In the Sunday, 09-12-99 edition of the Seattle Times, on the editorial page, there was an editorial by the Times commenting on how the lack of planning that went into the drafting of the initative will make things worse then ever. What else could we expect from the Times?

Anyway they were stating that if I-695 passes, that adding the vehicles we own to be taxed on our property taxes could well happen without a vote of the people, as it is a tax that is on the books, so to speak, just not collected because of the MVET. So obviously those that oppose the issue say that is what will happen.

Does anyone know for sure if that is correct? If so, could you provide me with a Wash. State RCW number. I have glanced through the RCW's and I don't see anything about that. Could this possibly just be another scare tactic by the oppsition?

-- Wayne Alishokis (wga1943@yahoo.com), September 13, 1999

Answers

Wayne:

It is a scare tactic. There are no RCW's that describe how a property tax on vehicles could be collected.

However, I-695 requires voter approval for any tax increase or the imposition of a new tax, or the increase of a tax base.

It is amazing that the opposition will lead you to believe that a vote will be required for something like an increase Xerox fee at the library. Then in the second breath they want you to believe that they can impose a property tax on your vehicle without a vote of the people.

Remember the state and local governments will adjust. Just like you and I adjust when they raise our taxes.

Washington is the 6th highest taxed state in the nation.

The state has a $1 billion tax surplus and the local governments have an average daily balance of over $3 billion. Local taxing districts also have many other places to invest surplus tax dollars.

The state and local governments have other options than raising taxes. But they want you to think that Washington will fall into the Ocean if I-695 is passed.

They said the same thing when the sales tax was taken off from food. (the state and local governments adjusted)

They said the same thing when I-601 was passed. (this resulted in a $1 billion state tax surplus)

A loss of less than 2% of government revenue will not put us into the Ocean. (Especially when the state's budget was increased by 11% this year and the inflation rate is just over 1%)

-- RD (Monte) Benham (rmonteb@aol.com), September 14, 1999.

Adoption of I-695 will require personal property tax to be charged under existing law for vehicles.

Section 3(19) of Initiative 695 expressly repeals the only section of Washington law which exempts vehicles from personal property tax--RCW 82.44.130. The Washington Constitution and RCW 84.36.005 each require now that all property, real or personal in the state shall be taxed uniformly, except property specifically made exempt by law. The result is that unless exempt, all personal property must now be taxed uniformly with all other non-exempt property. A vote to adopt I-695 is a public vote repealing the only exemption against existing personal property taxation of vehicles.

Some have questioned whether a vote of the people under section (2) would be required before a local government or the state could "impose" a tax on vehicles that wasn't imposed last year. The answer is NO. The reason is that we are the voters who will impose the increase in the tax base, if we vote for Section (3) of the Initiative. No discretion is left to any government official to tax or not tax vehicles, without an exemption in general legislation. The property tax must be charged equally to all non-exempt property.

What is really unusual is that if I-695 repeals the exemption of vehicles from property tax, the legislature couldn't even reimpose an exemption for vehicles without a 2/3 vote of each house for at least 2 years under the Constitution. They couldn't even do that without voter approval, because exempting that much property value from which to collect the monetary amount charged last year would cause the rates to increase for everyone else, requiring a vote under Section (2) of I-695.

The hassle of filing personal property tax returns every March is almost as bad a any tax I would pay. Now I don't have to file personal property tax returns, if all I have is household goods and personal effects, which are exempt in an unlimited amount, and my other personal property does not exceed a general $3000 exemption. Vehicles are expressly excluded from the definition of exempt household goods and personal effects, so if I own vehicle(s)of more than $3,000 fair market value (it runs), I will have to start filing annually. The Assessor will have to determine the value of my vehicle and the Treasurer will be required to extend the tax rate to that value. I'll have to pay that tax by April 30, or if any significant tax is due, 1/2 in April and 1/2 by November. If I lie on my personal property tax return I can be charged with felony perjury, and the Treasurer can collect a 100% penalty on the tax due, if I willfully file a false return or fail to file. If I'm late in filing, a penalty from 5% to 25% is required.

The added costs to collect this slightly lesser tax substituted by Section (2) of the Initiative will exceed the cost of collecting the MVET by several times, and it will be borne by local governments (County Assessors) from revenue now used for law enforcement and other purposes, not the Department of Licensing, who pays the more efficient expenses of collecting MVET. I believe, but have not yet seen any actual cost estimates from any county, that the cost will actually exceed any revenue which results. The trouble is that even if it costs more money than it gathers, the constitutional uniformity requirement will require that it be done, unless voters approve replacement of the exemption removed by I-695.

-- Bob Dick (bdick@harbornet.com), September 14, 1999.

The state has already answered that question. If they did try to impose property taxes on vehicles they believe the public opposition would kill it.

-- maddjak (maddjak@hotmail.com), September 14, 1999.

madjack

You wrote that "The state has already annswered that question. If they did try to impose property taxes on vehicles they believe public opposition would kill it."

Unfortunately the "state" has nothing to say about it, nor do Assessors. The constitution now requires all non-exempt personal property to be taxed. If we vote to repeal the exemption, we are "imposing property tax on vehicles." The state doesn't have the luxury of deciding whether or not to follow the law. Maybe you could get another public vote next year to reinstate the exemption for vehicles this vote removes (though that would increase my other property taxes), but we will have to file personal property tax returns in March.

Monte wrote: "It's a scare tactic. There are no RCW;s that describe how a property tax on vehicles could be collected."

Wrong! Chapter 84.40 RCW now requires every person having non-exempt personal property (me) to file a return under oath by March listing each type of personal property, the purchase price and purchase date, and any other data required by the Assessor to verify the taxable value. Assessors are then charged with determining the "true and fair market value" of all non-exempt property (by looking at comparable sales prices for used equipment, such as the blue book, or any other traditional means of appraising value. They haven't been doing it for personal vehicles since the 30's, but they sure know how for off-road vehicles, dozers, farm machinery and anything else bought and sold. If their best estimate of market value is wrong, you can get it corrected by showing more compelling evidence of what a willing buyer would pay for the vehicle, if you want to spend the time. That is one of the reasons property tax costs so much more to administer than MVET.

-- Bob Dick (bdick@harbornet.com), September 14, 1999.

Again, this issue IS a scare tactic.

Even if this is adopted (and the WA Assn of Counties has called it "impossible,") the tax would be reduced from the current 2.2% tax we pay to the less then 1.4% property tax level.

So, instead of this being a reason to vote AGAIBST 695, it is, in reality, yet another reason to vote FOR it. The worst that can happen in either event is that the vast majority of us will pay LESS money, and we'll STILL get to control yax/fee increases through the vote.

What's NOT to like?

Westin

(Who points out the FACT that if this scenario were true, the budget wonks would all be planning ion how to spend this revenue. None of them are, because, of course, they know better.)

-- Westin (86se4sp@my-deja.com), September 14, 1999.

Westin:

It would be "impossible" to propose it and have it approved on purpose by voters. The point is, it is being proposed and adopted BY ACCIDENT, if I-695 were approved. No one is planning to spend the money, because: (1) it has not passed, (2) it will likely be tied up in court for a year or more, at which point they will have better information, (3) the cost of collection as a property may be huge, even using up much if not most of the revenue, (4) the whole thing may be unconstitutional for other reasons.

-- dbvz (dbvz@wa.freei.net), September 15, 1999.