Drivers eagerly anticipating a break on their car tabs will have to keep waiting.
Initiative 976, the voter-approved measure to slash car-tab taxes, is on hold after a judge’s ruling Wednesday. That means vehicle owners across Washington will be expected to pay existing higher fees for now. State tax collectors, meanwhile, will set aside some of those fees in case they later have to issue refunds.
The decision is just the start of what promises to be a lengthy legal battle, the third such fight over a car-tab measure in two decades. The fight could also further scramble the upcoming state legislative session, where lawmakers will have to reconsider state transportation spending and some Republicans are already demanding legislators enact the tax cut regardless of legal challenges.
Voters across Washington this month approved I-976, which attempted to lower many vehicle registration fees to $30, roll back car-tab taxes that fund Sound Transit and do away with local car-tab fees. Much of the measure was set to take effect Dec. 5.
Car-tab taxes are used by state and local governments to fund transportation projects, including roads, transit and ferries.
Soon after the election, Seattle, King County, the Garfield County Transportation Authority and a handful of other groups sued and sought a halt to the initiative.
King County Superior Court Judge Marshall Ferguson sided with the groups Wednesday, temporarily blocking the initiative but not yet ruling on the initiative itself.
The Washington State Attorney General’s Office, which is defending the measure, said Wednesday it would file an emergency appeal of the judge’s decision and attempt to get the case before the state Supreme Court before Dec. 5.
The judge’s decision drew outrage from anti-tax activist Tim Eyman, who sponsored the measure and claims the lawsuit is a “slap in the face” to voters. Seattle Mayor Jenny Durkan hailed the order, which she said spared local residents the pain of bus-service cuts.
In Olympia, state lawmakers said they would move ahead as if the measure was taking effect despite the ruling. If the initiative takes effect, it is expected to cut about $478 million in state transportation revenues over the next two years.
Washington Gov. Jay Inslee said state car-tab tax revenues collected while the case is playing out will be “held separately and set aside to function as an escrow account” to be available later as refunds to drivers if the initiative is upheld.
Under instructions from Inslee, the Washington State Department of Transportation has put dozens of roads and transit projects that are not yet underway on hold while lawmakers adjust state budgets.
In the order Wednesday, Judge Ferguson said the groups challenging the initiative had shown they were likely to prevail on part of their constitutional challenge, in which they argue the ballot title language voters saw for Initiative 976 was misleading and contradicted language in the initiative itself.
That title language, written by the AG’s office, said I-976 would repeal, reduce or remove authority for certain vehicle taxes and limit annual car-tab fees to $30 “except voter-approved charges.”
In fact, the initiative itself said that only charges approved by voters after the measure took effect were exempted. The measure would also repeal cities’ authority to charge local car-tab taxes regardless of whether they are voter-approved.
“In other words, all existing voter approved charges are apparently extinguished by I-976, even though the ballot title suggests that all voter approved charges, past or future, survive I-976,” the judge wrote.
The order is not the final word on whether the title was misleading, but an indication that the groups might win on that issue. The order notes that it is not “a foregone conclusion” that the judge will strike down the initiative on those grounds.
The state has countered that an initiative’s title can be general as long as it alerts voters to the topics included in the measure so they can look deeper.
In the near term, allowing I-976 to take effect would result in “actual and substantial injury” to Seattle and others, the judge found. If the measure was allowed to take effect but later struck down, it would be essentially impossible to collect the car-tab taxes that went unpaid during that time, the judge wrote. The case could stretch on for “potentially years,” he wrote.
Eyman called the ballot title “1,000% accurate.” It is “maddening” for the initiative to win and then “to somehow be told that because the Attorney General wrote a ballot title that the judge says might have confused somebody — that level of speculation is just so maddening to an average voter,” Eyman said.
Eyman has doubted the state’s defense of the initiative. He confronted lawyers for the Attorney General’s Office after the proceedings Tuesday, arguing they failed to vigorously defend the measure.
The same office is pursuing a lengthy campaign-finance lawsuit against Eyman in which he faces a potential lifetime ban on managing or directing the finances of a political committee. Eyman argues the office should recuse itself from defending his initiative and attempt to have the case heard in another county since King County is a party to the lawsuit.
In a statement Wednesday, Attorney General Bob Ferguson said his office would “continue working to defend the will of the voters.”
Eyman is now urging drivers to engage in “civil disobedience” by not paying their car tabs and says he won’t renew his own tabs.
“If you do get pulled over,” Eyman said after the court hearing Tuesday, “you say ‘Absolutely I didn’t renew my tabs. This is our Boston Tea Party, man.’”
Driving with expired tabs carries a penalty of $139 to $231, depending on how long they’ve been expired, said Washington State Patrol spokesman Sgt. Darren Wright. Law enforcement officers can issue warnings but it’s up to their discretion, Wright said.
Department of Licensing spokeswoman Christine Anthony said the department has received some calls from drivers about refusing to renew their tabs.
“We advise people to comply with the law and pay the fees,” she said.