Today the state Supreme Court held that Initiative 976 is unconstitutional because it “contains more than one subject, and its subject is not accurately expressed in its title.”

I-976 was approved by voters last year. It would have limited vehicle license fees to $30, revoked the authority of transportation benefit districts to impose vehicle fees, repealed the state motor vehicle sales tax, revoked Sound Transit’s authority to impose a motor vehicle excise tax (if possible under its bond terms), and specified that any motor vehicle excise tax must be calculated based on the vehicle’s Kelley Blue Book value.

Specifically, the Court held that the subject of I-976 is “limiting vehicle taxes and fees.” It found that the section of the initiative that required Sound Transit to retire bonds is an unconstitutional second subject. Because of this determination, the opinion does “not reach whether the other challenged provisions of I-976 create unconstitutional separate subjects.”

The Court also held that the initiative is unconstitutional because its ballot title was inaccurate:

The average informed lay voter would not think that “[t]his measure would . . . limit annual motor-vehicle-license fees to $30, except voter-approved charges” would mean charges previously approved by voters would be eliminated. . . . Similarly, the average informed lay voter would not think the initiative eliminates the statutory mechanism for voters to approve charges in the future.

(In a concurring opinion, Justice Madsen agreed that the measure is unconstitutional due to multiple subjects but disagreed that the ballot title was unconstitutionally misleading.)

As I wrote a few weeks ago, the September transportation revenue forecast included an alternative forecast that showed what state transportation revenues would be in the absence of I-976. Without I-976, the Transportation Revenue Forecast Council estimates that 2019–21 state transportation revenues will be $6.152 billion, down from $6.419 billion in 2017–19. (If the Court had upheld the initiative, state transportation revenues for 2019–21 were estimated to be $5.719 billion.)

This will also impact local transportation revenues. The fiscal impact statement for I-976 had estimated that over six years it would reduce state revenues by $1.923 billion and local revenues by $2.317 billion.

The Seattle Times reports that after passage of I-976,

. . . Sound Transit kept collecting its car-tab taxes to pay off bonds, arguing I-976 didn’t set a deadline for the agency to pay off debt.

After I-976 passed, the state set aside its portion of car-tab tax money in case the measure was upheld, according to Gov. Jay Inslee’s office. Seattle “continued collecting, but did not spend” its car-tab revenue, said Dawn Schellenberg, spokesperson for the Seattle Department of Transportation.

In February, a King County Superior Court judge largely upheld I-976, but kept the measure on hold until the high court ruled. The state Supreme Court heard arguments in June. Throughout, car-tab fees have remained in place for vehicle owners.