Seattle City Council approves new car-tab fee. Here’s how much you’ll pay.

About a month after the Washington Supreme Court tossed out car-tab-cutting Initiative 976, Seattle cemented plans to charge a new $20 vehicle license fee.

The fee, set to take effect next summer, will be in addition to a current $20 charge for basic projects like pothole repair through the city’s Transportation Benefit District. A separate $60 fee for bus service will expire at the end of this year.

That means Seattle vehicle owners will see city vehicle license fees drop from $80 today to $20 at the end of this year and then to $40 when the new fee takes effect.

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To fund bus service and subsidized transit passes, the city also collects a .1% sales tax. City voters this month approved an increase in that tax to .15%.

The council approved the car-tab fee Monday with an 8-1 vote as part of their 2021 budget process. A fight over how to spend the new money remains ahead.

Debate over the fee has drawn new attention to the city’s need to direct more money to maintaining its aging bridges, but also to tension around whether to spend more on bridges or on other projects focused on walkers, cyclists and transit users.

A recent city audit report found Seattle should be spending at minimum $34 million a year on bridge maintenance, compared to its current $6.6 million. The $20 fee will raise a small fraction of that: $3.6 million next year and $7.2 million annually in future years.

After several council members pitched the fee as a way to help fund bridge maintenance, a majority of council members voted instead to send the idea to a “stakeholder engagement process” involving unions and transit organizations before approving a spending plan next spring.

Councilmember Lisa Herbold, who said the money should pay for bridge maintenance, cast the lone no vote Monday.

“It’s up to the council and the mayor to make tough decisions on how to implement recommendations of the city auditor,” rather than send the decision to a stakeholder group, Herbold said. 

Councilmember Alex Pedersen, who also backed bridge maintenance, supported the fee. “We want to get the clock started on collecting this revenue because I know we can put it to a good use,” he said. 

Councilmember Kshama Sawant voted yes for the fee but said car tabs are “punishing” to people with low incomes and the council should boost taxes on large businesses instead.

If Mayor Jenny Durkan signs the legislation, it would take effect by July 1. Durkan last week declined to say whether she believes the new fee should fund bridge maintenance, saying only the city should take a “holistic” look at its funds and needs.

The Seattle fee isn’t the only charge you see when you renew your vehicle’s car tabs each year. Seattle residents also pay state vehicle license fees for various transportation needs and pay fees to Sound Transit to build new light rail.

Sound Transit’s fees, based on the value of the vehicle, drive the bulk of the charges and controversy over car tabs.