Voters Face Decision on Two Statewide Initiatives This Fall
2002-13
Voters will be passing judgment on two statewide ballot initiatives this November, and it is important that people of Washington have the necessary information to make informed decisions. This short guide explains these two initiatives and how they will affect you and your family. Also on the ballot are Referendum 51, which will be discussed in a future Washington Policy Center paper, and Referendum 53, regarding the state's unemployment insurance program.
The first measure is Initiative 776, which seeks to lower vehicle licensing taxes to $30 a year. The second is Initiative 790, which would change the way pension programs for firefighters and police officers are managed.
Ballot Wording
"This measure would require license tab fees to be $30 per year for motor vehicles, including light trucks. Certain local-option vehicle excise taxes and fees used for roads and transit would be repealed."
Summary
Initiative 776 makes two major changes in the vehicle licensing tax the state charges to get yearly car tabs. The first of these is eliminating what is left of the motor vehicle excise tax above $30. In 2000, when state legislators lowered the statewide tax to $30, shortly after the passage of Initiative 695, they left a provision in the law that allows municipalities to impose an additional $15 tax on car tabs. Before 2000, this local $15 tax had been deducted from the state tax, so in effect, the taxes each person paid remained the same in all counties, but in some counties part of the tax was redirected to local governments. When the legislature lowed the statewide tax, the local tax was not repealed. This means people in the affected counties are still being taxed the extra $15.
The second major change this initiative would make is to eliminate Regional Transit Authorities (RTAs). An RTA is an agency approved by the voters in a defined area to collect additional taxes for the purpose of providing high capacity transportation service. Initiative 776 would eliminate taxes that fund RTAs and repeal the provision in state law
that allows voters to create new RTAs.
Impact
If voted into law, Initiative 776 would decrease taxes for citizens in some counties and prevent other counties from imposing new car tab taxes. Right now, only four counties are collecting the local redirection tax: Douglas, King, Pierce, and Snohomish. Initiative 776 would repeal this part of the law, reducing the car tax by $15 for people living in those four counties, and preventing any other county from implementing a similar tax.
Currently, only one RTA exists in the state. Residents in parts of three counties, King, Pierce and Snohomish, voted in 1996 to create Sound Transit, and authorized it to impose additional taxes. The amount of the RTA tax is determined by the value of the vehicle being licensed or renewed. A car's taxable value is based not on the true market price, but on the Manufacturer's Suggested Retail Price (MSRP) and the number of years the vehicle has been in use. To figure out how much you pay in RTA tax if you live in one of the affected counties, you can use a calculator provided by the Department of Licensing and available on the internet at: https://wws2.wa.gov/dol/rtacalc/
Initiative 776 would end much of the funding for Sound Transit, which would most likely result in the elimination of the agency. It would also end the ability of voters in other parts of the state to create new RTAs.
Ballot Wording
"This measure would place management of the law enforcement officers' and firefighters' retirement system under a board of trustees consisting of six plan participants, three employer representatives, and two legislators."
Summary
Initiative 790 seeks to change the way the public pensions of firefighters and police are managed. It creates an eleven-member board of trustees, comprised of three police officers, three firefighters, three local government representatives and two state legislators. The members of the board would be appointed by the Governor and legislative leaders in both houses of the state legislature. This board would manage the pension program, which is now overseen by a legislative joint committee. The Initiative also sets the contribution ratio of employees, local governments, and the state to the pension fund. Employees (firefighters and police) would contribute 50% of the total fund. Local governments would pay in 30%, and the state would contribute the remaining 20%. These are the ratio under which the fund operates now. The initiative also caps the dollar amount paid into the fund by the state, local government and employees at 10%, 6%, and 4% of the employees' payrolls, respectively. In addition, this initiative would allow the board to increase the benefits paid by the pension fund. These increases must be approved by an actuary, who is employed by the board, and can be rejected by the state legislature.
Impact
Initiative 790 will not directly affect most residents of Washington. There are no new taxes being proposed, and it does not directly implement an increase in benefits. The main purpose of the initiative is to allow firefighters and law enforcement officers to have majority representation on the board that controls their pensions. Forty-six other states provide for employee representation on pension governing boards, although pension beneficiaries do not always hold majority control, as they would under Initiative 790.
This Initiative would also give local governments representation on the board, something they do not have now. The Initiative would not change the current pay-in ratios. In the future, the board could increase the amount taxpayers pay into the pension fund, subject to a cost analysis by the board's actuary and if the legislature does not vote within 90 days to block the proposed increase.
The complete text of both these important initiatives is available from the Secretary of State's office in Olympia, and on the Internet at: www.secstate.wa.gov/elections/initiatives/people.aspx
About the Author
Karen Mooney is a Research Assistant participating in the Center's internship program.