As anger mounted over car-tab taxes in recent years, a repeated and seemingly simple demand has come up again and again. To calculate pricey Sound Transit car-tab taxes, why not use the Kelley Blue Book — a common way of determining a used car’s value — instead of the controversial formula on the books today that overvalues many vehicles?
So, when longtime initiative promoter Tim Eyman crafted Initiative 976 to cut car tabs, he tapped into that sentiment. Along with cuts to car-tab taxes, I-976 would require the use of Kelley Blue Book for calculating car-tab taxes.
A King County judge rejected that idea Thursday, saying it would violate the state constitution. The judge also opted to keep the rest of I-976 on hold for at least two more weeks, although he had previously upheld most of it as constitutional.
Initiative 976 would lower some state vehicle-registration fees, strip local governments’ authority to impose their own car-tab fees and attempt to repeal or reduce Sound Transit taxes (the agency disputes how the measure’s effects would play out and continues to collect car-tab taxes). Car-tab fees today fund road and transit projects across Washington.
Voters statewide approved the initiative in November. It has been tied up in legal challenges since and has not taken effect.
If I-976 ultimately takes effect, drivers will wonder whether they’re owed refunds for the car-tab taxes they’ve been paying. The Washington State Department of Licensing has said it will determine a refund process if a court orders it to do so.
King County Superior Court Judge Marshall Ferguson Thursday ordered the two sections of I-976 that would have required the state to calculate car-tab taxes based on Kelley Blue Book severed from the initiative.
Ferguson offered no details about his decision on the Kelley Blue Book question. King County and others argued the requirement would illegally force the state to enter a single-source contract with a particular company.
The rest of the far-reaching initiative is still in play, but delayed.
Last year, Ferguson issued an injunction to block I-976 from taking effect while legal arguments played out. Last month, he upheld most of I-976 but kept the injunction in place.
On Thursday, he vacated the injunction, meaning I-976 could take effect. But at the same time, he suspended that portion of his order until March 27, when another hearing is scheduled. Seattle and other opponents are likely to continue arguing before his court, and possibly a higher appeals court, that I-976 should stay blocked.
Although he has upheld most of I-976, Ferguson placed a special asterisk on the city of Burien.
That city planned to use money from a $10 vehicle license fee, which would be wiped out by the initiative, to pay back bonds. By repealing cities’ authority to implement those fees, the measure illegally impaired Burien’s bond contracts, opponents argued.
In his order Thursday, Ferguson wrote that Burien has a “well-grounded fear” its bond contracts would be illegally impaired by I-976. For that reason, he will keep the initiative blocked as it applies to Burien for now.
State Attorney General Bob Ferguson, whose office is defending the initiative, said in a statement the state would continue to argue “to lift the injunction so the initiative goes into effect as voters intended on March 27.” The state will appeal the Kelley Book Book issue, the attorney general said.
The Seattle City Attorney’s Office, which is challenging the initiative, said in a statement the city believes that mentioning Kelley Blue Book in the ballot title renders the entire initiative unconstitutional.