Washington voters on Tuesday approved a ballot initiative that will, among other things, eliminate additional vehicle license renewal fees that cities like Longview and Kelso use to pay for street repairs.
Passage of the measure will especially put Kelso in a pickle.
Initiative 976 passed statewide with about 55% approval. In Cowlitz County the margin was even larger, with 73% of voters in favor.
Under the measure, state and local governments are estimated to lose about $1.9 billion $2.3 billion, respectively, over the next six years, according to the state Office of Financial Management.
“On a statewide level, I’m disappointed because I believe this is as much about economic development as it is about car tab fees,” Longview City Manager Kurt Sacha said Wednesday. “I think from that perspective it’s a detriment to mobility and transportation.”
Tim Eyman, who championed the ballot initiative, said taxpayers are getting “ripped off” by “dishonest vehicle taxes.” Rep. Jim Walsh, an Aberdeen Republican, said the initiative will force legislators to be more efficient and responsible with taxpayer money.
Longview and Kelso each have $20 additional car tabs to finance transportation benefit (TBD) districts, and Kalama has a $40 additional car tab. These fees will be eliminated under the ballot measure.
I-976 also repeals, reduces and eliminates other authorities for state and local governments to impose vehicle taxes and fees. (See breakout box, Page A8.)
However, Longview Public Works Director Jeff Cameron said Wednesday that he expects the measure to be challenged in court because it covered too many topics, which violates the state Constitution.
“There are a lot of parts of it that I think are not legal,” he said.
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Longview has been using the $615,000 it receives annually as part of the TBD to fund improvements to parts of 15th Avenue, Oregon Way and Nichols Boulevard.
While the TBD is eliminated under I-976, Longview issued 20-year bonds in 2017 and 2019 for road repairs with the intention of paying them off with TBD funds. Because the bonds were finalized before the initiative passed, Longview officials say they’ve been told the bonds are essentially grandfathered in, meaning the city needs to continue collecting the $20 fee until its obligation is paid off.
The initiative, therefore, would not affect Longview street maintenance in the short-term. However, it does eliminate grants that make up about 10% of RiverCities Transit’s operating budget to run its bus system, Cameron said.
Kelso is in a worse position than Longview. The city collects about $175,000 annually in its TBD, the majority of which is used to pay off about $3.5 million in bonds sold in 2016 for surface and drainage improvements on Yew Street and stabilizing measures along Minor Road.
Unlike Longview, Kelso sold general obligation bonds. They are not tied to the TBD but the city chose to use the car tab fee revenue to pay them off. Therefore, Kelso will need to find another way to pay off the rest of its 20-year bond.
Community Development Director Michael Kardas has said the city likely will have to cut half the money available for annual street repairs to continue paying off those bonds.
Kalama, which imposes a $40 vehicle tab fee, considered selling a $1 million bond to fund street repairs in case I-976 passes, but ultimately the city council didn’t go forward with it. The city collects about $100,000 from its TBD annually.
In addition to eliminating a method for cities to fund street repairs, the initiative also cuts part of the state’s Multimodal Transportation Account, which partially funds grants for local transportation programs. Lower Columbia CAP, the Human Services Council and the Cowlitz Indian Tribe receive grants partially financed by this account.
CAP’s rural, senior and Medicaid transportation programs in Cowlitz County served more than 22,000 riders last year, according to Executive Director Ilona Kerby.
Although only the rural van service funding would be directly affected by the initiative, Kerby said if enough funding is lost, CAP could shut down its entire transportation department.