Seattle City Councilmember Sally Bagshaw said she won't let the potential loss of millions of transportation dollars affect the council's 2020 budget priorities.
Seattle City Councilmember Sally Bagshaw said she won't let the potential loss of millions of transportation dollars affect the council's 2020 budget priorities.
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Seattle Mayor Jenny Durkan and City Attorney Pete Holmes announced Thursday that a joint legal challenge to anti-tax activist Tim Eyman’s Initiative 976 will be filed next week and an injunction sought as soon as possible to prevent the loss of transportation funds while the case is being litigated.

Eyman showed up for the Nov. 7 news conference early, but was denied entry. Media representatives were ushered into the Norman B. Rice Room through a side door.

While Seattle and King County voters rejected I-967, which sets a statewide flat $30 car-tab fee, the initiative is currently passing by 54 percent. The only other counties rejecting the measure are Whatcom, Thurston and Jefferson.

“Unfortunately, this latest gambit by Tim Eyman was approved statewide by voters,” Durkan said.

Holmes confirmed the city will file its legal challenge as a joint lawsuit with King County. Executive Dow Constantine announced Wednesday that he had asked the County Prosecuting Attorney’s Office to prepare a lawsuit.

If the City of Seattle is unable to collect its local car-tab fees, the loss would be $32 million annually — $24 million from a $60 vehicle licensing fee that funds transit services and capital programs, and another $8 million from a $20 fee that covers basic transportation services.

“And this is happening right in the middle of the Seattle Squeeze,” Durkan said, “when we’re doing everything we can to get people out of their cars and on to buses, on to bikes, walking. We need to make sure we have more transit and more pedestrian and bike safety. Our residents need to be able to make the choice that they voted to make.”

The city attorney said the lawsuit will include 3-4 legal strategies, but declined to go into detail on Thursday. The full scope of the city and county’s arguments will be included in next week’s filing, he said, and one will be that I-976 violates the single-subject rule, which limits the scope of an initiative to only one issue or subject; the rule also applies to legislation proposed by state lawmakers.

Holmes said Seattle voters had already agreed to higher car-tab fees and that I-976 nullifies the city’s ability to seek voter approval moving forward. The city’s vehicle licensing fees were set to expire at the end of 2020, and SDOT director Sam Zimbabwe acknowledged the need to appeal to voters again next year.

The Seattle City Council passed an ordinance creating a transportation benefit district in 2010, and implemented the $20 vehicle licensing fee, as the TBD governing board, in May 2011. The board then placed the $60 fee for preserving and extending transit service through King County Metro on the general election ballot in 2014.

Proposition 1 passed by a wide margin, and it generates $54 million annually. While I-976 affects the $60 fee, it does not cut a 0.1 percent sales tax that is also included in Prop 1, Zimbabwe said. For every dollar generated, 79 cents is used for bus trips. Seven cents goes toward providing ORCA access to seniors and low-income residents. Another 7 cents goes into reserves, for which there is about $20 million available to temporarily minimize the impacts of vehicle licensing fee revenue going away.

Zimbabwe said the city purchases 350,000 service hours from King County Metro, and only has the ability to adjust those hours twice a year. No service disruptions are expected until March, at which point at least 100,000 hours will need to be cut.

“I’m very concerned that we’re even talking about 10,000 service hours of cuts,” Zimbabwe said.

The ORCA Opportunity program, which provides public middle and high school students with free transit, is expected to run out of funding next summer. The program was expanded in June to include certain residents living in apartments operated by the Seattle Housing Authority.

“Those ORCA passes are lifelines for them,” Durkan said.

The Seattle City Council is well into its 2020 budget process, and Durkan rejected a proposal by Councilmember Lisa Herbold to divert a portion of revenue from the mayor's proposed per-ride tax on Uber and Lyft into covering car-tab revenue losses. Herbold wants to take funds away from the Center City Connector, a new streetcar line she has long opposed constructing.

“The budget’s with council,” Durkan said. “We’ll work with them closely. Our budget director and others are already working, and Sam Zimbabwe has kind of a range of what the other cuts would look like because of the gravity of the tax cut.”

Seattle City Councilmember and budget chair Sally Bagshaw said she will not allow budget priorities to shift from affordable housing, addressing homelessness, criminal justice, hygiene and expanding the Law Enforcement Assisted Diversion (LEAD) program. Bagshaw also said she refuses to let Seattle give up its gains in getting people to switch from cars to transit.

“We’re passing a budget on Nov. 25,” she said.

During Eyman’s pre-conference pontificating, he said the city and county should not be suing the voters who approved the initiative, and after the conference he told transportation and union representatives they should blame voters if they don’t like the impact the capped car-tab fee will have.

“Voters did send a very clear message,” Eyman said. “They said they didn’t like this very dishonest tax; they’re just totally against it. They think that the valuation schedule is totally dishonest, they’re artificially inflating the value of our vehicles.”

Eyman was referring to the way vehicles are valued under voter-approved Sound Transit 3, which uses an old depreciation schedule rather than the Blue Book value to calculate annual registration fees.

Bagshaw said how vehicles are being valued should be addressed and that she respects that opinion.

Sound Transit, which is estimated to lose around $20 billion in revenue through 2041, has been relatively mum since it became clear I-976 would pass.

The Sound Transit Board will address with finance staff and general counsel the potential future losses and how to continue expanding high-capacity transit. It’s unclear if that includes taking legal action, which the board would likely discuss in executive session.

“The best blueprint for legal action against this is the same blueprint that has been for almost every Eyman initiative where the courts have struck it down,” Durkan said.

If an injunction is not granted, I-976 is supposed to take effect on Dec. 5.