With passage of Initiative 976, local cities must address ‘significant loss’ of transportation revenue

Rendering of the planned Main Street Revitalization Project, one of the projects that will be impacted by passage of Initiative 976.

Officials in the cities of Edmonds, Lynnwood and Mountlake Terrace agree that Initiative 976, the “$30 car tab” measure being approved by the majority of the state’s voters, will have a significant negative impact on local transportation projects.

The measure repeals the current law giving cities the authority to establish transportation benefit districts (TBDs) to impose a car tab fee, with the money designated for transportation improvements. Edmonds and Mountlake Terrace receive $20 for each car tab fee. Lynnwood, meanwhile, receives $40. They are among 62 TBDs statewide receiving revenue from vehicle license fees.

The initiative, sponsored by Tim Eyman, tapped into simmering taxpayer resentment over Sound Transit’s formula that overvalues vehicles when determining car-tab fees. As our online news partner The Seattle Times has reported, despite several years of debate in the state Capitol, Washington state lawmakers haven’t agreed on a bill to change the formula. I-976 requires vehicle value to be determined based on the Kelley Blue Book.

Now, as passage of I-976 appears imminent, local cities are faced with how to address gaping holes in their respective budgets.

“We are looking hard at what the city can and should do to adjust to this very significant loss of revenue,” said City of Edmonds Public Works Director Phil Williams.

In Edmonds, I-976 would reduce revenues to the street budget by approximately 37% — $697,000 out of a total revenue base of $1,894,000 for 2020, Williams said. “This money was to be spent on maintaining and operating the city’s street system, including pavement preservation tasks like crack sealing, pothole repair, and repairing smaller sections of failed pavement. It also pays the power bills for, and does all the maintenance on, our traffic signals, pedestrian crossing lights and street lights.”

In addition, that street budget funds the following:

– sidewalk maintenance and replacement, plus building new sidewalks where needed.

– vegetation management to maintain sight lines for vehicles and pedestrians.

– placing, replacing and maintaining signage, including speed limits, stop signs, parking restrictions, school zones, and crosswalks.

– painting of fog lines, centerlines and parking spaces, as well as raised pavement markers.

– the city’s portion of responding to weather events, including snow and ice control, tree and limb removal after windstorms, and normal maintenance of trees and other vegetation located in city right-of-way.

“These things are all very basic operation and maintenance tasks that 1) all citizens expect and benefit from, 2) are related to the safety of our citizens of all ages and abilities, and 3) are not really seen as ‘want to haves’ but rather an important part of the basic package of services that define a safe urban environment,” Williams said. “If we provided citizens with a list of all these services along with their costs and asked them to cross off 37% of these work tasks, which ones would they choose or how else might they suggest we pay for them? Hopefully it won’t come to that kind of Hobson’s choice and we will be able to put together a sensible plan.”

The good news, Williams said, is that so far Edmonds voters are rejecting the initiative, with latest returns showing 56% against and 44% in favor.

“This could create an opportunity to approach our citizens (at the appropriate time) and ask them to reinstate the local license fee or one of the other options available in the Transportation Benefit District authorizing statutes that are not invalidated by I-976,” he said. “There may be other good ideas out there as well and we will need to start a conversation with our citizens to get further guidance on how they will want to proceed in the coming weeks and months.”

Voter support of Initiative 976 was a different story in the city of Lynnwood, where the measure was receiving approval of 58.5% of voters.

“We are disappointed to see the passage of I-976 in that it affects our ability to keep up with the needs of our aging transportation infrastructure,” said City of Lynnwood Public Works Director Bill Frantz. The initiative will strip approximately one-third of the city’s Transportation Benefit District funding, which goes toward the city’s transportation infrastructure program, he added.

“The local car tab fees bring in approximately $1.1 million dollars per year, which helped fund our pavement program, sidewalk enhancements and several other critical transportation improvements,” Frantz said. On Nov. 20, the city’s Transportation Benefit District Board – which is comprised of Lynnwood City Councilmembers – is scheduled to review the city’s plan for a 2020 balanced budget that includes already-planned cuts to the city’s paving program for next year.

“The TBD Board will need to determine if they want to in fact cut funding for transportation improvements or reallocate funds already designated for another city service, Frantz said. “Unfortunately, our local community members will experience impacts if we are not able to keep up with proper road maintenance.”

In Mountlake Terrace, meanwhile, latest returns show 55% of voters rejecting the initiative. Mountlake Terrace City Manager Scott Hugill said the Mountlake Terrace City Council established its Transportation Benefit District and $20 license tab fee program in 2011, and it generates about $330,000 annually for the city.

In adopting the TBD, the city’s goal was to provide a funding source for three key programs: the Main Street Revitalization Project, meeting requirements of the state’s Growth Management Act, and the city’s pavement management program, which was resurrected after being suspended during the recession.

The Main Street Project includes a range of street and utility improvements along 56th Avenue, and 232nd and 234th Streets, as well as along 236th Street from 56th Avenue to the Transit Station. According to Hugill, the city needs funds to provide a local “match” required by state and federal transportation grants for Main Street construction. “Without enough local matching funds, the city’s applications for grant funding are not scored as high, meaning we are less likely to get the grants for projects such as Main Street,” Hugill said.

Atworth Commons under construction. (MLTnews file photo)

Under Washington’s Growth Management Act, cities in the region are required to accommodate population and job growth, which was part of the rationale for the changes in Town Center zoning over the past 12 years. “To accommodate this growth, some cities (including Mountlake Terrace) collect traffic impact fees from new development to help fund the improvements required by the development, Hugill said.  However, new development can be charged only for the traffic impacts associated with the development itself — the city has to come up with the balance of funds to complete the associated traffic project,” Hugill explained. “If the city does not have the funds available to complete a development-related road project within 10 years, the impact fees must be returned,” he said. “The $20 license fee helps to pay for the community’s share of improvements when coupled with impact fees.”

As an example, Hugill pointed to the intersection of 58th Avenue West and 220th Street Southwest, where Atworth Commons and the Brighton School projects both paid traffic impact fees — which can be used to add signals the intersection. “But a signalized intersection is in the neighborhood of $1 million. and the city could not collect all of that from the two projects,” Hugill said. “The license tab fee would be the city’s share to fund the balance of the project.”

“Under I-976, these projects will have to be delayed,” Hugill said. “If the city does not have the funds to match a grant, we cannot accept the grant, and the associated project will not be completed until adequate funds are available. The same is true with traffic impact fees: If the city is unable to fund the balance of a transportation project within 10 years of collecting the impact fees, the impact fees must be returned.”

— By Teresa Wippel


  1. I’d be more than happy to write a check to cover the $20.00 loss from my tabs to help my town recover the loss. To me that would be a satifactory solution to the I’ll feelings I have over Seattle Transit Authority’s deceitful use of the MVET for determining car values.

Leave a Reply

Your email address will not be published. Required fields are marked *

Real first and last names — as well as city of residence — are required for all commenters.
This is so we can verify your identity before approving your comment.

By commenting here you agree to abide by our Code of Conduct. Please read our code at the bottom of this page before commenting.