Initiative 695 One Year Later: The Sky Didn't Fall

Jan 1, 2001

A little more than one year ago, the people of Washington overwhelmingly approved Tim Eyman’s Initiative 695, the “$30 License Tab Initiative.” At a stroke the voters repealed the Motor Vehicle Excise Tax (MVET) and replaced it with a flat $30 annual fee on private cars and trucks.

Shortly after passage, the measure came under court challenge. In order to insure that $30 license tabs went into effect as the voters wished, the legislature passed, and the governor signed, a bill to enact Initiative 695’s main tax-cutting provision. Other provisions, such as the requirement that future fee and tax increases must be voter-approved, were later struck down in court.

During the political campaign against Initiative 695, opponents made a number of specific predictions, all of them dire, of what would befall the state if the measure became law. They said funding would be lost for up to 1,000 police officers, funding for basic county health services would end on January 1, 2000, child immunizations, flu shots, daycare and restaurant inspections would all be cut, there would be no new highway projects, cars would be taxed like homes, the budget reserve would be spent, 70,000 transportation jobs would disappear, school safety would be jeopardized, big companies like Boeing and Microsoft would move operations out of state, we would have a state income tax, and so on.

Taken together these claims appeared so overblown that they amounted to a concerted effort to frighten people into voting against Initiative 695. Once their attempt had failed, opponents may be forgiven for hoping that their gloom-and-doom forecasts would be quickly forgotten.

A year later, however, we are in a position to coolly assess the actual outcome of Initiative 695. We see that the sky did not fall. Events have amply demonstrated that the state and local governments have adjusted well to the revenue reduction required by repeal of the MVET. Government agencies have adapted through a combination of increased efficiency, reordered budget priorities, program savings and alternative revenue sources. Vital government services have not been disrupted. On the whole these programs have continued as before, and in many cases have been improved and expanded, since Initiative 695 passed. Nor has the measure seriously crimped public revenues, since overall spending by the state, counties and cities continues to rise.

This Policy Brief examines the accusations opponents raised against Initiative 695 and reports on how these predictions have fared over the last year. Our research finds that in specific, measurable ways the severe cuts in government programs forecast by Initiative 695’s opponents have failed to materialize.

Read the full Policy Brief here

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