Report from the King County Budget Office
Fall 1999

This information is provided by the King County Budget Office to inform the public of the potential impacts of Initiative 695, the "$30 License Tab Fee" initiative, which will be on the November general election ballot. The purpose is to offer factual information and not to support or oppose the initiative.

Initiative 695 Overview
This initiative would repeal the state motor vehicle excise tax, or MVET, on vehicles licensed in the State of Washington. It would also repeal the state travel trailer and camper excise tax and state clean air excise tax. The annual vehicle registration fee, or license tab fee, would be $30 for all vehicles — up from $27.75 for first-time registrations and $23.50 for renewals. The initiative would reduce vehicle taxes and fees by an average of $142 per registered vehicle The initiative would also require voter approval for "any tax increase" with a tax increase defined to include "a new tax, a monetary increase in an existing tax, a tax rate increase, an expansion in the legal definition of a tax base, and an extension of an expiring tax." (The full text of the initiative is available at from the Secretary of State on their web site.

I-695 would reduce statewide motor vehicle taxes and fees by up to $1.1 billion in the 1999-2001 biennium and $1.7 billion in the 2001-2003 biennium.

The initiative would also repeal the statutory method for valuation of vehicles as well as distribution formulas for MVET revenue.

The initiative would take effect Jan. 1, 2000.

Current MVET statewide distributions
Under current law, the state MVET would generate $1.5 billion in revenues during the 1999-2001 biennium. As shown in the chart, about 47 percent goes to state transportation programs, 29 percent to local transit districts and 24 percent to local governments for transportation, criminal justice, public health, and other purposes.

Specific designations and accounts are as follows: local transit districts, municipal and county criminal justice accounts, county public health account, distressed county assistance account, city and county sales tax equalization accounts, ferry capital construction account, ferry operations account, motor vehicle fund and transportation fund.

The state Office of Financial Management has raised several legal questions about the effect of I-695 on various revenue sources, including local transit MVET, a related $15 local vehicle license fee and local property taxes used for roads. This analysis assumes loss of the local-option transit MVET, local-option vehicle license fee and future increases in property tax collections for roads. For further information on the OFM analysis on the statewide and local impacts see their news article on their web site.

Potential impacts on King County
MVET Revenue reductions
Initiative 695 reduces 2001 MVET revenues by $122 million to three separate activities within King County government. The estimated annual impacts are as follows:

• King County Metro $106 million
• Seattle-King County Department of Public Health $10.0 million
• King County Criminal Justice (various agencies) $5.8 million

King County Transit
Initiative 695 results in a MVET revenue loss to King County Transit of about $100 million per year through elimination of the state MVET.

• MVET funds — $106 million eliminated in 2001, (the first full year), and $644.3 million eliminated in 2000-2005.
• Fare collections — In the event of service reductions, there will be reductions in ridership which could affect fare collections.
• Grants — grant funding could be reduced, primarily for capital projects.

Public Health - Seattle & King County
The Department of Public Health has received MVET funds since 1996 when the state legislature replaced local contract funds with statewide distribution of 2.5 percent of the MVET. The Department would lose MVET distributions which are currently projected at $10 million in 2001.

King County Criminal Justice Fund
Initiative 695 eliminates the MVET distributions to criminal justice agencies within King County. King County is estimated to receive $5.8 million in criminal justice funding from the MVET in 2001. Currently MVET funds are distributed to the Department of Adult Detention ($1.9 million), the King County Sheriff's Office ($1.1 million), the Prosecuting Attorney ($.77 million) and other criminal justice agencies.

Transit MVET Current Uses
Transit operating and capital programs currently receive approximately $100 million in Motor Vehicle Excise Tax revenues. Some of the services currently funded from the MVET include:

• Service hours — Metro currently provides approximately 3.4 million hours of bus service at an annual cost of $300 million dollars. Service hours, routes, and/or fares could be affected by the passage of Initiative 695.
• Paratransit — Metro currently operates a paratransit program which provides specialized van service for elderly and disabled riders. During 1999, 1.1 million riders were served at a cost of $33.6 million dollars. Reductions in MVET funding could affect the service offered by this program.
• Capital program — Metro's $124 million annual capital program consists of the maintenance base, bus fleet, park-and-ride, new technology, pedestrian access and transit-oriented development areas — all these activities could be affected by the elimination of MVET funding.
• Supporting services — Support services provided within the Transit Division to other county departments is partially funded by the MVET.

No decisions have been made concerning the allocation of reductions in MVET funding. If Initiative 695 passes, each King County department would do its best to get advice from the public wherever program choices are involved.

Public Health MVET Current Uses
Public Health - Seattle & King County would lose approximately $10 million in MVET funding in 2001. Programs which are currently funded by the MVET include:

• Programs providing food safety and E. coli, drinking water safety, chemical physical hazards, health and safety consultations, maternity care, services to the elderly, and a wide variety of other public health services.
• The WIC program, a food assistance program for over 11,000 women, infants and children.
• Immunization programs including educational programs, outbreak information, telephone hotlines, case investigations, and adult immunization programs.
• Family planning services to nearly 32,000 visits to over 21,000 clients.
• Outreach clinics and educational programs for sexually transmitted diseases (STDs) and AIDs programs. The County's clinic is the state's largest HIV testing and counseling center and currently detects more STDs than any other clinical facility in the state.
• County childcare health screening and education programs which provide public nurses and nutritionists to licensed childcare facilities to examine immunization records, provide health education and screening, and others services.

Choices about which services are reduced or eliminated have not been made and will be subject to public discussion.

For information concerning the impacts on the Department of Public Health contact Kathy Uhlorn at (206) 296-4600 or kathleen.uhlorn@metrokc.gov.

Criminal Justice MVET Current Uses
MVET funds for criminal justice purposes are used by all criminal justice agencies within King County. No determinations have been made concerning how the loss of MVET funds would be allocated to criminal justice or to other agencies. Programs which are currently funded from the MVET include:

• The Department of Adult Detention currently receives $1.9 million in funding from the MVET. The Department provides detention services to approximately 3000 misdemeanants and felons at the Regional Justice Center and the King County Correctional Facility. The department also provides other justice services.
• The King County Prosecutor currently uses MVET funding for the Domestic Violence Advocacy Program and in programs to prosecute misdemeanants or felons.
• The Department of Youth Detention uses MVET funding for youth detention units and juvenile probation positions.
• The King County District Court currently uses MVET funding for officers who supervise approximately 1,000 convicted domestic violence offenders. Funding is also used for clerical staffing to process cases.
• The King County Sheriff, which serves unincorporated King County, currently receives $1.1 million in funding which is used for patrol and traffic police officers.
• The Parks System currently uses MVET funding for youth and teen recreational and educational programs; and a teen center and associated positions.

Choices about which services are reduced or eliminated have not been made and will be subject to public discussion.

Potential impacts on Road Services
Revenue reductions
Over the next six years, the county's Road Services Division could lose as much as $80 million in revenue with the passage of Initiative 695. That figure includes a possible loss of $31 million in Vehicle License Fee (VLF) revenues and the loss of future property tax increases.

Current VLF and property tax revenues uses
Operating and capital programs which are currently funded from the VLF and property tax include:

• Maintenance — funds are currently used for pothole repair, drainage repair and improvements, shoulder paving and restoration, sidewalk repair and construction, storm-related repairs and traffic signal maintenance and replacement.
• Capital projects — including road surface overlay program, intersection and traffic improvement, capacity projects, and new sidewalks and pathways.
• Major projects — specific capital improvement projects including such projects as Juanita-Woodinville Road, Northeast 132nd Street/Northeast 128th Street, 100th Avenue Northeast, Issaquah-Pine Lake Road, 140th Avenue Southeast at Petrovitsky Road, 140th Avenue Southeast Phase I, Avondale Road Phase II and Woodinville Road at Avondale Road.

Additional analysis
The county's Budget Office and Prosecuting Attorney's Office continue to work with affected departments to clarify further potential effects of the I-695. More information will be available later this fall.