Voters approve I-976, the $30 car tab measure. Now what?

Nathan Pilling | Kitsap

As Tim Eyman, Initiative 976’s anti-tax champion, has watched the voting returns for his $30 car tab measure roll in, his reaction?

“Pure euphoria,” he said Wednesday. “It’s joy, it’s so gratifying that voters re-established their strong support for $30 (car) tabs.”

He’s already claimed victory.

Results are still being tabulated, but as of Wednesday, voters statewide have shown approval for the measure by a 10.42-percentage point margin (roughly 115,300 votes). Voters in Kitsap approved the measure by a 52.6 percent majority, joining most counties in the state but four, which went majority “no” on 976: Whatcom, San Juan, Jefferson and King.

If results hold, I-976, which would provide some immediate relief to taxpayers while cutting a swath of funding for state and local governments and transportation projects around the state, would go into effect Dec. 5.

The initiative takes aim at a range of taxes around the state. It limits state and local vehicle license fees to $30 per year for vehicles 10,000 pounds or less unless voters approve additional charges. It’d also repeal a state 0.3% sales tax on vehicle sales and seek to cut a tax on vehicles in King, Pierce and Snohomish counties that funds Sound Transit and keep local governments from collecting certain fees tacked on to car tabs.

According to an analysis of the measure by the state’s Office of Financial Management, the initiative would mean a total revenue loss over the next six years of $1.9 billion to the state and $2.3 billion to local governments.

More: How would Initiative 976, the $30 car tab measure, affect Kitsap?

Three-quarters of the lost state revenues would be from the state’s multimodal account, which funds public transportation, rail and bicycle and pedestrian projects, according to the OFM. The other quarter of the money goes to accounts that fund the Washington State Patrol, highway maintenance and construction and Washington State Ferries operations.

Transportation benefit districts — used in Kitsap by Bainbridge Island, Bremerton and Port Orchard — would no longer be able to levy vehicle fees that are tacked on to car tabs. Bainbridge adds a $30 car-tab fee, while both Bremerton and Port Orchard add $20. Bainbridge and Bremerton have projected they’d lose $600,000 a year, while Port Orchard estimates it’d lose around $200,000. Funds go to projects like road repairs, chip sealing and sidewalk improvements.

Kitsap Transit has estimated it would lose about $3.5 million a year, putting many capital projects at risk. In jeopardy are the state grants it relies on to buy new buses as well as funding allocated for new bus transfer centers in Silverdale and Bremerton. Rural mobility grants, which help pay for Kitsap Transit's ACCESS service for the elderly and people with disabilities, may also be affected.

What's next?

So what now? Budget evaluation and prioritization.

“We’ll have to re-evaluate what projects we can pave and what will have to wait,” said Port Orchard Mayor Rob Putaansuu, who said the $200,000 his city receives through its transportation benefit district makes up about two-thirds of his city’s street preservation and maintenance program.

Bremerton Mayor Greg Wheeler said he’d support going to voters with a sales-tax levy to replace the $600,000 of lost funding for the city’s neighborhood and residential streets and sidewalks program and said that’ll be his recommendation to Bremerton City Council members.

Wheeler said the city is prepared for 2020, but beyond that, “To continue our (neighborhood) street and sidewalk program, we’ll have to come up with another revenue source,” he said.

Kitsap Transit Executive Director John Clauson said his staff has been working on potential solutions but has yet to have a detailed discussion with the agency's board.

Even stripping Kitsap Transit's capital budget back to nearly nothing wouldn't cover the estimated $3.5 million a year the agency stands to lose, meaning bus service and fares could also be affected. Clauson held back on presenting a 2020 budget to the board just in case the initiative passed.

"We're going to have to be talking about other potential options, it may affect, certainly the capital projects, delaying them, it could affect service, it could affect fares, these are all the things we'll be talking about with the board," he said.

In Olympia, lawmakers will have some decisions to make in the upcoming legislative session as they turn their attention to transportation issues. Sen. Christine Rolfes, D-Bainbridge Island, who chairs the Senate’s budget-writing Ways and Means Committee, said legislators will need the Governor’s Office and the Office of Financial Management to lay out a clear financial picture as they consider what’s next.

“It shifts the focus of the 2020 Legislative session to the future of transportation in the state of Washington,” Rolfes said. “Prior to that I think we were all looking at a quiet session where we tweaked things and made some improvements to other things, so this is just a bigger project to work on.”

Department of Transportation spokeswoman Kris Rietmann Abrudan said in a statement that it was too soon to say how the initiative’s effects would be felt by the state’s transportation agency but said it would mean a “significant loss to specific programs supported by our agency budget.”

Assuming the measure does pass, DOT knows transportation accounts would lose about $451 million out of the $6.7 billion in the 2019-2021 biennial budget, she said. DOT would lose $645 million and $726 million in the 2021-2023 and 2023-2025 biennial budgets respectively.

Also among those affected: Washington State Ferries. Could fare hikes continue? Following I-695, another $30 car tab initiative championed by Eyman in 1999, the Legislature backfilled lost funding for the ferry system, but the initiative resulted in cuts to ferry service and fare hikes. Along with those moves, ridership tumbled from its peak in 1999.

“In the coming days and weeks, WSDOT will work closely with the Governor’s Office, the Legislature and the Office of Financial Management to answer questions, determine actions for WSDOT to take prior to and by Dec. 5, 2019, when the ballot measure takes effect,” Rietmann Abrudan said. “Together we will work to ensure that policymakers understand the tradeoffs as they determine how to implement the initiative.”

A legal challenge to the measure is likely. King County Executive Dow Constantine announced Wednesday that he had directed the King County Prosecuting Attorney’s Office to prepare a lawsuit to challenge I-976’s constitutionality.

“The passage of I-976 underscores the ongoing need for comprehensive state tax reform, but in the short term we must clean up another mess that Tim Eyman has created for our state, our region and our economy,” Constantine said in a statement. “There will be many discussions in the weeks and months ahead to determine how to overcome the loss of safety and mobility caused by this irresponsible initiative, but the impact of I-976 to transportation is – in a word – devastating.”

Kitsap Sun reporter Christian Vosler contributed to this story.