bridges or whatever.

      So much for the 18th amendment arguments about the I-90 crossing for Link Light Rail. The gas tax can also be spent on Link across 520, BNSF across the Ship Canal, etc.

  3. It’s up to the legislature. If you think grants from the MVF to cities should be higher talk to Chopp, Ed Murray, and Tracy Eide. They can make it happen.

    IMO, there’s a better way to skin the cat . . ..

    It’s clear transit needs more funding, and frankly the revenue mix up to this point has been on the “regressive” end of the spectrum.

    What we need is now is what TriMet has been relying on: a payroll tax. The big employers around here are making record profits. A reasonable, modest charge of $20/month per employee — a fee employers can deduct — would round out the funding tools available to transit agencies.

  4. It’s my understanding that transit agencies can get exemptions from paying the gas tax. I’d like to see these exemptions taken away, so that they pay more of their fare share. I’d also like to see transit buses have to pay the 520 toll. And finally, I think bicycles should be licensed and riders should have to buy bike tabs, to help pay their fare share for the roads.

    • You’re essentially proposing that the government should tax itself. To what end? If transit agencies had to pay the gas tax, they would have three basic options:
      1) Get more funding from tax revenue,
      2) Raise fares, and/or
      3) Cut service.

      Option 1 makes no sense because the transit agency would be paying this tax only to receive some or all of the proceeds right back again. Options 2 and 3 would reduce transit ridership, which would put more cars on the road, which would increase the need for more highway construction. I would be willing to bet that the state would gain less money from taxing transit than it would lose from building more highway lanes.

      • So you are arguing that no government agencies, from the smallest town to the largest federal agency, should ever have to pay a gas tax, payroll tax, sales tax, etc.?

      • Gregoire’s proposed wholesale fuel tax would presumably tax all liquid fuel users (indirectly).

      • Sam, you’re attacking a straw man. I never said there’s no possible situation where it makes sense for a government agency to pay any taxes.

        I did say that in this particular situation, making transit agencies pay fuel tax would probably end up being a lose-lose-lose situation. Assuming the money doesn’t get diverted right back into the transit budget, transit service would be worse, traffic would be worse, and the state transportation budget would likely be worse off for needing to build enough new highway lanes to try and cope with the extra traffic.

      • I think government does tax itself. I believe that transportation capital projects pay sales tax – effectively shifting tax dollars from the dedicated highway fund to the general fund.

        If that’s true, maybe that’s a place to start focusing funds back to their core purposes.

      • Large capital projects are almost always awarded to private contractors. They pay sales tax on materials which is of course passed on in the bid price to the government. However, on many large projects like SR-520 the sales tax is suspended in order to secure a lower bid. And yes, what that essentially does is transfer money from the general fund to the highway fund.

      • Lack Thereof says:

        I’m not sure it’s the case for absolutely every department and every subcontractor, but I can tell you what I know from my place of employment. Several City of Seattle departments (and a few County ones) have accounts with us, and every one of them is tax-exempt.

        Taxing government agencies makes absolutely no sense at all. You raise no additional revenue from it, and unnecessarily waste administrative time and resources collecting and accounting for the taxes you collect.

    • In other words, you want to sneakily divert transit money to roads through the back door (either the gas tax or the 520 toll). If you want transit money moved to roads, just advocate for that in the budget, rather than trying to get there through smoke and mirrors. But be aware that such a position has repeatedly proven a political loser around here.

    • In other words, Sam believes transit is purely a personal consumption like a latte or an iPod, with absolutely no benefit to the public.

  5. “In other words, you want to sneakily divert transit money to roads through the back door (either the gas tax or the 520 toll).”

    Yes, heaven forbid that transit users pay anything at all towards the roads and bridges they use. When a bus uses the 520 bridge, why should the riders on that bus have to pay a toll? They are not getting any benefit from using that bridge? Right? lol

    • Lack Thereof says:

      WSDOT should pay Metro/Sound Transit a reverse-toll, for the service of increasing capacity on that bridge. Every bus that rolls across is freeing up many slots for additional cars.

      • So, buses can pay the same toll as trucks, which, if the buses are full, comes to pennies per passenger. Or, buses can just go around the lake, if they think the bridge is no benefit to them.

        Bus riders benefit greatly from all the roads they use. They should help pay for the roads they use just like motorists do.

    • Stormin’ Norman and his right wing emesis.

      Gotta’ love it.

  6. “We subtract the two totals and we see that between 2009 and 2012 at least $283m in expenditures were eligible for gas tax money had this money been available”

    The ciy of Seattle collects around $90 million per year in parking fees, parking taxes and parking fines. Over 4 years that comes to $360 million from motorists for Seattle to spend on streets and bridges.

    Then there is the MVET, which totals about $80 million per year in most of 3 counties combined, or about $320 million over 4 years.

    Motorists are already paying enough taxes, fees and fines to pay for Seattle’s streets and bridges.

    However, transit users’ fares are paying only a small fraction of the cost of their transit trips and nothing towards the roads and bridges they use.

    Is there any reason why transit fares can not be increased to fund transit? [ot]

    • Is there any reason why transit fares can not be increased to fund transit?

      No, other than that it would be a dumb thing to do.

      Norman, one of these days I hope you will realize that it is physically impossible for everyone in a city the size of Seattle to drive a private car, unless you would rather your city look like Houston. If you raise transit fares to 100% farebox recovery levels, they will be prohibitive on most service (with the exception of a few extremely dense center-city routes, if run only during the day M-F, and extremely high-ridership park-and-ride routes). We need transit to make the city (and its road network) work. So… gasp… we subsidize it to some extent.

      I’ve never seen you express similar horror over the subsidies we provide for a million other things needed for a city to function. Why are transit subsidies so uniquely terrible?

      • Transit subsidies are middle-class entitlements. People who use transit in our area can afford to pay their own way. They don’t need subsidies. I oppose people making $60,000 per year getting subsidized transportation.

        And many transit trips are unnecessary. If fares reflected the actual cost of the trips, there would be a lot fewer trips taken, which means less energy used, which is a good thing.

        There are many people who don’t “need” to go downtown to work. They could easily work from home. But, if you subsidize their trips, then they will physically commute because it costs them next to nothing to do so. Transit subsidies encourage people to take trips they don’t need to take.

      • Many, many other things government does benefit middle-class people. Taking away everything that could benefit someone in the middle class would a) make it impossible to be middle-class, and b) make us completely uncompetitive with many other places in terms of quality of life.

      • Practically everything the government does subsidizes middle-class people. (Though that’s been changing — in the last few decades, the government has preferred to subsidize billionaire CEOs and to hell with everyone else. But anyway.)

        Norman, you write this: “I oppose people making $60,000 per year getting subsidized transportation.”

        So, you oppose any general fund or property tax money going to road paving, which is there to benefit people making $60,000 a year who own cars. Poor people have lived with dirt roads for centuries, they can handle it — middle class people with cars are the ones who want the paved roads.

        Yeah, I didn’t think so, Norman.

      • Oh — I gotta be clearer about this.

        It is quite possible that car-specific taxes *in Seattle* would pay for car-specific infrastructure *in Seattle* — it’s the rural roads which end up being massively subsidized.

    • Full cost recovery for transit is only fair if there is also full cost recovery for car use. Otherwise people will choose the subsidized alternative.

      Full cost recovery could be done with congestion tolling all arterials via GPS, with a pay-per-mile fee (VMT tax), or even with a much, much higher gas tax. As it stands now, federal deficit spending and local property taxes are needed to perform road maintenance, and the vast majority of needed road maintenance is left undone due to lack of funding. Seattle DOT alone claims a road maintenance backlog of in the billions.

      • Motorists pay the full cost of their transportation: full cost of their cars; full cost of the gas; full cost of the maintenance; full cost of repairs; etc. etc.

        Transit riders in our area pay about 1/4 of the OPERATING costs of their transit trips.

        So, that is Motorists: 100% of the operating costs of their trips.
        Transit riders: about 25% of the operatinc costs of their trips.

        And motorists pay a multitude of taxes and fees on their trips which go to pay for roads, which transit riders do not pay.

        Is that clear enough?

  7. And don’t forget the $20 car tabs for the City of Seattle. How much revenue does that generate each year?

    Then there are the $20 car tabs for Metro. How much revenue does that generate for King County each year?

    • Lack Thereof says:

      How much of my sales tax and property tax money is spent on Seattle’s and King County’s roads?

      Why does bicycle infrastructure get only 1% of the funding when they make up 3% of the users?

      • There is enough sales tax collected on new and used vehicles, that, along with all the gas taxes, parking revenues, MVET’s, license fees, taxes on tires, parts, maintenance, et. al., that no revenues except those genereated by motor vehciles need to be used on roads at all, at any level.

        Bicycles don’t make up anything close to 1% of passenger-miles traveled in our area. It is a fraction of 1%. And that is in the good weather! In bad weather it is close to nothing.

        However, bicyclists are free to pay for whatever they want to build. How much of the revenenue spent on roads comes from bicycles? How much revenue does Seattle or King County get from license fees on bicycles? Or parking fees from bicycles? Or gas taxes from bicycles?

      • Passenger-miles are only an effective measurement of transportation system performance if you think sprawl is the desired land use pattern.

        But I think you do. And it really makes me wonder why you live here rather than in Los Angeles, Houston, or Atlanta.

      • Norman, first of all:
        (1) You’re simply wrong, numerically.

        (2) Sales tax is a general tax which pays for everything. Why do you propose exempting cars from ordinary sales tax and devoting that sales tax just to roads? Perhaps we could devote sales tax from food to agriculture, sales tax from medicine to hospitals, sales tax from iPads to the computer industry? This makes no sense whatsoever.

      • “There is enough sales tax collected on new and used vehicles, that, along with all the gas taxes, parking revenues, MVET’s, license fees, taxes on tires, parts, maintenance, et. al., that no revenues except those genereated by motor vehciles need to be used on roads at all, at any level.”

        Then why are we worrying about cost overruns on the Deeply Boring Tunnel? The gas tax has enough money to cover it. Norman said so.

      • “Sales tax is a general tax which pays for everything”

        But sales tax is not collected on everything: There is no sales tax on transit fares. Or doctor bills. Or prescription drugs. Or food that is not prepared. Or many other things. But there is sales tax on new and used cars, and everything else motorists buy for their cars, including maintenance and repairs.

        There is no sales tax on transit fares.

        There is no tax on the diesel transit agencies use.

        There are no license fees on transit vehicles.

        There is no MVET on transit vehicles.

        Transit buses do not have to pay to park on public streets.

        So, motorists pay hundreds of millions of dollars per year in sales taxes on their transportation, while transit riders pay NO sales taxes on their transit trips.

        Do you understand this distinction?

      • “Passenger-miles are only an effective measurement of transportation system performance if you think sprawl is the desired land use pattern.”

        Ludicrous. Many transit agencies use passenger miles as a key performance statistic.

        To divy out transpo dollars based on number of trips, then how much money should be spent on sidewalks, assuming that virtually every trip by car or transit also includes a “trip” on foot to and from the car or transit vehicle.

        I drove my car to a doctor’s appointment 10 miles from my home today, then walked 1 block from my car to the doctor’s office door. Does that 1-block “trip” by foot equal my 10-mile trip by car?

  8. Why are property taxes so loathed in Washington?

    To me it is clear that the amendment was describing only those major streets that are arterial and thus should be funded from a general fund. But property taxes should serve the “last mile” or last 500 ft) as they are taken from and then used by the property owner.

    • Alex Broner says:

      Hi STBPolice, thanks for your message. You state that to you it is “clear” that the amendment only refers to major arterial streets.

      I just gave the amendment language another read and it is not clear to me. It seems to me that if the framers of the 18th amendment had wanted to restrict gas tax money thusly they would have used language along the lines of “this money can only be used on major streets” but they did not. Indeed they do use the phrases: “public highways, county roads, bridges and city streets” showing awareness of different types of facilities but only insofar as to INCLUDE them, not exclude them. Then again, perhaps I missed something. If you still think the exclusion of arterial streets is implied then please reply to this post with an explanation of how you reached this conclusion.

      thanks and happy holidays!

      -Alex Broner

    • Because homeowhers see the big tax bill each year and think about how it could have covered a vacation in Europe or a class at the university or an IRA contribution, and they imagine it will be wasted on nothing they care about, and they get angry. Sales tax bothers people less because it’s a little bit at a time. And because there’s no income tax, the other taxes are higher than they would otherwise be, and more than people from other states are used to.

  9. Thanks for your piece, Alex.

    To clarify, for some of the commenters:

    RCW 46.04.197
    Highway.
    Highway means the entire width between the boundary lines of every way publicly maintained when any part thereof is open to the use of the public for purposes of vehicular travel.

    RCW 47.04.010
    Definitions.
    (11) “Highway.” Every way, lane, road, street, boulevard, and every way or place in the state of Washington open as a matter of right to public vehicular travel both inside and outside the limits of incorporated cities and towns;

    I like both of these a lot.

Trackbacks

  1. [...] Just Read It: The 18th Amendment – Seattle Transit Blog – “Highway purposes” is clearly defined as including city streets. Let’s change the way the state uses gas taxes. [...]

  2. [...] tax proposal (and all accompanying opinions) aside, the asks are fairly significant.  Doubling the councilmanic VLF authority to $40 [...]

  3. [...] that steep gas tax increases must be spent on environmentally problematic highways. Alex Broner found $70m per year in Seattle alone; I found $165m per year statewide in Federal money that could be shifted to [...]

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