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I-695: Who wins, who loses
I-695: Who wins, who loses
Car owners would save, but at a cost to services
Joseph Turner; The News Tribune
If Initiative 695 passes, David Baldwin of Puyallup would be one of the bigger
winners. He'd save more than $1,400 a year on license tabs for his 1996 Winnebago
Adventurer.
Rick Felty of Lakewood, on the other hand, actually would end up paying more
to register his 1957 Chevy. Instead of the current state minimum fee of $23.75,
he'd pay $30.
But don't count Felty among I-695's prospective "losers." He also owns a truck
and two other cars and would save hundreds of dollars every year if the ballot
measure passes.
"I wouldn't mind 6 bucks on the Chev," Felty said with a laugh.
For most of Washington's 4.7 million vehicle owners, the savings under I-695
would fall somewhere between Felty's Chevy and Baldwin's motor home.
The Nov. 2 ballot measure would repeal the state motor vehicle excise tax
and license fees and replace them with a flat $30-a-year fee, regardless of
the age or value of a vehicle.
The average savings would be $174, or about $350 a year for a two-car household,
according to the state Department of Licensing.
I-695 also would cut state and local government tax collections by $743 million
in 2000, more in 2001. Opponents say that makes all taxpayers losers because
it would force police officer layoffs, cuts in fire and health departments,
reduction of bus service and cancellation of many highway and local road projects.
"For folks who look at this from the perspective of their personal finances,
we have to get them to think about the other consequences," said Richard Milne,
spokesman for the campaign against I-695. "That's a huge trade-off."
It won't be easy to persuade vehicle owners to say no to a tax cut, especially
one that targets the vehicle excise tax, said I-695 Chairman Tim Eyman.
Many car and truck owners harbor a special resentment for the license-tab
tax because of how it is calculated and because it must be paid all at once.
Initiative supporters collected more than 514,000 signatures on petitions -
more than twice the number needed to get a measure onto the ballot.
"It's an unfair tax," Baldwin said. "They charge the tax against the Manufacturer's
Suggested Retail Price, which is something that hardly anybody actually pays."
Moreover, the state's 13-year vehicle depreciation schedule keeps the value
artificially inflated for years, he said.
The state collects 2.2 percent of each vehicle's value, plus $23.75, for license
renewals.
"We were actually in the process of selling our home and moving out of state
because we don't want to pay that level of taxation," Baldwin said.
Nearly 20,000 vehicle owners will save more than $1,000 a year if the excise
tax is repealed. Many RV owners are among them.
Eyman said he made a point to target RV owners when he was drumming up support
for the initiative. He even dropped by the Kingdome RV Show Feb. 18-21 and handed
out initiative petitions. And he found a receptive audience.
"We knew that of all the people that are getting raped by license fees, RV
owners are getting it the absolute worst," Eyman said. "Many of them are elderly
people who have decided not to have a home and they're being taxed twice as
much as they would be on a home."
Baldwin signed the petition.
"Not only did I sign it, that was the first petition I've taken and gotten
other people to sign," Baldwin said.
Baldwin, 62, a retired Tacoma city worker, is president of the Puget Sounders,
a chapter of the Family Motor Coach Association. The chapter has 80 local members.
"They were pretty eager to sign," he said.
Randy Fisher, sales manager for Tveten's RV Mart in Fife, said his employer
and other RV lots circulated I-695 petitions, too.
"It wasn't too hard to twist somebody's arm," he said. "We do get a lot of
people who are on fixed income and aren't necessarily millionaires. They worked
really hard and want to take off and enjoy their retirement.
"Our sales tax is high enough, and you add license on top of it," he said.
"There's a lot of people who will establish residency in another state just
to avoid the sales tax and license fees."
At Tveten's, RVs run the gamut from a 1970s-vintage motor home priced at $5,000
to a brand-new London Aire coach, the top of the line at $430,000.
The sales tax on the high-end rig is $36,000. The license tabs add another
$9,000 to the cost.
Even for a more modestly priced RV, Fisher said, the tax and license can be
financed so the down payment doesn't hit buyers so hard.
But when the license-tab comes up for renewal, it's all due at once.
At the other end of the spectrum, there are nearly 45,000 cars and trucks
that are so old or inexpensive their owners would end up paying a slightly higher
amount if I-695 passes.
James Fuller, a recent college graduate in Tacoma, is one of them.
Fuller drives a 1971 Volkswagen Squareback because he doesn't want the expense
of a newer car. He also thinks it's unfair for luxury car owners to pay as little
as he does to renew his registration.
Eyman said even the people who end up paying $6.25 more to license their vehicles
will get something out of his initiative.
The measure also would require a public vote on every government proposal
to raise fees or taxes, which, he says, will give the public some control over
lawmakers.
He also said many of those older cars belong to families like the Feltys,
who also have newer, more expensive vehicles and will get some financial gain
from I-695.
Baldwin said even though he and his fellow RV owners support I-695, they don't
think $30 is enough of a fee.
"To a certain extent, we think it's overkill or irresponsible in a way," Baldwin
said. "That $30 is really too low. There has to be some taxes, and there are
some things that the taxes pay for that we need."
Baldwin said he was hoping Gov. Gary Locke and the Legislature would call
a special session and put a more moderate alternative on the ballot alongside
I-695.
But they didn't. And, as a practical matter, it's just about too late to do
that in time for the Nov. 2 election, said state elections chief Gary McIntosh.
"The only alternative that they're giving us is that they want to fight it,"
Baldwin said. "It's all or nothing."
Marty Brown, Locke's deputy chief of staff, said the governor talked with
lawmakers and others about a possible special session.
"But I don't think there was any consensus one way or another what the response
would be from the Legislature," Brown said. "There's 147 legislators and 147
different ideas. There wasn't a consensus."
Moreover, he said, writing an alternative posed its own set of problems. Any
referendum from the Legislature would have had to be written in a way that repealed
something that didn't exist yet - I-695 - and putting something else in its
place, he said. And there was the possibility that both the legislative alternative
and I-695 would pass and create conflicts.
Milne said the logistics of running two campaigns - one in favor of the legislative
alternative and another against I-695 - also would have been very difficult.
Baldwin said absent an alternative, he's going to vote for I-695 and hope
the Legislature comes up with a more moderate alternative afterward.
* Joseph Turner covers state government
and transportation. Reach him at 253-597-8436 or joe.turner@mail.tribnet.com.
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SIDEBAR
Initiative 695:
Big savings for most
Here is a breakdown for Washington's 4.7 million registered vehicles as of
Dec. 31, 1998, and how much their annual tax break would be if voters replace
the Motor Vehicle Excise Tax with a $30 flat fee.
Paying a lot less
Savings / Number of vehicles
Less than $200 / 1,557,142
$201-$600 / 2,938,637
$601-$1,000 / 208,015
Greater than $1,001 / 19,794
Paying a little more
There are 44,931 vehicles that are so old and worth so little, they no longer
are assessed the excise tax. Their license tab costs would go up $6.25 a year
if the state's current relicensing fee of $23.75 is replaced with I-695's $30
tabs.
Source: Department of Licensing
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SIDEBAR
* How to reach the campaigns in Initiative 695
Yes: "$30 License Tab" 425-493-8707 or FAX 425-493-1027, www.i-695.org, tabs@lifetel.com
No: "No On I-695" 206-621-0602 or FAX 206-621-0640, www.no-i-695.com, jcsmith50@hotmail.com
© The News Tribune
