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Dear Friends,

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I wanted to take a quick moment to give you an update on the second special session in Olympia. First, I'm very disappointed that the Legislature has taken so long to work out an operating budget agreement. However, we have stood firm and Democrats have largely given up their insistence on raising your taxes by nearly a billion dollars. So that's a victory for taxpayers.

The good news today is that state lawmakers are very close to a final agreement on the operating budget. I am very optimistic a vote will be taken in time to keep state government operating into the next fiscal cycle.

TRANSPORTATION REVENUE BILL SEEKS HEFTY TAX INCREASES

As we wait for budget negotiators to work out final details, there are a number of other bills in the balance, including a proposed transportation revenue package. House Democrats want to raise the ReaderBoard-TranspoRevenuestate gas tax by 10.5 cents in two phases – 6 cents beginning in August of this year and 4.5 cents starting in July 2014. That would bring our state's gas tax to 48 cents a gallon, which would be one of the highest amounts in the nation. They also have proposed a lengthy list of fees, including:

  • A weight fee increase of between $15 and $35;
  • A 15 percent weight fee increase for trucks over 10,000 pounds (gross vehicle weight);
  • A $5 fee for each vehicle registration renewal not processed by a sub-agent and a $12 fee for each certificate of title transaction not processed by a sub-agent;
  • Various service fees for certain Department of Licensing transactions and a fee increase of $6 per year for an Enhanced Driver's License or Enhanced Identicard;
  • Elimination of the handling loss deduction for licensed fuel suppliers, distributors and importers; and
  • Redeployment of the 2012 fee increases.

PROPOSED PROJECT SPENDING

The proposed project list is long. And while there are some worthwhile projects, I'd like to point out there are some major financing and funding issues that are very concerning. For instance, what's wrong with this picture?

  • $420 million for the U.S. 395/North Spokane Corridor.
  • $835 million for various bicycle, pedestrian and transit projects.

The people of Spokane have waited 67 years for the North Spokane Corridor project to be completed. Yet, this proposal would put TWICE as much money into bicycle paths and sidewalks than to the North Spokane Corridor project.

Other questionable spending includes: $160 million for fish culverts, $26 million for stormwater retrofit projects and $50,000 for a Department of Ecology study on inspections and regulations of gasoline vapor emissions.

ALL THE TAXES WITH VERY FEW REFORMSSalesTaxesOnRoadProjects

While House Democrats want billions more of your hard-earned tax dollars, they have still failed to address many of the reforms we sought earlier this year to ensure your money is used as efficiently and effectively as possible. For instance, Washington spends more per mile than other states because of its excessive environmental regulations. Plus, the state charges itself sales taxes on transportation projects!

The 18th Amendment to the Washington State Constitution requires motor vehicle license fees and state gas taxes to be used exclusively for highway projects and nothing else.

How does the state get around this amendment? By charging itself sales taxes on transportation projects.

This means valuable transportation revenue, such as that proposed above, would be funneled out of the transportation budget and into the state's general fund, and then used to pay for non-highway projects like general government.

How significant is this? In the most recent budget cycle, $413 million in transportation funds was paid in sales tax to the general fund. The Washington State Department of Transportation estimates that project delivery costs could be reduced up to 8.5 percent if their projects were exempt from state sales taxes.  Yet, that's not a reform you will see in this transportation revenue package.

Also, remember, this revenue package would be bonded and the debt service over 12 years is expected to cost taxpayers $1.35 billion. In other words, the state borrows money over time to pay for transportation projects, including the cost of the sales taxes, which it then pays itself to the general fund. And you, the taxpayer, end up paying not only the principal and interest on the cost of the project, but also the interest on the money borrowed to pay the sales taxes to the state.

House Bill 1985 would have ended this practice by exempting state transportation projects from state and local sales and use tax. Unfortunately, House Democrats wouldn't even allow the bill a hearing.

House Republicans have also proposed other vital transportation reforms. Read about them here. Before we ask taxpayers for more money, I believe we need to adopt these reforms. As I've said in the past, “Fix it before you fund it!”

TRANSPORTATION REVENUE PACKAGE FAILS, UP FOR RECONSIDERATION

There are many reasons why I voted against the transportation revenue measure, House Bill 1954, including those I've listed above. Even a number of majority Democrats do not support this financing mechanism. Yesterday, the bill was brought to a vote on the House floor. It needed 50 votes to pass. The measure failed 48-42, with seven Democrats voting against it. One Democrat spoke for the bill, but voted against it at the last moment so he would be on the prevailing side. That's required to request a reconsideration motion, which he did. That provides an opportunity for a re-vote, which is expected sometime today.

A TRANSPORTATION BUDGET WAS APPROVED IN THE REGULAR SESSION

It's worth noting that this transportation revenue package is separate from the state transportation budget. The 2013-15 transportation budget passed earlier in the legislative session and was signed into law. It represents $8.8 billion – $5.2 billion for capital projects and $3.6 billion for operating programs. You are already helping to pay for state transportation needs under the budget that passed in April.

TAKE ACTION NOW!

Your action is needed. Call the Speaker's office and tell him to STOP THE GAS TAX INCREASE!

Here's the number:

Speaker Frank Chopp: (360) 786-7920

You can also send a message through me using the toll-free Legislative Hotline: 1-800-562-6000.

SURVEY: I WANT TO KNOW WHAT YOU THINK ABOUT THE GAS TAX INCREASE

As you can imagine, there are a lot of special interests applying the pressure to pass this new transportation revenue package. However, I believe the most important voice is yours. So please take my quick one-question survey and let me know if you support this new revenue package.

Go here to vote: http://www.surveymonkey.com/s/shea-gas-tax-survey

I encourage your input. You will see my contact information at the bottom of this e-mail.

Sincerely,

Matt Shea

State Representative Matt Shea, 4th Legislative District
RepresentativeMattShea.com
427A Legislative Building | P.O. Box 40600 | Olympia, WA 98504-0600
matt.shea@leg.wa.gov
360-786-7984 | Toll-free: (800) 562-6000