No on Initiative 695

An article from the August 1999 Shield & Star Newsletter
Washington Association of Police & Sheriffs

Good news or bad news? Initiative #695 will be on the November 1999 general election ballot. Presently, a Motor Vehicle Excise Tax (MVET) is currently applied to the value of all motor vehicles. A license fee of $23.75 is also required for registration renewal.

In November 1998, Washington voters passed Referendum 49, which reduced the MVET by $30 per vehicle and changed the depreciation schedule for newer vehicles. Referendum 49 reduced taxes by $258 million in the 1999-01 biennium. Initiative 695 would repeal the remaining state MVET, the state trailer and camper excise tax, and the state clean air excise tax in their entirety. It would also increase the annual vehicle registration fee (license tab fee) to $30 for passenger cars, cabs, motor homes travel trailers, motorcycles, other trailers and tow trucks. Currently, the license fee is $27.75 for a first time registration and $23.75 for the annual renewal.

In the aggregate, I-695 would reduce motor vehicle taxes and fees by up to $1.1 billion in the 1999-01 Biennium and by up to $1.7 billion in the 2001-03 biennium. On an annual basis, I-695 would reduce taxes and fees by an average of $142 per registered vehicle. Since motor vehicles fees and taxes currently paid depend on the type of vehicle and its valuation, the amount of the reduction for each taxpayer will vary greatly. For example, an owner of a vehicle valued at $40,000 would save about $850 in taxes; whereas an owner of a vehicle valued at $5,000 would save about $80 in taxes annually.

Currently, the revenues that would be eliminated if I-695 passes: support transportation, criminal justice, public health, and other programs. It also repeals the statutory method for the valuation of vehicles, as well as the distribution formulas for MVET revenue. In addition, the initiative would require voter approval for new or increased taxes or fees proposed by state, county or local governments. The initiative would take effect January 1, 2000.

WACOPS Executive Board Opposes I-695

At the August 2, 1999, meeting of the WACOPS Executive Board, extensive time was spent on an overview and position of WACOPS on I-695. This would reduce the MVET to $30 for each and every vehicle and severely impact the ability of state and local governments to enact even minor fee increases.The negative impact on public safety in Washington State was clear to the executive board who took a position of opposition and instructed executive director, Mike Patrick to do everything possible, on behalf of WACOPS, to defeat I-695.

I-695 Worst Possible News for Public Employees

At recent meetings of their respective Executive Boards, the Washington State Council of Firefighters, the Washington State Patrol Troopers Association and the Washington Council of Police & Sheriffs all took positions of opposition to Initiative 695 which limits licensing fees to $30 per vehicle.

I don’t believe that anyone is enamored with the Motor Vehicle Excise tax as it now exists in the state of Washington. It is costly to every class of vehicle owner and it is an onerous tax. In my situation I would save approximately $1,000 per year. I have talked to numerous others where savings would also be substantial.

Then why the opposition from WACOPS to I-695?

Part of my duties as your executive director is doing research on issues and then presenting the facts from that research to the executive board, WACOPS delegates and to the general membership. I did just that on I-695.

Information regarding the impact of I-695 was clear that public safety and more specifically law enforcement would be the big losers if I-695 were to become law. In my former life as a ten-year member of the Washington State Legislature, both in the House and Senate, I had the reputation of being a tax-cutter. I was the statewide coordinator of the initiative that repealed the inheritance tax in the state of Washington. I was also a sponsor of two initiatives that barely failed to make the ballot that would have capped state spending in the state of Washington. Incidentally, both initiatives were similar to I-601, the spending control measure now in place. The only difference is that our initiative did not have the intent of reducing the funds available beyond the imposed spending limit, which is what has happened with I-601.

Thus, I believe my credentials as a tax-cutter are clear! Then why the opposition to I-695? Simply put the initiative is badly written and has a draconian affect on basic government programs, whether they be at the state or local level. Some members are saying that governments always have a hidden chest of money that could be used for replacement purposes if I-695 passes. Not true! The scope of I-695 is huge. Not only will it have a major negative impact on transportation projects in our state but it could adversely effect our bond rating, thus increasing the costs of funds borrowed to pay for those projects and maybe for other purposes as well.

Look at your own government unit and the funds they will lose for a variety of purposes if I-695 passes. As an example the formula for disposition of voter approved Referendum 49 funds is repealed. That means that MVET distributions to the municipal and county criminal justice accounts, county public health account, distressed county assistance account, municipal and county sales tax equalization accounts, ferry capital construction account, ferry operations account, motor vehicle funds, the Municipal Research Council, and the transportation funds are all eliminated. In addition major transportation accounts are repealed as is the funds placed in city police and fire protections accounts.

Based on my research, I believe that up to 1,000 law enforcement positions could be lost in this state. In addition, it will be more difficult to retain present members because of lack of funds for salary and benefit increases. As you all know many of our jurisdictions are having a terrible time finding qualified law enforcement recruits for open positions. I-695 will only compound that problem.

The WACOPS Executive Board opposition is not a “sky is falling” position. It is based on solid fact. The WACOPS board is reflective of our membership, which tends to be more conservative. If I-695 was well written and thought out and had a reasonable replacement funding mechanism for the MVET, I am confident that the board would have supported such a proposal. I-695 is not reasonable, it is not responsible and it is not in the best interests of our members or the general public.

In closing, if we can successfully defeat I-695 (I believe that we can based on surveys) then it is up to the legislature to find a more reasonable funding source for public safety, transportation and other vital programs.

I-695 Fiscal Impacts Calendar Year 2001 ($ in millions)

• State Department of Transportation ($277.0) State Ferries ($106.4) General Fund $23.6 State Patrol $22.8 *Other State ($23.6) Total (360.6)

• City Sales and Use Tax Equalization ($44.4) Police and Fire ($49.1) Criminal Justice (11.8) Travel Trailer and Camper ($1.2) Transportation Budget Direct Distribution ($19.6) Total ($126.1)

• County Sales and Use Tax Equalization ($8.1) Public Health ($26.9) Distressed County Assistance ($$11.0) Criminal Justice ($29.6) Travel Trailer and Camper ($1.2) Transportation Budget Direct Distribution ($10.0) Total ($86.8)

• Transit Public Transit Systems ($239.0)

• *Includes losses to the Air Pollution Control Account, Community Economic Revitalization Board, schools and the Washington State Crime Lab.