Less than a week after the Washington Supreme Court struck down an initiative limiting car-tab taxes, Seattle City Council members might consider new vehicle fees to help address looming budget shortfalls.
Councilmember Andrew Lewis on Tuesday said the council should discuss going back to voters to renew a $60 car-tab fee that funds bus service and expires at the end of this year.
Councilmember Alex Pedersen mentioned the fees as one possible way to pay for maintenance on the city’s aging bridges.
Seattle politicians may be more confident than others. Unlike voters statewide, voters here rejected Initiative 976, the Tim Eyman-sponsored measure to cut car-tab taxes.
In 2014, city voters approved the $60 fee and a .1% sales tax for bus service. This fall, voters will decide whether to renew that sales tax at .15%. The city left a new car-tab fee off the ballot this year because of uncertainty about I-976.
In addition to the $60 fee expiring this year, Seattle residents pay a $20 city car-tab fee to fund pothole repair and basic projects. Under state law, the City Council could double that $20 fee without voter approval. (Two years after that, the city could increase the fee to $50.)
City Hall also could ask voters to approve a higher fee.
Council members have not proposed a formal plan for increasing the tax.
Pedersen, who last week said he would “lean toward” a new city fee, mentioned the possibility Tuesday as he pitched his colleagues on boosting bridge maintenance.
Pedersen said that money “could come from multiple sources.” The city is still waiting for an updated revenue forecast and “we still have to talk about the vehicle license fee issue,” Pedersen said.
Lewis asked about the logistics of going back to voters to renew the $60 fee.
“We made the really difficult decision of increasing an incredibly regressive sales tax to offset the horrible hit” from I-976, Lewis said. “Now that that’s gone, I’d like us to at the very least discuss a potential path … on going back to the voters.”
If the city increased that fee this year and voters approved the sales tax on the ballot, city fees would go from today’s .1% sales tax and $80 car-tab charge to .15% sales tax and a $40 car-tab fee. (Seattle vehicle owners pay other car-tab fees to the state and Sound Transit.)
Mayor Jenny Durkan’s office said it couldn’t comment without more details. Durkan “is focused on meeting the historic budget challenges facing the city and has no proposal [to increase the fee] at this time,” spokesperson Chelsea Kellogg said.
Council members on Tuesday also questioned Durkan’s plan to cut $60 million from the Seattle Department of Transportation (SDOT) budget.
SDOT expects an 18% drop in revenues, assuming no funding from this fall’s sales-tax measure. The budget would remove funding for 33 SDOT positions, requiring nine layoffs.
Without city funding to match property taxes, the Move Seattle Levy would face new trouble delivering promised sidewalks, repaving and other projects. Money once expected to come this year from a tax on Uber and Lyft vanished as people stayed home during the pandemic.
Durkan’s budget would delay road changes on 23rd Avenue near Miller Park, sidewalks near Longfellow Creek near Delridge, a $10 million city contribution to a new light rail station at Graham Street and other projects.
Council members want to restore some work, but they still need to identify where money would come from.
Councilmember Lisa Herbold proposed restoring money for improved sidewalks, signals and crossings on Fauntleroy Boulevard. Councilmembers Dan Strauss and Lewis will try to bring back a $777,000 redesign of Thomas Street between Seattle Center and South Lake Union.
Councilmember Tammy Morales said the city should go ahead with sidewalk improvements along Rainier Avenue, even though King County Metro delayed its plans to build a RapidRide line there.
“That still needs to happen to serve those who rely on that road,” Morales said.
Councilmember Kshama Sawant decried the cuts and proposed increasing a payroll tax on large businesses to direct $117 million to SDOT. “There is nothing inevitable about these cuts. They are a policy decision,” Sawant said.
Kellogg said the mayor “proposed a balanced budget” given revenue losses.
“While we would absolutely prefer not to have to proposed a budget that contemplates any impacts to projects or staff, it was unfortunately not the budget reality,” Kellogg said.
Streetcar service would be scaled back by about 10%, as it has been since the novel coronavirus hit. The planned downtown streetcar remains unfunded.
Pedersen floated the possibility of more cuts to streetcar service to save money. Council President M. Lorena González worried about “setting [the system] up for future failure” and making it harder to restore service when the economy improves.