Promises Broken

Governor Locke’s tax plan breaks faith with the voters

Yesterday, Governor Gary Locke unveiled phases two and three of his plan to relieve traffic congestion. Unfortunately, he forgot to tell us what happened to phase one. In his State-of-the-State address earlier this year, the governor proposed a three-prong plan to fix transportation:

1. Make the Department of Transportation (DOT) as lean and efficient as it could possibly be;

2. Make a list of critical transportation improvement projects; and

3. Put forward a plan to pay for these projects.

What happened to the first phase: efficiencies? The governor had a laundry list of efficiency measures recommended by the Blue Ribbon Commission on Transportation. But he never pressured the legislature to enact them.

The governor’s proposed tax package promises to raise nearly $500 million a year for statewide transportation needs. But each component of his tax package has several pitfalls:

1) The proposed 7-cent increase in the gas tax is just the beginning.

Proponents of a gas tax increase argue that it hasn’t been raised in ten years. Just because a tax hasn’t been changed in a long time is no excuse to raise it. Lawmakers have a tendency to raise the gas tax in spurts. From 1977-1991, the gas tax was raised six times in fourteen years. This latest proposal is most likely the beginning of a string of gas tax hikes. The 7- cent proposal is also only the state gas tax. There is talk of allowing regions and other local entities to raise their gas taxes. We will all be seeing more than just a 7-cent increase.

2) The proposed 2% sales tax on new and used automobiles will not raise as much money as expected.

The governor’s proposal will push sales taxes on cars to more than 10% in many areas (when you include local sales tax). More people will likely go out of state to buy cars and pay just the current Washington state sales tax. Much of the expected revenue from the increase will most likely be offset by lower car sales.

Washington auto dealers already provide 13% of sales tax revenue for Washington state. This is on top of any business and occupation taxes dealers pay. Why are we placing a greater burden on the auto industry?

3) The proposed 50% increase in weight fees on commercial vehicles will be passed on to consumers.

It is unrealistic to expect that the entire increase will be absorbed by commercial vehicle operators. Some if not all of the added cost will be passed on to the general public and add to our already high tax burden.

Governor Locke bypassed numerous opportunities to make DOT more efficient. Over $2 billion in efficiencies can be achieved by privatizing the ferry system, and contracting out some transportation services including rest areas and information kiosks.

The governor can also reduce transportation costs by eliminating prevailing wage laws and project labor agreements. These regulations needlessly drive up the costs of transportation projects.

Before our leaders ask us for more of our hard-earned money, they must show us that they are spending the money they have now in the best way possible.

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org