Seattle city leaders are moving forward with $20 car-tab rebates for low-income drivers, despite overhead cost of up to $17 each. An additional $700,000 would go to promote and distribute discounted transit fare cards.
To give low-income drivers $20 rebates on their car-tab fees, Seattle’s city government intends to spend as much as $17 each in overhead costs this summer.
The rebates, in the form of Wells Fargo debit cards, are meant to offset the pain of the $60 car-tab fee that voters approved last fall. That measure will increase bus service citywide for the next six years.
“The administrative cost is 85 percent. That is extremely high for something like this,” said City Councilmember Tom Rasmussen, who chairs the transportation committee. “For nonprofits, ideally the administrative cost is no more than 15 to 20 percent.”
Get a discount
Low-income households in King County can qualify for discounts on transit fare.
The ORCA LIFT fare card from King County Metro Transit allows low-income people to pay a discount $1.50 fare per trip. Qualifying income is under $23,540 a year for singles, $48,500 for a family of four. More info at 206-553-3000 or
The new $60 car-tab fee, to fund more bus service, takes effect starting with June 2015 renewals, only within Seattle city limits. A $20 rebate for low-income drivers will be offered, but the program hasn’t started yet. Notices will be included in car-tab bills.
Still, the committee — also including Councilmembers Jean Godden and Mike O’Brien — on Tuesday morning recommended going forward in June, by endorsing the budget amendment, proposed by Mayor Ed Murray.
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“The fact is, it’s expensive to give people rebates,” said Andrew Glass Hastings, transportation adviser to Murray.
Efforts are underway to reduce the overhead fee, Bill LaBorde, chief policy adviser for the city’s transportation department, said Wednesday morning. For months, the city has struggled with a “numerator-denominator” problem, he said, of certain unavoidable costs like income verification, to provide “a very low benefit” of $20 per driver.
The city also proposes spending $718,000 to promote and distribute King County Metro Transit’s new discounted fare card, called ORCA LIFT, which took effect March 1. It allows users to ride for $1.50 a trip, rather than $2.50 to $3.25.
King County already established a network of community agencies and public-health providers enrolling transit riders. But the county had signed up only 8,529 people as of last week.
O’Brien called the low enrollment disappointing.
“I feel like we need to do a better job making sure everybody knows this is available,” he said. “Every food bank should have a big banner right there, that you can enroll.”
Besides helping people with their transportation, the discounts shielded the city from complaints on both the political left and right that a car-tab fee, along with a 0.1 percent sales-tax hike, were regressive.
Social-equity advocates, including the Seattle Transit Riders Union, have pushed the city and King County Metro Transit for fare discounts.
“It’s good the city’s stepping up to help,” said Katie Wilson, the riders union’s general secretary.
Proposition 1, to raise about $45 million per year, specifically requires the $20 rebates, along with $2 million annually “to improve and to support access to transit service” for low-income riders.
What hasn’t been widely known until Tuesday is how much money might trickle away in the pursuit of doing good.
“There are always arguments for running government more efficiently, but it’s unusual for the administrative costs to be almost equal to the amount of the benefit,” said Paul Guppy, vice president for research at the conservative Washington Policy Center, who notes that each rebate requires $37. “It was a poorly thought-out policy.”
Given the expense, could the City Council just skip them?
To cancel those $20 payments, which are named in the ballot title, would require another citizen ballot measure, Glass Hastings said.
Expenses include processing costs from Wells Fargo, the debit cards themselves, verification of low-income users, enrollment workers, marketing and informational mailings, staffers said.
The $17 figure is a high estimate and could wind up lower, said Christie Parker, representing the city budget office.
However, the costs and benefits won’t be clear until they try.
For instance, Parker estimated 51,000 eligible motorists might enroll — but O’Brien said he’s skeptical, considering that’s three times the number of households that signed up for city utility discounts, which are far greater. To keep a lid on fixed costs, Parker said, the city ordered only 1,000 debit cards for the first month, and will seek more as needed.
A simpler method might be just to lower the price on a car-owner’s bill, but state Department of Licensing computers are too old to adapt, she said.
As for transit fare cards, the $718,000 amounts to one-third of the yearly $2 million voters approved for low-income aid — but the overhead is likely to shrink after the first year. The city’s launch plan includes $500,000 to publicize the reduced fares, including ads in radio broadcasts and ethnic media; some $161,000 for outreach and enrollment staff; and $31,500 to distribute preloaded, $6 fare cards as a way to get customers started.
O’Brien said later Tuesday his instincts are to spend more money at social-service sites and less on advertising. Metro spokeswoman Rochelle Ogershok said, “We have been talking with the city for months about how they can improve or accelerate ORCA LIFT awareness with those designated revenues.”
Previously, King County has guessed that somewhere between 45,000 and 100,000 people might enroll with ORCA LIFT.
Residents soon will see what Glass Hastings called “a drumbeat of improved transit.”
More buses are coming in June and then in September, along with transit lanes in South Lake Union, light-rail extension next year from downtown to the University of Washington, and a $930 million Move Seattle ballot measure that offers a Madison Street bus-rapid-transit corridor, among other projects.