Letter: Edmonds car tax a burden to those already struggling

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I am proud to be the only member of the Edmonds Citizens’ Transportation Committee to oppose the TBD vehicle fee increase. While I hope we can look for ways to increase transportation revenue, such as REET redistribution, I will not support increased revenue at any cost.

This fee is yet another affront to working families. By nearly every methodology, Washington is the most regressively taxed state in the nation, with the lowest 20 percent paying 17-18 percent of their income in state and local taxes, and the richest 1 percent paying around 3 percent.  Additionally, Edmonds has among the highest utility fee and tax rates, TBD vehicle fees, and sales tax in the state – each one of these affects families.

This $40-per-vehicle tax is applied to every Edmonds citizen evenly, without any exemptions, without any regard to the value of the car – whether homeowner or renter, employed or unemployed.  Thus it burdens younger, lower-income families more than those better able to pay.

Proponents of the fee condescendingly say this is “only” $40, only a “cup of coffee at Starbucks” per month. This not only treats this as an isolated fee, independent of other taxes, but it ignores that those who are struggling in these economic times have probably already cut Starbucks (or their local coffee shop) out of their budget.

Remember that this is $40 on top of the existing $20 TBD fee, in addition to a minimum $43.75 annual state fee, a 0.3-percent annual RTA tax, and a biennial $15 emissions test (in addition to non-car taxes). This $40 increase puts my car’s total fees for 2011 just under $200.  For a family that spends nearly 100 percent of its income on things like food, housing, clothing and a car (or two) to go to work – $200 means purchasing processed food, using the lights less often, cutting dental insurance, or passing up purchasing new clothes for the year (things I have done this year myself).

An additional $40 tax may not be much for a homeowner on Olympic View Drive, but it sure adds up for those of us without a view of the mountains.

Let’s address the important issue of transportation funding without adding to the burden of working families – especially in these economic times.

Let’s stand for families and say no to Proposition 1.

Stohn Nishino
Edmonds

16 COMMENTS

  1. Concur with your assessment of our tax structure. We are in a situation, constructed by our own short sightedness, that prevents us from implementing a more fair solution.

    Since we implemented the Transportation Benefits District, we have had thesecurity of knowing that our vehicle fees and other monies intended for transportation could not be diveted for other purposes. This is s good thing. But, the TBD rules also restrict the kinds of taxes that can be used to fund further street improvements, like the ones that are on the ballot.

    You made no mention of the improvements in question, many of which might be beneficial in bringing in more new families to Edmonds by making our neighborhoods safer and more walkable. Those of us who want some, or all, of the improvements, but agree with you about the inappropriateness of the tax structure here, have been painted into a corner.

    There is a bigger question. How do we loosen the restrictions on TBD revenue sources so that we can ADD money from sources, other than the user fee approach being used presently? That is the only way we will evere be able to fund road improvements that do not unfairly burden lower income households.

  2. Excellent letter, Stohn, and I salute you for trying to put this proposed tax hike in context. It is indeed “condescending” to dismiss the fee as “only” $40. $40 is a week’s groceries for many seniors or hard-working regular people. Now is not the time to impose yet another regressive tax.

    There was another letter run by My Edmonds News from a fan of this tax hike who said he liked it even though it would hit him particularly hard, as he owns five cars. Anyone with five cars in his driveway is unlikely to look at $40 the way a Social Security recipient, a minimum-wage worker or a family with an unemployed wageearner looks at $40.

    I still have not heard anyone characterize the road improvement projects at stake here as critical or must-haves. So far it appears to be a bloated wish list of elective improvements — like the suspect omnibus spending bills passed late at night by the US Congress. Let’s at least hear a line-by-line defense of these projects from city government, and why they’re more important than a sack of groceries for a fixed-income senior, or a Friday night meal at Claire’s for a hard-working family.

    As you point out, when taxes are raised, those revenues don’t magically materialize; they’re diverted from other destinations. Let’s see the city council explain to Edmonds merchants, restauranteurs, dry cleaners, repair shops, etc. why they should see less business because we have to build a million-dollar sidewalk for a handful of people on a lonesome street on the far side of town. Is this the best, smartest use of $65 million right now? Wouldn’t a lot of Edmonds businesspeople prefer to see it run through their cash registers?

  3. Hi Todd,

    You are correct in your assessment — the point of my short letter was not to address every issue, but get at the heart of the problem with this fee at this time.

    I’m not going to delve into your questions, but just point out that there are ways to get more revenue to transportation outside of TBD that would take policy changes by the council, and there are other funding options for TBD, such as a property tax levy, which you can see here:

    http://www.awcnet.org/factsheets/2010/TBDChecklist%202010.pdf

  4. Tom F:
    This suggestion is very well stated:
    “Let’s at least hear a line-by-line defense of these projects from city government, and why they’re more important than a sack of groceries for a fixed-income senior, or a Friday night meal at Claire’s for a hard-working family.”

  5. Having looked at the projects and how they will benefit pedestrians, cyclist, and drivers, I am glad to pay this fair fee.

    Taxing transportation to pay for tranportation is very progressive.

    Opposition leaders have suggested that a general fund levy is needed, but I disagree. General fund levies allow politicians to siphon off the the new revenue to other things. The TBD fee is required by law to go to transportation.

  6. A new light on 3rd, whatever they are going to do on 9th and Main, a roundabout at 5 corners..these projects are not vital for attracting folks to move to Edmonds..a Dick’s Drive In at the old Skippers property would do more..I go thru all of these locations numerous times a day, and have been for over 40 years, and besides a little wait at rush hour/school out..it’s not a big inconvenience or hazard..we need overlays, and I can point out numerous locations in need of sidewalks, especially where the kids are heading back and forth to the various schools..but we could have paid for that by just adding the $20 to the fee without a vote….I wish everyone would quit answering all of our problems with a fee here a tax there..why not take accountability and balance the budget like we did in the old days..tighten purse strings, increase revenue..

  7. The $40 tax is, by definition, a regressive tax; it is not a progressive tax.

    I agree with Dave that the funds are less secure when they are located in the General Fund; they can be used for things other than transportation.

    I agree with Michael about the improvements that aren’t needed – especially the 5 Corners roundabout – and that the requested amount should have only been $20.

    If the $40 is passed by the voters, I believe that the council could commit to collecting only $20 for a number of years before assessing the full $40. Something to consider.

  8. Dave, I’m sorry, but the proposed fee is as regressive as they come. Pegging a sliding fee to the value or age of your car, or miles traveled, or halving the levy for hybrids or four-bangers… those things would be progressive. This isn’t.

    The trouble with favoring each incremental levy on its merits is, it discourages holistic thinking. You generate a longer let’s-do-it list than you can pay for. No household runs like that; households have budgets, and if the roof needs replacing, honey, we’re not buying a Caddy this year. I agree it would be nice to have a roundabout at Five Corners; like Michael, I fervently disagree that it’s needed, or even important. Spend millions of dollars to cut twenty seconds off peoples’ peak-hour transit time through the intersection? At a time like this? Absurd.

    Just as an exercise I’d like to see the city council lop 25% off the proposed project list. Which 8 or 9 of these 34 initiatives could we do without? As I used to tell my kid when he was young… son, if you can’t choose which toy, we’re not buying either of ’em.

    Why is stack-ranking and prioritizing such anathema?

  9. @Tom Farmer: a stacked ranking, with different “packages” of proposed improvements, and how large of a hike in vehicle fees each package would take, was provided in the packet for that TBD meeting. I’m out of town, and don’t have access to my files, but if you go to the City Clerk, or Council Secretary, and ask them for that specific info, they may be able to help.

    Or, have any of you other readers a link to the table showing the various TBD option packages that you can post here?

  10. The letter in opposition was very well thought out and written.
    There is no specificity to the ordinance. The City website states that the TBD voted to place a $40 annual fee on cars….but it is a $40 increase,
    The City’s website language is misleading. The projects are listed, but without any specificity as to the the scope of the projects, how the cost estimates were derived, and why the 37 were placed on the list.
    .

  11. @Todd: The list is not officially ranked — the council decided not to adopt an official “list”, but cover as many projects as possible. It would take an $80 TBD raise to cover all 37 projects. Those are all of the priority projects that the Transportation Plan has identified. The TBD fee will not necessarily be applied in any particular order.

  12. @Diane: There was a long, grueling process that included the Transportation Division, the Transportation Committee, citizen input, and an outside transportation expert to adopt the Transportation Plan. There were a number of factors, considerations, and calculations that went into it. You can see the entire Transportation Plan here:
    http://www.ci.edmonds.wa.us/transportation_element.stm

    You are correct that the City website has not given the reason for adopting the unspecified list as a whole. Councilmembers Wilson, Buckshnis, and Petso all had proposed short lists that the $40 would have covered.

  13. The project prioritzation went through an extensive Public process. You would never get anything done if you wanted to get full approval by everyone. This is a user fee, if you use roads and sidewalks you will pay. No different than traditional gas taxes that are used nearly everywhere. The TBD is generally less of a burden on lower income individuals than the gas tax, since they should likely be driving fewer cars.

    I like Washington’s tax structure, it gives a person on a lower income a chance to have control over their taxes. Rather than a state income tax where you are taxed on your income no matter what. If you spend less you will be taxed less and gain wealth. This formula worked for me after moving from Maryland with its income and sales tax structure. This isn’t a theory, it is an actual example. I know for a fact that this structure can work for lower income individuals. I don’t regret those old days either. I enjoy the memories of being a 1 car family and biking to work.

  14. @ Don F., re: Washington’s tax structure: it is largely to blame for the full-blown chaos we find ourselves in. A sales tax-based system is inherently far more unstable, because during downturns people stop buying stuff well before they lose their jobs.

  15. Don,

    You don’t have to accept that our tax system burdens lower-income folks more — it is a fact and doesn’t change based on whether or not you accept it — every methodology has shown it to be so, see: http://sphotos.ak.fbcdn.net/hphotos-ak-snc4/hs643.snc4/60294_152596398102378_152594118102606_364830_1685668_n.jpg and search any other organization that has done the research.

    I’m glad that biking to work worked for you, but not everyone is in a position to do that– it’s not practical for many people, and you can’t impose this on them without it adversely affecting them.

  16. The discussion of the fee or tax or what ever being regressive is interesting but here are some facts that the Levy Committee in a public meeting has gathered.

    To protect our investment in roads and side walks and right of ways from deteriorating Public Works has spent in the past and estimates in the future that we need between $2.5-$3.0 million per year. For street overlays as an example we need about $1.5m per year. While Edmonds has paved a few streets in the last couple of years it has all been done with federal stimulus money or as a part of a utility project. Edmonds has not paved a street on its own for the last few years.

    Primary streets are estimated to need overlay work every 15-20 years and other streets need overlay work in the 30-40 year range. To keep up with this need is where the $1.5m comes in. Although the first $20 TBD fee goes to the street fund, none of it goes to overlays. This year’s transfer from the General fund was around $770,000 but none of it went to overlays.

    With about 25,000 registered vehicles at $20 each we raise about $500k. The proposed $40 added fee seems to be going $20 to overlay work and $20 to the long list of other projects. If you just look at the overlay part that generates $500k for overlay work when the requirement is for about $1.5m just to stay even. While the Mayors budget is not yet out it is hard to believe there will be a line item from the general fund going to overlay work that makes up the short fall. So how are we going to protect the investment we have in streets? How do we make sure we do not create hazards that could open us to lawsuits from bikers and walkers and cars?

    When we look at things like the TBD we can discuss the taxing philosophy but we also need to go back to what it is we want to do with basic services like maintain the infrastructure we have. On one hand we can argue about the merits of the new things on the long list, but on the other hand how do we argue about the basics like keeping the infrastructure we have in an acceptable condition. The questions boil down to what will it take to maintain what we have and where do we get the money to do it. If we want it to come from the TBD then $20 is not enough, it would take about $60 of TBD funds to raise the $1.5m annually. If we want it to come from the general fund then we have to put it in the budget. Since NO GENERAL FUND dollars are going to street overlays we would need to put that in the budget. The bottom line Edmonds has about 20,000 households and we need about $75 per household per year to keep the roads in good condition.

    Logic would suggest that since none of our current taxes go to street overlay work we need to find a way to fund this basic service. We can shift funds from other places in the budget and anger people who want those funds to stay where they are or we can find new funds through a levy increase, a TBD fee, or pass the hat. The bottom line is we need a complete plan to pay for the basics. This is not to say what is the right way but rather to point out that we are kidding ourselves if we think the TBD will take care of street overlay work because it will not be enough unless we dedicated all $60 to street overlays.

    The current plan is to have $20 or $500k go to the long list of projects. The 36 project on the list represent about $54.5m with the top 10 ranked projects representing about $5.3m. So with $500k per year it would take about 11 years to get to the top 10 projects. To do the entire list of 36 projects it will take about 109 years. This is not to say we should not consider these projects but the TBD fee will not take care of these needs either in any of our life times.

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