King County will challenge legality of I-976

County Executive Dow Constantine: ‘We must clean up another mess that Tim Eyman has created for our state, our region, and our economy’

King County Executive Dow Constantine is preparing to file a legal challenge against Initiative 976, which was approved by voters across the state in the Nov. 5 election.

A press release from the Executive’s office on Nov. 6 said Constantine asked the King County Prosecuting Attorney’s office to prepare a lawsuit challenging the constitutionality of I-976. The initiative promises $30 car tabs, but could result in more than $100 million in cuts to Metro services between 2020 and 2025.

The county reports this could include $22.8 million to the regional mobility grant program for nine projects including RapidRide expansion, access to transit, and reduction in services on Route 101 in Renton. In addition, Burien, Kent, Tukwila and Seattle would see cuts of $29.2 million in grants for RapidRide investments. Some $12.2 million would be cut to the Access paratransit program, according to the county.

The state Office of Financial Management estimated the state would lose roughly $1.9 billion in revenue through 2025. This includes $1.5 billion for the Multimodal Account, of which nearly half of goes to transit across the state.

“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, referring to the political activist behind the initiative.

Eyman said in an email that state Attorney General Bob Ferguson, who could end up defending the initiative in court, should recuse himself from defending the initiative. Ferguson has filed lawsuits in recent years against Eyman.

King County does not collect vehicle license fees or motor vehicle excise taxes, which are repealed under I-976. But the state, Sound Transit and 13 cities in the county use funding from those sources to pay for projects, some of which affect Metro operations.

The county could use one-time funding to bridge the budget until the state Legislature acts, or until replacement revenue packages are presented to voters. However, capital funds are usually used for purchasing material and building infrastructure, not operations.

“Today, our economy is generating unprecedented prosperity, while at the same time governments are forced to cobble together transit and road systems from antiquated, inadequate and unpopular funding sources,” according to Constantine’s statement.

Washington state does not have an income tax. Instead, it relies on property taxes, sales tax, voter-approved levies and special tax districts. I-976 destroyed the ability of transit agencies like Sound Transit to raise funds for voter-approved projects like the ST3 light rail build-out. The transit agency warned that it would take an additional two decades to fulfill ST3 if I-976 passed, pushing back its horizon to 2060. Sound Transit has said it could lose some $20 billion in funding.

Washington’s tax code has often been cited as the most unfair in the country. Lower income residents end up paying a greater percentage of their income, while wealthy residents escape relatively unscathed. Local governments are also prohibited from raising property taxes by more than 1% each year. This combination has hobbled local governments across the state, and in King County, this setup is leading to a situation where the county roads capital project fund will be depleted within six years.

Voters in King County voted against I-976, with more than 56% of voters casting ballots against the initiative as of Nov. 6. King, Thurston, Whatcom, Jefferson, Island and San Juan counties were the only counties to vote against the initiative. Snohomish and Pierce counties, both of which are within Sound Transit’s taxing area, voted to approve the initiative with 61.67% and 67.61%, respectively. Thurston County was a 50-50 split.

All of the Central Washington counties, where car tabs are much lower, voted overwhelmingly for I-976, as did much of Southwest Washington. Eastern Washington counties including Spokane, Whitman and Garfield counties also voted for the initiative, but with margins in the mid-50% range.

Vehicle tab fee initiatives from Eyman have been approved in the past and were then either not enforced or invalidated, such as I-776 in 2002.

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