King County Proposition 1’s regressive tax increases may fund stalled union contract

April 16, 2014

King County Metro Transit officials may use new revenue from regressive sales and car taxes enacted under April 22nd’s Proposition 1 to provide money to speed negotiations over a stalled three-year union contract.

According to news reports, talks between Metro managers and representatives of the Amalgamated Transit Union Local 587 (ATU) broke down in December.  Metro offered a contract that held pay steady the first year and provided guaranteed pay increases of 2% annually in each of the second and third years.

Union executives submitted the proposed contract to their members who, similar to Boeing machinists, voted the proposal down as not generous enough.  Unlike the Boeing dispute, however, no second contract was considered for a vote, and Metro drivers have been working without a contract ever since.

King County officials say Metro Transit workers need to defer a cost of living increase for financial reasons.  Passage of Proposition 1 would change that.  Proposition 1 would increase the county sales tax by 0.1%, bringing the tax rate to nearly 10% in most communities, and impose a $60 annual fee on every vehicle.  The measure’s regressive tax increases would provide the new funding union executives and Metro managers have been waiting for.

King County’s plans for Proposition 1 were unveiled just weeks after the ATU union members voted down Metro’s latest contract offer.  New tax money would allow Metro managers to offer the union more generous terms, likely breaking the impasse.

If Proposition 1 does not pass, Metro officials would likely offer to increase employee pay anyway, due to the improving economy and better-than-expected sales tax revenues.  Metro is receiving a windfall of $32 million more in 2014 than expected, and County budget analysts say the transit agency will receive record-breaking levels of revenue in future years, without Proposition 1’s tax increases.

Metro’s rising level of sales tax revenue, based on current tax rates, is shown below.