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Locke vows a car-tax overhaul if voters reject I-695
Locke vows a car-tax overhaul if voters reject I-695
by Jim Lynch
Seattle Times Olympia bureau
OLYMPIA - Gov. Gary Locke says if voters turn down Initiative 695, he will
pursue a dramatic overhaul of the state's car tax.
Locke decided to make that promise after advisers told him the Nov. 2 ballot
measure is likely to pass unless he offers voters a good alternative, said Ed
Penhale, spokesman for Locke's budget office.
Locke is still working out the details of his tax-cut proposal, but he is
already talking to legislators about meeting - if the initiative fails - to
work on the issue before they are scheduled to convene in January.
"The governor favors a dramatic overhaul" of the car tax, Penhale said. "If
I-695 is defeated, the governor is prepared to call a special session as quickly
as possible. . . . Otherwise, reducing the car tax will be the first order of
business when the Legislature convenes in January."
Polls continue to show about 60 percent of voters support I-695, which would
replace the vehicle license tax with a flat $30 fee and require voter approval
of any future tax or fee increases. The initiative's popularity is, in part,
fueled by the controversial way the state taxes vehicles.
State officials estimate the value of a new car on manufacturers' suggested
retail prices - the dealer sticker prices that usually get haggled down. The
problem is compounded by a depreciation schedule that often overvalues cars,
resulting in taxes based on inflated values.
Eyman isn't impressed
Locke has told his staffers he thinks the tax rate - 2.2 percent of a vehicle's
estimated value - should be lowered, and the formula for calculating a car's
worth should better reflect true market values. But it is unclear how deeply
Locke would agree to cut the tax.
I-695 sponsor Tim Eyman laughed at Locke's sudden proposal, which surfaces
more than three months after Eyman turned in a near-record 514,000 signatures
to get his initiative on the ballot.
Eyman says Locke and other lawmakers lack credibility on the issue because
they had their chance to make the tax reasonable and didn't do it.
"You can use your common sense and see these guys are lying again," Eyman
said. "The only way they're going to get the message is if 695 passes." Eyman
also noted Locke isn't proposing to give voters the control over tax and fee
increases that I-695 offers.
In fact, Locke has said he is more opposed to that voter-approval part of
the initiative than to its car-tax cut, which would reduce by $750 million the
revenue stream that helps finance state and local government programs and services.
Lawmakers tried to quell the public's mounting disgust over the state's high
car tax last year by giving taxpayers a $30-a-year rebate. They also tweaked
the depreciation schedule to lighten the burden on taxpayers.
But there were no efforts by Locke or lawmakers to cut the tax further during
the most recent legislative session, while Eyman quietly gathered signatures
for a second consecutive year.
Talk of special session a surprise
Although Locke has opposed I-695 from its inception, he hasn't yet aggressively
tried to defeat it, as he did last year with an anti-affirmative-action measure
that voters overwhelmingly approved.
Earlier this week, however, Locke surprised his staffers and legislators by
mentioning at a public gathering in Aberdeen that if the initiative fails, he
would like to call legislators to Olympia to deal with the car tax.
Senate Majority Leader Sid Snyder, D-Long Beach, says the Aberdeen gathering
was the first he'd heard about it.
Snyder agrees with Locke that the Legislature needs to act swiftly - if voters
give it the chance - to make the tax more fair. But he questioned whether an
emergency meeting was feasible.
"Calling a special session is very, very difficult," Snyder said. "You need
agreement ahead of time and good attendance."
More likely, he said, the car tax could be the top priority when the Legislature
convenes in January. Snyder says Senate staff members are already mulling alternatives.
"We're looking at options, on ways to soften the blow."
For example, Snyder said, perhaps the state should tax new vehicles at 90
percent or 80 percent of their sticker price. He also said perhaps the owners
of motor homes - who often pay more than $1,000 annually to keep their vehicles
street legal - could buy cheaper, seasonal license tabs.
If the Legislature meets before January to work out a car-tax cut, Snyder
and other lawmakers say they may also use the special session to cut unemployment-insurance
taxes that businesses pay in Washington.
Despite months of negotiations among legislators, business and labor leaders,
there isn't an agreement on how best to grant companies a tax cut in exchange
for an increased commitment to the state's worker-retraining program.
