Initiative to cut car-tab taxes would cost billions in transportation funding, state says

The Main Street Revitalization Project currently underway in Mountlake Terrace is an example of a local project funded through car-tab fees that would be prohibited under Initiative 976.

A fall ballot measure to cut car-tab costs across Washington state would blow a $4 billion hole in local and state transportation funding over the next six years, a new report says. That’s according to this story from our online news partner The Seattle Times.

Local governments could lose about $2.3 billion and the state could lose about $1.9 billion over the next six years if Initiative 976 is passed, according to the fiscal impact statement released by the state Office of Financial Management this week.

The report notes that local governments in particular would be impacted by the initiative’s prohibition on car-tab fees to fund local road projects. Edmonds, Lynnwood and Mountlake Terrace all assess these fees via their respective Transportation Benefit Districts, which were authorized by state law for the purpose of transportation improvements. Edmonds and Mountlake Terrace receive $20 for each car tab fee. Lynnwood, meanwhile, receives $40.

The initiative would also deliver a major blow to Sound Transit, The Times article said. The measure would cut the car-tab tax rate Sound Transit can charge and require vehicle value to be determined based on the Kelley Blue Book.

Eyman and others have criticized Sound Transit over its use of a formula that overvalues vehicles when determining car-tab fees, The Times said. Despite several years of debate in the state Capitol, lawmakers haven’t agreed on a bill to change the formula.


  1. The initiative save the tax payers lots of money.We pay far higher feed than many states. Local and state government tax us to the max ! Our license tab fees are stupidly expensive. Time for all our local politicians to be replaced.

    1. Local politicians vote to add taxes to the car tabs. In Lynnwood it was approved by the local councilmembers to add $40 to each vehicle registered in Lynnwood every single year.

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