Local Impacts From Initiative 976
Jan 16, 2020 - On November 5, 2019, ballot measure I-976 passed with a 52.99% statewide majority. The measure was designed to reduce and remove authority to impose a range of state and local taxes, fees, and other charges relating to vehicles as well as limit annual motor vehicle license fees to $30.
The State has estimated that the total revenue loss to local governments over the next six years would be approximately $2.3 billion. Here in Mercer Island, the City collects approximately $377,000 per year using a $20 Transportation Benefit District (TBD) surcharge on vehicle license fees. Established in 2014, these funds are used directly for transportation-related purposes, including projects that improve access to transit. The City also historically received $34,000 in revenues each year from the State’s Multimodal Transportation Account, which is dedicated to pedestrian and bicycle facilities.
As a result of I-976’s passage, the City’s stands to lose roughly $411,000 per year, 13.7% of the Street Fund’s annual revenues, which will have a significant impact on street fund capital projects in 2020. Projects at risk of delay include rebuilding of damaged sidewalks along 80th Avenue SE in Town Center, residential and arterial street overlays, completion of the North-South Bike Route, and many others.
Nine plaintiffs (including the governments of Seattle and King County) sued to block the Initiative, alleging that it violated the single-subject rule and other constitutional provisions. In late November, the Initiative was halted by preliminary injunction, pending the resolution of the case, but cities with a TBD (like Mercer Island) are still required to collect and set aside vehicle license fee revenues.
Until the case is resolved in later 2020 by the State Supreme Court, the City will proceed as if the funds are not available and will revise the transportation improvement budget accordingly. For more information on expected impacts across King County, visit: https://kingcounty.gov/depts/transportation/metro/about/budget/initiative-976.aspx
