No details as of yet, but who needs the details:
WA Supreme Court strikes down Tim Eyman’s I-976 to cut car tabs. Story soon at https://t.co/DnQLxkhcnI.
— Heidi Groover (@heidigroover) October 15, 2020
The immediate practical importance is that various transit and transportation agencies will not have to refund the money they have been collecting since I-976 passed, easing pressure on budgets statewide.
All justices but Barbara Madsen, who found only one reason to reject it instead of two, signed the ruling. Story here ($).
thank god. Earlier this morning I was thinking, If I had known last year what 2020 would bring, I wouldn’t have been so optimistic about this case.
Yes!
What great news!
Thank G*d the voters of Seattle gave a mandate to get after 976 and keep local control!
Excellent news, and good timing considering that I’ll be voting for Supreme Court judges in less than a week.
That said, the fact that an initiative has to be voted on and passed before it’s constitutionality can be litigated feels very broken to me. If an initiative is unconstitutional, people should be able to sue and get it tossed out before it even appears on the ballot.
In a more practical note, if Seattle has been saving the car tab money pending the court ruling, can it be used in March to restore some of the cut bus service?
Since the STBD money hasn’t been spent I assume it will be released for bus service soon, and Metro can reverse some of the cuts. It’s just after a service change and Metro would have to rehire drivers, but it does keep some hours in reserve to address spot needs, so it could at least activate those hours.
The state Supreme Court has addressed this in the past. The power of initiative is written into the Constitution such that the people are on the same footing as the legislature. Because no one can sue to stop the legislature from debating a bill they “think” is unconstitutional, similarly the bar for stopping an initiative pre-vote is very high.
This is for two reasons: 1) People should be able to debate them and the voters can vote down an initiative if they think it will be unconstitutional and the opponents of an initiative can use that in the political process; and 2) a law is not unconstitutional until it is actually in force or about to come in force. A “theoretical law” is not a law and thus cannot be unconstitutional, thus courts cannot rule on it.
For what it’s worth, Eyman knew this would be unconstitutional; his lawyers told him as much. He doesn’t care, because if the initiative sticks it means he can’t be paid money to run it again and again.
Yep, spot on.
At some point, you’d think Eyman’s supporters would realize the grift. But I wouldn’t bet on it.
Scottie, these idiots have only one guiding principle: “I support anything that pisses off liberals.” They’re not too stupid; they know that Tim Eyman is a fraud and a joke. But they also know that he pisses off liberals, and for them, there could be no greater endeavor. They will fork over cash until their dying breaths just to hurt a liberal’s feelings. You can project this mentality to a national scale, too.
Eymanism has merged with Trumpism and Tsimermanism. Eymanites were just anti-tax activists and stayed away from some conservative issues popular in other states, but now Eyman and Tsimerman have jumped on the Trump bandwagon and all the other social and gun-nut and authoritarian and voter-suppression issues in the conservative coalition.
Some people doubtless contribute to Eyman’s campaigns solely because of car tabs or low taxes or to gut Sound Transit, but increasingly he and his core supporters have been drifting into these other issues and arguing it’s part of the same movement.
When you believe that government is bad, and you want to destroy it, it doesn’t matter if the initiative actually becomes law. Even something that gums up the works for a while can be worth it.
Eyman’s people actually argued in the case that the public officials bringing the action were violating the ban on public officials using public resources for political purposes by simply bringing the action. The court disposed of it neatly (full disclosure: I consider Justice Gonzalez, the author, a friend) by saying once it became a statute, it was no longer a political issue. Duh.
Even if you can get a ruling on a theoretical law, it depends entirely on which judges are selected to review it and what their mood is on that day. A different set of judges on a different day may rule the opposite. So just because some judge rules it constitutional or unconstitutional before the vote, that doesn’t mean another judge won’t rule the opposite after the vote. Blocking a vote on something that another judge might rule constitutional if it passes and is challenged, is arguably an affront to democracy because it short-circuits the public’s right to vote on something that would be upheld after the fact.
And justices can be replaced in the same election the initiative is passed.
Such truly fantastic news. Perhaps the legislature can pass a new bill this session, one that would prevent statewide votes from nullifying local, voter-approved voluntary taxation.
For example: If, for whatever reason, Stevens County passed its own local taxing district and someone in King County decided they didn’t like it and wrote a statewide initiative to overturn it, should Washington State voters be able to overrule the locally-driven Stevens County decision? That’s what happened with I-976, but in reverse.
The voters of the entire state should not have veto power over locally-driven tax initiatives, period, and we should enshrine that rule into hard-and-fast law so that we don’t have to deal with this again (as we inevitably will, this is Tim Eyman we’re talking about).
Good riddance to a garbage law.
I’ve always thought about this very thing. It seems like it should be unconstitutional for voters in one city, district, county, etc to overturn voter approved legislation in another city, district, county, etc that doesn’t apply or affect voters in the first district, especially when it’s financial and not social related. It could also be a Constitutionally grey area that hasn’t been tested in courts yet. I’m not an expert on the Washington State Constitution.
But in the end, a state initiative on car tabs should only be able to repeal tab fees that are statewide. Tim Eyman would have to find a new job, but that’s a risk I’m willing to take.
What you say makes complete sense. The 53% of people who voted against the tabs pay about $35 to $40 more per year than the $30 Eyman thinks is “reasonable”. But of course he thought $30 was reasonable in 1998 and in the intervening years cumulative inflation has been on the order of 50% so doubling the $30 would put the tab fees at $45 or so in “constant dollars” so they really have hardly risen.
The cars they adorn have gone through the roof in that time. Nearly any new car bought today — even a Sentra or Civic — will be more than $30,000 delivered. In 1998 one could buy one of those models for under $10,000.
The whole point of this “Sagebrush Rebellion” is just to “stick it to teh Libs” in Puget Sound. Secretary Clinton was right: they truly are
“deplorable”.
Courts require “standing” to bring a lawsuit. Standing generally means some kind of harm. If the tax is statewide any citizen in any city will have standing if the tax applies to them. However if the tax is strictly local then yes, an out of city resident probably would not have standing unless they worked in the city or visited, or owned property that was subject to the tax, or was affected by the tax.
In answer to another post, the reason the state does not give more taxing authority to cities is because those cities would use that taxing authority, especially property and sales taxes, which would exhaust the tax “capacity” the state wants to exhaust first, like McCleary exhausted property tax capacity for many if not most cities. The state adopted the 1% cap on property tax levies after it was struck down by the state supreme court because cities were raising the levies up to 6%/year, which was exhausting the property tax capacity the state wants to tap, especially in high value cities like Seattle.
The last thing the state legislature wants is for cities to go to the head of the line when it comes to taxing capacity and authority, although the larger the area a tax encompasses in this state the greater the chance a referendum repealing it will pass.
Daniel, the State needs to give the cities the right to adopt OTHER forms of taxation if it is worried about not having enough property tax capacity.
We get it that people in Ferry County don’t want to ride the bus. That’s perhaps their loss, but they don’t think so, so fine: no bus in Ferry County.
But it is NONE of their effyouseeking business if people in King County want to reduce traffic congestion and parking jams by taxing themselves to pay for having buses. Period, end of story.
BUTT OUT, Hayseeds! [I understand you are not a hayseed. That was an apostrophe.]
Courts require “standing” to bring a lawsuit. Standing generally means some kind of harm.
That seemed to be the crux of Burien’s lawsuit against I-976, which was ruled that it had merit and could continue. I haven’t seen any decisions on it, possibly because the ramifications of ruling on it would have been far reaching and the courts were likely waiting for the main case against I-976 to play out.
Instead, I-976 was ruled unconstitutional for other reasons and Burien’s lawsuit will probably be thrown out as no longer relevant. The Washington Supreme Court justices can breathe a sigh of relief that they don’t have to rule on Burien’s case.
The state needs to join the 19th century and adopt an income tax like every other jurisdiction in the civilized world.
“The voters of the entire state should not have veto power over locally-driven tax initiatives,”
I agree. Unfortunately, I think that’s an issue of vagueness in the state constitution, and might not be fixable through an ordinary law.
Perfect! Then it sounds like we can pass the “Local Control of Taxes” constitutional amendment. You can even make it sound like the old “small government, local control” b.s. that old-timey “conservatives” claim to support. Ballot language: “The legislature proposes an amendment to the state constitution that would prevent statewide votes from overturning local additional taxation efforts passed by counties, cities or other regional taxation districts, as provided for by state law.”
We have got to be proactive with this stuff because Tim is going to file this exact same initiative every 3-5 years for the rest of his life on this planet Earth and it will waste enormous amounts of resources and screw up planning for our local transit agencies. Enough is enough, get proactive with this law.
If you want this constitutional amendment to pass in Eastern Washington, also thrown in a clause that funding is to be kept within the counties that generate it. There’s a lot of people over there that believe that the entire state subsidizes King County, rather than the reverse, and would support this in a heartbeat.
While you’re at it, allow local income tax in that amendment. Why not?
Wow. What timing. There’s been so much bad news with transit cutbacks and coronavirus and the federal political situation that this is a welcome respite.
I think a state/local income tax and carbon tax could pass IF they are revenue neutral. For example, CO has a state constitutional amendment that limits total tax revenue to a percentage of state GDP.
The problem is every proponent of a state or local income tax argues its need is to raise more revenue. “Equity” is only half the equation. So it is a tax increase, and predictably fails.
That was the issue with I-1631. Everyone knows or should know a carbon tax is the best and most neutral way to factor in the cost of carbon in energy. Many supporters of a carbon tax said make it neutral, and use the revenue to offset the punishing property tax increases under McCleary, which was a hot topic. Tax carbon, not property. Instead 1631 had huge exemptions for the biggest polluters (and political donors) and created a $15 billion slush fund that would be distributed by a hand picked and appointed “environmental board”.
That just told most citizens the proponents of 1631 weren’t really in it for climate change, they were in it for the tax revenue, so the best way to address climate change — a carbon tax — failed at the ballot, and the sponsors of 1631 set back any carbon tax in this state by years, but still claim they are climate change advocates despite the harm they caused.
My memory of carbon politics is less clear than for transit, but weren’t there two carbon initiatives and they both failed? I recall a carbon-neutral one that said it would get moderate conservatives’ support across the state but then it didn’t. Then there was a revenue-positive one that got more support but it also failed.
The revenue-positive carbon tax limited the use of the revenue to things that would help in the conversion to carbon-free technologies and to mitigate the impact of the tax on poor people. If we’re not going to use a carbon tax to fund the switch to electric buses and fleet vehicles and vastly increase transit and put solar panels on buildings and all the other things we need to do, how are we going to fund them?
I-732 was revenue neutral (some argued revenue-negative) and failed at the polls, attracting zero support from active Republican politicians.
The problem is every proponent of a state or local income tax argues its need is to raise more revenue.
Wrong. Every organized attempt at creating a state income tax has been revenue neutral (including the case you yourself cited down below). The idea is that you lower the other taxes while introducing an income tax.
The problem is, anti-tax zealots don’t look at the details. They are opposed to taxes of any sort, and feel that if you add in a new way to tax, it will automatically raise taxes on them. Look how many people support reducing the federal income tax on the highest incomes, even though they themselves don’t pay any income tax. It is a cultural thing. Government spending is for hippies — tax cuts are for real Americans.
Mike, Yes there were. As Martin notes, I-732 revenue neutral, and it failed about 57-43. Proponents said, “It failed because not enough Democrats voted for it.” So two (?) years later I-1631 was tried with lots of sweeteners for Democratic causes. Not as many as Daniel says, but plenty.
It also failed about 55-45.
Lots of people want climate change ended but don’t want to do anything that inconveniences or burdens them more than a “wee bit” to bring that about.
This honestly surprises me. I could have imagined striking down portions of the initiative, but for 8 of 9 justices to strike the entire thing based on a “reasonable” misinterpretation of the title seems dubious.
It was more or less what I expected. The thing was really poorly written. I remember thinking that, when I read the full description. For a guy who has done this over and over, Eyman is really not good at writing initiatives. Of course one theory is that he doesn’t care. It isn’t about changing the law, it is about the campaigning, and the big victory party afterwards.
It isn’t about changing the law, it is about the campaigning, and the big victory party afterwards.
Eyman made almost $300,000 in 2019. Any other reason for doing what he does is for the news cameras.
This was the only initiative I ever felt unsure about what it would do. The summary said voters could reinstate car-tab taxes, but Eyman said in interviews his view was they couldn’t reinstate it for transit because it also revoked the underlying authority to ever spend car-tab money on transit. That left me wondering what voters could vote to spend it on. Apparently only non-transit purposes if anything. But other news sources agreed with my view, that even if I-976 repealed transit-related car-tab taxes, voters could put them right back on. So it was all “He said, she said”, and no certainty on which view the courts would confirm. I voted no in any case, but I felt like, if Eyman’s view was right then the ballot title and summary were so misleading they shouldn’t have been allowed. I’m glad the supreme court recognized this.
The decision basically characterized Eyman’s argument as that the legislature or the people had the theoretical ability to repeal part of the law, so therefore the title was accurate. The court said “no, we interpret this law as it is, not as it might theoretically be amended in the future.”
The court struck it down because it has multiple subjects and the ballot summary was misleading. Two Seattle Times articles confirmed that. I don’t know what you’re talking about regarding repealing parts of it. Of course the legislature can amend any initiative after two years, or any other law. There’s no reason to say that in the initiative itself. And I can’t see a reasonable person interpreting “except voter-approved changes” that way.
https://en.wikipedia.org/wiki/Washington_Initiative_732
There were also some big environmental groups who did not support I-732, including “Communities of Color For Climate Justice” and the Sierra Club. Some thought the 1% sales tax reduction and reducing the B&O tax on manufacturers to 0.001%, and a 25% state match to 460,000 Washington families in addition to the earned income credit, would create a huge budget hole. Labor was fiercely opposed. The same group that put I-732 on the ballot placed I-1631 on the ballot. I-732 failed by 59.3% to 40.7%.
P.S. State Republican Senators Steve Litzow and Joe Fain publicly supported I-732.
1. “Wrong. Every organized attempt at creating a state income tax has been revenue neutral (including the case you yourself cited down below). The idea is that you lower the other taxes while introducing an income tax.”
I don’t remember any proposed state (or city) income tax stating let alone promising total taxes would not rise, and the income tax would be wholly offset by cuts to other taxes. They might have promised more progressivity, but not less taxes overall. Which proposed state income tax are you referring to? Did Seattle promise to fully offset its capital gains tax and income tax proposals with cuts to other taxes?
The tax I cited to (I-732) was a carbon tax, not an income tax. It had zero progressivity, and it was liberals and Democrats who opposed the reduction in total tax revenue under I-732, and labor (those crazy anti-tax zealots) was the biggest opponent
If amending the state constitution to allow a progressive income tax was accompanied by a constitutional amendment to limit total state taxes, as you claim — as in CO — to the same percentage of GDP as in 2018 I think it could possibly pass. Of course the main benefit of the property tax levy is it does not decline rapidly during a recession when government spending is most acute, like an income tax does.
But the citizens of Washington have made it clear they won’t take the legislature’s word on it. They will want an enforceable constitutional amendment that sets a cap on total state taxes compared to GDP before giving the legislature the power of an income tax, which is something the Democrats will never agree to because the main point of an income tax is more revenue, then greater progressivity.
2. “The problem is, anti-tax zealots don’t look at the details. They are opposed to taxes of any sort, and feel that if you add in a new way to tax, it will automatically raise taxes on them. Look how many people support reducing the federal income tax on the highest incomes, even though they themselves don’t pay any income tax. It is a cultural thing. Government spending is for hippies — tax cuts are for real Americans.”
How do you know this? What anti-tax zealots are you referring to? Most people I know who fill out their income tax return take all the exemptions and credits they are legally entitled to, and try to minimize the tax they legally owe.
Are they anti-tax zealots. 47% of Americans pay no income tax. What makes you certain they supported Trump’s tax reform? Usually people don’t have an objection to others paying more, just themselves.
True, the Trump tax cuts provided greater relief to higher incomes, but that is because they pay more in income taxes, so any reduction will benefit them more. If you lowered property taxes in WA equal to revenue raised by an income tax that will benefit the wealthy disproportionally too, especially commercial properties. Same with a sales tax.
The 2016 tax reform limited SALT to $10,000, and capped the mortgage interest deduction, probably the two most abused deductions that unfairly penalized lower income citizens, plus increased the child deduction and earned income tax credit for those not paying income taxes. Overall it benefitted the working class, although it created a huge budget hole.
I didn’t notice you mentioned an income tax. The politics around state and local income taxes are different. The state income tax proposals are sometimes revenue-neutral and sometimes revenue-positive. The revenue-neutral position is to make it easier to pass or to make the total tax balance more progressive (because sales tax disproportionately impacts the poor who spend all their income on necessities). The revenue-positive position is, we need money for these important programs that aren’t being funded. At the city level, the arguments are the same but almost all of the proposals are revenue-positiive. There’s another motivation that has recently appeared mostly at the city level, to tax the rich just because they’re rich and they pay almost nothing in federal taxes. I’m not convinced by that because the justification for a tax is to fund an important public good, so you first need to articulate the good before the tax, not just tax for the hell of it. I suppose there could be a revenue-neutral city income tax, but cities have more unfunded needs than the state does because the state takes most of the tax money for itself and doesn’t provide many basic services that the cities have to fund.
https://ballotpedia.org/Washington_Income_Tax,_Initiative_1098_(2010)
This is the only income tax proposal I remember. They may have been more, but this is the one I remember. From that link:
“Additionally, the measure would have reduced the limit on statewide property taxes by 20% and increased the business and occupation (B&O) tax credit to $4,800.[3]”
So basically other taxes would go down, but income taxes would go up (from zero).
People proposing an income tax aren’t stupid. They aren’t going to just increase taxes. The plan is to reduce other taxes while adding that tax.
The problem is, the voters are stupid. They see a *new* tax, and think it is terrible. They don’t bother to consider whether their overall taxes would go up or down. They just assume the worst, and vote accordingly.
I’d argue is that it’s not voter’s stupidity, it’s their lack of trust in the state/local government to then keep rates at they are. There are zero examples in recent history in which a state introduced a new income tax and then did not subsequently raise rates.
Or – imagine this – voters disagree with the progressive mainstream that an income tax is preferable to another form of taxation. If I lived in eastern WA, I’d much rather see the state focus on property taxes as a primary funding source (like the Waleg did with the levy swap), therefore drawing more revenue from wealthier western WA.
Personally, I put income tax well below property taxes, use taxes (e.g. toll roads, fishing license, etc.), excise taxes (gas tax), and Pigovian taxes (tobacco, liquor, perhaps gas taxes again) in my preferences on how the state or local gov raises revenue. IMO income taxes are an effective way to raise revenue from the upper middle class (top quartile) but are often ineffective at raising revenue from the mythical 1%.
How do you know this? What anti-tax zealots are you referring to? Most people I know who fill out their income tax return take all the exemptions and credits they are legally entitled to, and try to minimize the tax they legally owe.
You hang out with a rich crowd. Only 30% of Americans itemize. Almost half the people don’t pay any income tax.
What makes you certain they supported Trump’s tax reform? Usually people don’t have an objection to others paying more, just themselves.
No, you don’t get it. It is cultural. It was the basis for the books “What is the Matter with Kansas” as well as “Just How Stupid Are We?”. People don’t vote their self interest. They don’t vote intelligently. They vote based on image and tribalism.
There are lots of white Republicans who have nothing to gain from tax-cuts, and everything to lose from cuts in social programs that come from it. The 2017 tax cuts remain the only significant law passed by Trump. It is the signature legislative accomplishment of President Trump’s first term. He didn’t build a wall, or do anything else he promised — but he got those tax cuts. There is a reason for that. Tax cuts are what unite the Republican Party. They wouldn’t be possible without the rank and file of the Republican Party supporting it. Conventional wisdom is the Hillary Clinton lost the election because she lost the support of working class whites — the very people who pay no income tax supported a party (and a candidate) whose primary focus is tax cuts.
So yes, there are people who vote for tax cuts even though they don’t pay them. Of course, they also have the support (and massive funding) of wealthy people who benefit greatly from the tax cuts. They are able to do that by appealing to the tribal nature of voters. Trump, or Bush, is “one of them”, because of the way they talk (or the things they eat) even though, of course, they were born with wealth very few of us have ever experienced.
Since the ballot is already sent out, I assume there is no way we can add the car tab component to the STBD this election?
Or maybe it is a chance to add a puget-sound regional car tab next election?
Yeah, to late to change the transit proposal. If I remember right, the city could add something later (on top of the sales tax). The county could as well, but I’m not sure if they will try. Car tab taxes are unpopular. Maybe in four years (during an election year) they might try something, but I doubt they will try anything before then.
Of course car tab taxes could pay for anything, so they could pay for something that is more likely to pass.
The latest change date was August. Maybe the council can do something without a vote. They’ll probably wait until after the election and the result of Prop 1. If Prop 1 passes it will give them more leverage to argue it’s the will of the people, and if the state and federal results are more liberal it would also give them more leverage. Otherwise February is the next election.
The county was planning to offer a countywide Metro measure this year but called it off due to the distractions of covid planning, and it didn’t want it on the same ballot as the Harborview measure because voters might be only willing to choose one or the other and the county wanted to make sure the Harborview one passes. So Seattle put up a TBD renewal instead. But because of the uncertainty of I-976, neither of them would have had a car-tab component. Eyman failed to slash car tabs permanently but he did succeed in gutting transit service for 6-12 months. That’s a success of some sort, if you can repeat it every few years.
It’s certainly good news! Still, the longer the pandemic continues, the bigger a transit funding crisis will be with us. It not only undermines things like ridership and fares, but it dampens demand for things like new Boeing planes and vacation cruises.
We will still need to monitor, evaluate and adjust transit service through these trying times — and deal with the unfortunate long-term impacts to demand, voter popularity and the economy that will linger.
I think that this ruling does not resolve the challenges ahead. It just softens them.
I’m relieved I-976 was struck down even if the reasoning leaves me feeling the decision was pretty much political, and a wierd precedent.
As for the freed-up money, I’m not really for just bringing back the existing failed service patterns, when there are capital improvements that need to be restored and will be a better long-term investment.
I’d also like to see Metro invest in fully restoring the local components of the Northgate Link restructure, and invest in First Hill and SLU local connections before high-carbon-footprint express stuff. Invest particularly in a western version of route 8, and give it all the speed advantages that can be mustered. Do that work now before perpetual Carmageddon returns to SLU.
It will be interesting to see if the legislature addresses the valuation method for used cars in ST 3. The legislature at one point offered to convert the valuation method to Kelly Blue Book I believe to broker a peace over I-976. I thought I-976 got a lot of traction based on a valuation method that was different than reality, and struck a lot of voters as deceitful.
I agree in the political wisdom that the farther the radius from Seattle the less likely a tax increase will pass, or the more likely a referendum repealing a tax increase will pass. For taxes supporting transit, or the homeless, I would be wary of going outside King Co., and ideally Seattle, although that is unfair to Seattle in many ways because of the tax revenue Seattle generates for other parts of the state.
The recent decision by several eastside cities to opt out of King Co.’s 0.1% emergency housing sales tax increase and instead use the tax revenue in their own cities, and ST’s subarea equity policy, lead me to think there is a fundamental division between east and west King Co. right now, and any county tax increase will have a higher chance of passing if local cities control the revenue generated in their cities. For example, as I have posted before, the car tab fees generated $7.5 million in revenue from Mercer Island alone each year above the $30 based tab fee, and yet Mercer Island received back directly a $36,000 state grant for “intermodal transportation” , and receives very little of the tab fee in services. We essentially have no intra-Island transit, and the eastside subarea is paying for East Link. I imagine it is even worse for cities like Issaquah.
Personally I think it is time to bifurcate King Co. between east and west, since the geographical size of King Co. is so huge (nearly the size of Rhode Island), and there are such differences in vision between the eastside and westside, which means Seattle.
Other cities can pass transit benefit districts like Seattle did, and they’ve had five years to do so. If a countywide measure passes and all the cities take the money for their own city transit goals, how is that different from all of them passing individual tranit districts? Do they get more money under the county formula? Does it have a greater chance of passage? if the latter, then aren’t they counting on other cities’ yes votes to counter their own city’s no votes? In any case, the last two countywide Metro measures failed so there’s no guarantee another one would pass. For all those transit-tax happy people in Seattle there are people and cities in South King County who think they’re too poor to afford more transit taxes.
“It will be interesting to see if the legislature addresses the valuation method for used cars in ST 3. The legislature at one point offered to convert the valuation method to Kelly Blue Book I believe to broker a peace over I-976. I thought I-976 got a lot of traction based on a valuation method that was different than reality, and struck a lot of voters as deceitful.”
The whole argument that the valuation method is deceitful is crap.
Sound Transit, along with supplying the formula for calculating the new tax amount, also had an online calculator app. This was also made available before the vote by the Seattle Times. It told you exactly what you would be paying.
Most every person I’ve questioned who was complaining about the amount, happened to have voted for I-976, and had voted NO on ST3.
What they would say to me was “Well, the voters didn’t know what they were voting for!”
Seriously?
I voted yes on ST 3 although it was extravagant (but with ST subarea equity what the hell) and I was not aware of ST’s valuation formula and pay pretty close attention, and I voted no on I-976 although I almost voted yes based on the valuation formula. I think government deceit is wrong.
I think many voted yes on I-976 because when they saw how their used cars were valued for purposes of the tax, and compared it to Kelly Blue Book, they felt deceived. Otherwise I doubt the legislature would have spent so much time on this subject, or the press, or I-976’s sponsors, and I would be surprised if the legislature does not revisit the valuation formula.
After all, why would any agency use a valuation method that has no basis in fact, or use in ordinary life? It was deceit, pure and simple, which is why ST moved so quickly to bond the revenue, which is the real reason the supreme court struck down I-976, and ST’s main argument to the court: it had already spent the money.
The state supreme court struck down I-976, but the fact is a majority of state voters voted for I-976. ST has a terrible reputation for honesty, even in Seattle, and I doubt ST could ever pass any kind of tax again, and its actions have hurt other jurisdictions that want to ask the voters for a tax increase. ST’s dishonesty is simply exhausting. Metro can be maddening, but at least it is not seen as inherently dishonest, and loathed by so many.
I can’t think of any agency that has given more ammunition to those who want to attack government per se, or question any tax increase, than ST. I-976 may have been struck down, but in the larger picture I would bet Snohomish and Pierce Counties pull out of the ST taxing district despite subarea equity, and I don’t see the North King Co. (Seattle) subarea ever raising the revenue for the promises it has made to Seattle neighborhoods, even before Covid-19.
The overturning of I-976 may have been a victory, but the passage of I-976 is more concerning to me because of the enormous obstacles to qualify and then pass a referendum, because transit is a tiny portion of our public needs, and Covid-19 is going to leave some huge budget holes that have to be filled with cuts or revenues at every level of government. Overturning I-976 is not going to help that. My concern is anti-tax advocates won’t have to resort to referendums in the future, because the proposed tax will fail at the ballot.
ST didn’t have a choice in which valuation formula to use. When the legislature passed a law to authorize ST3, they mandated that formula.
So, you’re basically saying that ST should have avoided car tabs entirely because the depreciation schedule mandated by law was not accurate (and cut projects as a result). Because, those were really the only two options. The fault for why ST3 did not use the Kelly Blue Book ultimately lies with the legislature.
That said, the inaccurate depreciation schedule did have the practical effect of making the ST taxes more progressive by shifting burden from drivers of older cars to drivers of newer cars. And, of course, if the valuations were lower, the rates would have to be higher to generate the same level of revenue.
STB posted a pricinct by precinct analysis of I976. For the most part, it failed in the Sound Transit district by about the same margin as ST3 passed, while passing elsewhere in the state as virtually every Republican in eastern WA voted “yes” to “stick it to Seattle”, even though they don’t pay any Sound Transit taxes.
Within the ST district, there was some geographical shift relative to 2016, with Seattle itself shifting even further to the left, balanced by Pierce, Snohomish, and South King shifting to the right.
The state switched to the “lower” valuation formula several years ago but then never used it, and then in the ST3 enabling legislation it referred to the old “higher” formula. Since Sound Transit is the one visibly collecting it, people blame Sound Transit but it was really the legislature.
The Kelly Blue Book is a non-starter because it would make the law dependent on a private company’s product. Everyone who’s directly involved in setting the valuation or wanting to check it and the bondholders’ interests would have to subscribe to the book. Mandating something that benefits a single company is corruption.
I put “lower” in quotes because it’s really only lower for recent, more expensive cars. For older and less expensive cars it’s higher. But the ones who make the most noise about car tabs are the ones who have expensive cars and replace them every few years.
I’m not even thinking about Sound Transit; I’m thinking about saving Metro service, and the other local transit agencies, and the small towns and rural areas who depend on car-tab revenue for their basic road maintenance and bus service and paratransit and inter-county bus connectors. I’m also thinking about all the externalities caused by driving and parking — drivers receive the highest subsidizes of all, and cause the most harm to others.
Pierce and Snohomish may well pull out of Sound Transit anyway. That will be their problem, and the problem of people who go to those counties. There’s no plan B for their regional transit, and they’re still growing. North King will have to fit into whatever budget it has. I’ve always been skeptical of West Seattle Link (instead of multbranch BRT), and Ballard Link is pretty far east of the cluster of Ballard destinations, and the 14th Avenue option puts it even further away. So with those flaws and the relative worth of the Tacoma, Everett, Paine Field, and Issaquah extensions I’m ambivalent about ST3, in a way I never felt about ST1 or 2.
The RTA tax calculator is still available online, and this is the Seattle Times version, who we all know is Sound Transit’s lapdog, right?
This Sound Transit ‘tax deceit’ excuse is tiresome.
It puts into question the other conclusions drawn by all those who claim to have paid pretty close attention.
If you want to know what the voters want and what they will pay for, transit or roads, then put a ‘roads only’ measure on the ballot. Because my gas tax now is getting funneled into that $10 billion project on the east side of Lake Washington, all without my vote.
“”
I’m going to write a voter initiative that all property tax assessments have to based on Zillow Zestimates.
You can’t actually allow Kelley Blue Book to set your valuation rates. It would be delegating state authority to a private person, which is against the state constitution. The court didn’t have to rule on that issue, but it gave pretty strong indications it would. An administrative agency could agree with Kelley Blue Book valuations as they are issued, under the state Administrative Procedures Act, but it would have to do it every month.
Daniel,
So I gather that you’re down with doing away with depreciation on commercial buildings then? Because “After all, why would any
agency useCongress choose a valuation method that has no basis in fact?”The truth is that unless they’re dumps or located in a dusty, dying rural town, commercial buildings increase in value over the years. Yet con-men like America’s answer to Il Duce shelter hundreds of billions of dollars of profits on such structures yearly with these paper “losses”.
@ K-Gee Best comment on this post.
I think most cities have passed TBD’s. Mercer Island passed one and applies a $20/tab fee on vehicles that raises around $375,000/year. Under state law a city can raise that to $40 without a vote of the citizens. The allure is the money stays locally. Apparently the Mercer Island Council does not feel the citizens are ready to go to $40/tab, although there has been talk about it. I like the local tab fee because it is about the only tax that stays on MI.
A large portion of the tab fee goes to ST, so now the eastside subarea will have even more revenue with no real place to spend it, except I guess huge park and rides.
https://www.seattletimes.com/opinion/editorials/lawmakers-respond-to-public-outrage-and-fix-formula-for-car-tab-fees/
https://www.king5.com/article/news/car-tab-confusion-the-math-behind-your-big-bill/281-411571066
Here are a few common editorials on the car valuation. I don’t think the overturning of I-976 made this anger or feeling of duplicity go away. In fact it probably made it worse. It is very rare to get the entire state to qualify and then pass a referendum, so the legislature should take notice any time it happens. Last time the 1% annual increase in the property tax levy was struck down by the court on the same grounds the legislature adopted it, and that has really hurt local cities.
My guess is the state legislature has some huge revenue needs coming up. So does just about every city. My advice would be to fix the valuation issue because it is clearly a hot button issue revolving around honesty, so it does not continue to infect other tax increases.
Or we can continue the trend to limit tax initiatives or ballots to smaller and smaller jurisdictions, like the upcoming levy in Seattle.
What $10 billion eastside project Jim? If you mean East Link the cost is $5.5 billion (plus 100% of the express buses to and from Seattle). I don’t think the gas tax funds ST. https://www.soundtransit.org/get-to-know-us/paying-regional-transit Plus the eastside subarea is paying for East Link, so if you don’t live on the eastside your taxes go into a different subarea.
If you mean the widening of 405 I believe the cost was $800 million, according to WSDOT, with HOT lanes paying some. But personally I agree with subarea taxing, for all projects. Let each subarea pay for what they want. (Of course that would include the $500 million for Seattle’s half for the express east-west buses until East Link opens that the eastside subarea has to pay 100% of. $500 million is a lot of money).
The fact I-976 qualified and then passed leads me to believe we will see more referendums challenging taxes, because it tends to freeze local councils and the state legislature from raising taxes. That is why I believe the farther you go out from Seattle the more likely those referendums will pass, which is why I favor local and subarea taxes.
I agree – I wish the Dems would focus their energies on equipping our major cities and counties with the financial tools to raise more revenue, rather than focusing on a mythical state-wide income or carbon tax, and I wish the GOP would stop preventing the more progressive & wealthy parts of the state from taxing themselves, as that would allow for the poorer, more rural parts of the state remain low tax/small government as they prefer.
This shows Renton to Bellevue @ $1.22B, plus the various interchange rebuilds. $10B seems roughly correct if you wrap in the entire 167/405 corridor widening.
https://wsdot.wa.gov/sites/default/files/2018/12/12/I405-EAG-Dec2018.pdf
It passed because people tend to vote for tax cuts, especially car-related ones. Some of them also want transit but they don’t see the contradiction. It’s like when one initiative passes to reduce class sizes and increase teacher pay, then another passes to reduce school taxes that would have funded those things. Often it’s not the same people: the class size measure passes in a presidential election when liberals vote, and the tax-cutting measure passes in an off-year when only conservatives vote. (Liberals/Democrats have a problem of not voting in non-presidential elections, which is their own fault.) But sometimes it is the same people because of and getting something for nothing or imagining government is stuffed with fat.
The anti-tax movement was particularly strong in its early years during the 1990s and early 2000s when I-695 (car tabs) passed, and also 600 and 601 (which limits non-voted tax increases to 1% per year, or less than inflation, and requires levies renewed every few years for everything beyond that). Those are what cause most of our transit-funding and general-service funding problems now, and why we have to keep revoting for TBDs and E911 service and libraries every 5-10 years. When I-695 was ruled unconstitutional in 2000, the legislators was so afraid of the anti-tax movement they enacted its provisions legislatively. They were afraid if they didn’t they’d be swept out of office.
In the mid 2000s this started to reverse. Several Eyman initiatives failed, voters approved large tax increases, and voters saw that essential government services depend on taxes. Now Eyman’s results are mixed: some initiatives pass, others fail.
Now there’s a recession and a pandemic-related fear of transit. That will probably cause state and local governments to be more cautious about tax increases and keep them smaller. But it doesn’t mean the legislature will go all Eyman again and enact I-976 as a whole or large parts of it. Maybe it will, maybe it won’t, but there would be a lot of opposition, especially by Puget Sound lawmakers who can’t deliver essential services without money. And there’s more of an awareness that housing, food, medical care, transit, and carbon reduction are essential things.
The legislature may pass a small part of I-976, like the “lower” valuation schedule, that has the most widespread support and the least opposition. But it will at least think about backfilling the revenue some other way so that transit programs aren’t harmed. If it doesn’t, there will be a lot of vocal opposition, both outside and inside the legislature.
People have been known to approve tax cuts and extra spending in the same election. It reminds me of this: https://www.youtube.com/watch?v=chMCU5VSuqw
$10 billion is the total cost (adjusted for inflation) for the ‘congestion relief’ road project FEIS that was put together in 1999-2002 by WSDOT.
The ~$800 million you state is only a portion of that. It is covers the portion of the total project for the corridor taking care of adding the two lanes in each direction only between Renton and Bellevue, in what was called ‘lane balancing’ back when the EIS was being put together.
When you scroll down on the WSDOT web page describing that project you will see a reference to the I-405 Master Plan which brings you to the ‘Master Plan’ page. (obviously)
Look to the left, and click on the Final Environmental Impact Statement.
By clicking on the Summary pdf, and scrolling to page 9, you will see a list of what alternatives were looked at, and the column to the far right is what was chosen.
When you adjust for the rate of inflation from when that EIS was being developed (using year 2000 budget numbers), you will arrive at the $10 billion amount I stated.
The I-405 Corridor Program in total includes adding 4 lanes between Renton and Bothell, and two lanes between Lynnwood and Bothell, and some sort of configuration between Tukwila and Renton, but I forget that detail. These estimates also include the glorious California style interchanges at the SR-167, I-90, SR-520, and SR-522. These are $1 Billion + projects themselves (emphasis on the +).
I’ll get you started with the first <a href="https://wsdot.wa.gov/Projects/I405/RentontoBellevue/home"link:
https://wsdot.wa.gov/Projects/I405/RentontoBellevue/home
<a href="https://wsdot.wa.gov/Projects/I405/RentontoBellevue/home"Let's try that again.
I hate touchpads. I need a mouse for this laptop, too.
Daniel,
YES! Let’s have that “subarea” taxation policy statewide. Money raised within a county or city must be spent within that county or city. I love the idea.
‘Course, Loren’s kids will be going to school in a one-room schoolhouse but, you gotta’ break some eggs to make an omelette, right?
Thank you, Daniel, for the quick and long reply. There’s no doubt buildings require maintenance, but that’s usually fully deductible in the YOE. And yes, some buildings do lose value because the surrounding area loses value. And I have absolutely no objection to having a loss on sale be a loss chargeable against other profits, including carry-forwards.
Machinery and other “business tools” depreciate; the space in which to pursue an enterprise’s activities does not.
I agree with your overall point that taxes should be straightforward, understandable and honestly described. It should be a fundamental of government, no matter where one sits on the policy continuum.
And I’m sure that Frank and Martin will eliminate this discussion.
This should have been in reply to Daniel’s long post just below. My apologies for clicking the wrong “Reply”.
Hi Tom, you won’t get any argument from me about tax loopholes being abused, commercial depreciation being one of them. On the other hand, buildings do depreciate (like cars) as they age, although the land may appreciate (the two combined create the appraised value for property taxes), and a commercial building pays tax (or should unless you are the President) on income from rents, the combined value of the property and improvements, pays REET tax on the sale of the building, and capital gains on the net proceeds from sale (also usually gamed). Probably few taxes are as abused as commercial development.
(Although a different subject, one of the real issues with aging steel framed commercial towers is they are as expensive to tear down (actually dismantle ) as they are to replace. Now that many are reaching the end of their lives and need huge amounts of investment to make them competitive with new buildings and able to attract the large clients, and the supply of concrete buildings to demolish is dwindling, these “orphans” are a problem for large cities. The Seafirst “Black Box” is a good example).
So the property tax is based on the FMV of the building and land, and will reset upon any sale since it is generally assumed the seller negotiated for the highest price and the buyer the lowest, which equals FMV at the time, until reappraised.
The valuation for used cars used by ST would be akin to valuing property taxes on something other than FMV, which makes it more like some kind of flat tax, and that should have been disclosed. Some on this blog might have understood the valuation method when ST 3 was sold, but I followed ST 3 pretty closely and don’t remember the car valuation formula being disclosed, and enough citizens were surprised — which usually means angry — it was the hook 976 needed, and forced the legislature to seriously discuss amending the valuation to Kelly Blue Book to try and prevent 976 from passing.
Just because the state supreme court struck down 976 for very technical reasons (and the fact ST bonded the revenue almost immediately because it knew the valuation was deceitful which means ripe for a referendum) doesn’t mean the citizen anger has gone away, and the risk is that anger will bring more referendums, and make the state and cities more hesitant to propose tax increases.
The lesson is be honest about any tax, and what it is used for, and realize 99.9% of citizens are less sophisticated when it comes to valuation formulas than some on this blog, especially when just all of us have bought or sold a used car in our life, and began with either Kelly Blue Book or Ebay to figure out the value. Some rightfully ask what kind of standing does someone in eastern Washington have to vote for 976, except every citizen has standing to demand honesty in taxation.
https://en.wikipedia.org/wiki/Tim_Eyman#Initiative_695_and_$30_Car_Tabs_origin
Some highly-recommended reading. 21 years ago, this self-same Body handed a certain frat-watch salesman’s head to Governor Gary Locke and a whole gaggle of Olympia Democrats. On a real pretty plate.
When they fell all over each other sewing it back on for him, they left the Capital’s own busline, Intercity Transit with same lasting level of damage that Joe Biden’s crime bill inflicted on so many undeserving recipients.
Governor Inslee? Representative Beth Doglio? State Senator Sam Hunt? You even think about re-offending like that and every squirrel, deer, and bunny-rabbit within a mile of the Dome will be answering your phone in the John L. O’Brien Building!
And also helping you “Work From Home!” But at least I owe The Seattle Housing Market one thing, in return for making my car my more likely future Home than any rental property. Transit-wise, the whole State of Washington is now my voting residence!
Which, if KIRO crash-reports aren’t even a little bit FAKE, gives me an expanding constituency of voters whose cars hate being stuck in traffic even more than we do.
Minute by minute, our cars retaliate with heavy fines for brake-wear, engine distemper, and fuel-bills. I like State Farm, but no money left for crash-related charity either.
Which is the reason why any other verdict from the Court this morning would’ve had my stolen Lacey office-chair picking up speed headed downhill for the Nisqually while I furiously scribbled out my own Initiative to make State-wide Car Tabs both permanent and double.
So that a whole State-full of motorists would finally be able to start getting our own cars out of each others’ cars’ way. And riding in seats going a lot closer to sixty than six. Aboard buses or trains, whoever’s speed’s got the Edge.
Streetcar mandate? Attorney General Ferguson…is it bribery to send The Court ORCA cards for Christmas? BTW, I dare you to fine them $124 for a bad tap!
Mark Dublin
This has been a really rotten year for transit and in general, so this is incredibly welcome news. I only wish it was handed down soon enough that the STBD proposal could have been floated with car tab revenue in addition to sales tax. Now the worry can be shifted to whether Seattle Prop 1 passes…
Northgate, was it? For what it’s worth, Tim Eyman and the Pennsylvania Avenue tenant who’s wrecking the block called my country share one thing. A craftsman’s understanding of the priceless value of confusion-driven outrage. No frat would have me, but if I keep it wound, my watch works fine.
And Jim, you might want to consider the Constitutionality of any mandatory fee that necessitates its own app to calculate. Bad enough a $124 bad-tap fine needs Sea-Tac Station for a Sistine Chapel, with a cloud of RCW’s for Renaissance angels. The simpler you keep it, the less stupid anybody can call legitimately call you.
But Daniel, transit’s level of unimportance in this evening’s fulminating seismic thunderstorm of public needs is yours to prove.
Because in the meantime, I’ve got a mountains-to ocean Region to build, three linear continents of grooved rail to install, and Hell’s own spiderweb of catenary to hang.
The truth? Eastlink’s opening ceremonies will include a gate-side delegation at Sea-Tac, who’ll present Patagonia’s most legendary barista with his Keys to the Island as Train One rolls in through those mobs of assembled multicultural bus passengers. If I’m wrong, I’ll buy you anything you want at Starbucks.
And when this country’s richest people finally start paying the same percentage of their income in taxes as our working poorest have always done, worst problem with our budget-holes will be what to do with all those homeless gophers. Meantime, I’m booked twenty years out.
Mark Dublin