Washington state Supreme Court rules on ‘car tab’ caps

October 22, 2020

Keith Goble

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The Washington state Supreme Court has ruled against a voter-approved initiative to cap certain vehicle taxes and fees. The court decision settles the fate of more than $4 billion in transportation revenue.

Initiative 976 was ruled unconstitutional by the court because it violated the state’s single-subject rule. Additionally, justices said the ballot title was “deceptive and misleading” to voters.

Initiative 976

In November 2019, voters in the state approved Initiative 976 to reverse course on a previous voter-approved initiative. Approved by voters in 2016, the prior initiative enables the state to boost transportation revenue via an increase in local “car tabs,” local vehicles sales taxes and state vehicle registration fees.

According to a fiscal analysis, the higher taxes and fees totaled $58 million over one year. The money is used for projects that include highway construction, county roads and bridges, commercial vehicle enforcement, and pedestrian projects.

Critics of the increased taxes and fees said that a lot of people had “sticker shock” afterward. They say people experienced car tab fees doubling, and in some cases the fees tripled.

The concern led political activist Tim Eyman to pursue an initiative to quell the increased taxes and fees. His pursuit resulted in the passage of Initiative 976.

Legal challenge

On Nov. 13, 2019, King County, the city of Seattle and other transit-oriented groups filed an injunction claiming the car tab cap initiative is unconstitutional. The coalition said the initiative violates the single-subject rule, and it would do “irreparable” harm to the state’s transportation budget.

A King County Superior Court Judge ruled shortly thereafter to temporarily block the initiative from taking effect. The decision allowed the state to continue to collect revenue from the higher taxes and fees.

On Dec. 4, the state Supreme Court acted by a simple majority to uphold the decision until the litigation challenging the initiative’s constitutionality was settled.

Transportation work halted

Uncertainty about the legal challenge’s outcome resulted in Gov. Jay Inslee instructing the Washington State Department of Transportation to curb projects yet to get underway. The governor cited an anticipated budget shortfall due to the cap on taxes and fees.

Critics of Initiative 976 have said capping fees will strip state and local governments’ ability to move forward with needed projects. Specifically, they said the initiative will result in $2.3 billion in lost funding for local governments. The state will lose out on $1.9 billion over the same time period.

In addition to the cap on car tabs at $30, commercial trailer fees was set to be reduced from $34 to $30, and an electric vehicle fee was to be trimmed from $150 to $30. Additionally, authorization would be repealed for certain regional transit authorities to impose motor vehicle excise taxes.

Court ruling

On Oct. 15, court justices ruled unanimously that Initiative 976 violated the state constitution limiting ballot measures to one topic.

Additionally, eight of nine judges ruled the measure was misleading.

“The people of our state have the power to propose and approve legislation,” Justice Steven Gonzalez wrote for the majority. “When the people act in their legislative capacity, they are, like any other legislative body, bound by constitutional constraints.”

The court decision clears the way for the state to move forward with planned work. LL

More Land Line coverage of news from Washington is available.

Keith Goble

Keith Goble has been covering trucking-related laws since 2000. His daily web reports, radio news and “OOIDA’s State Watch” in Land Line Magazine are the industry’s premier sources for information regarding state legislative affairs.