Car tab refunds postponed



Olympia, WA - Twenty months after voters repealed some vehicle taxes, owners of 2.3 million cars and trucks are still waiting for their refunds.

They'll have to wait a little longer, but they might get a little more back. On Friday, a King County judge delayed acting on a plan to refund more than $38 million in vehicle license fees required under Initiative 776.

Superior Court Judge Mary Yu said she was intrigued by the question of whether the government should be required to return the money - generally $15 per vehicle - plus interest. She gave lawyers for initiative sponsor Tim Eyman until Monday to make a case for more time to reshape the refund plan.

"It's just wrong for the government to ignore something that has been voted into law, and then to wait 20 months to give the money back," said Robert Rowley, Eyman's attorney. "If a credit card company tried to do that, it would be facing a class-action suit."

I-776, approved in November 2002 by 51 percent of Washington voters, sought to limit car tab fees to $30 per vehicle. The measure repealed a $15 annual fee charged by Pierce and King counties for local road projects. It also removed the state's weight-based fee for light trucks. Eyman argues the initiative repealed Sound Transit's automobile excise tax, though that remains unresolved by the courts.

The state Department of Licensing continued to collect the taxes while the counties went to court to challenge the legislation's constitutionality.

The state Supreme Court's decision to uphold the measure last fall put an end to that, though follow-up motions and discussions among the state and counties about how to distribute the money and cover the administrative costs continued to delay refunds.

Rowley said the government's agreement was made behind closed doors without the input of initiative sponsors.

"We want to be part of this discussion," he said. "We assumed that the negotiations would include us."

Lawyers for the government maintain the process was conducted openly.

"It was clear to all parties that the counties and the state were engaged in discussion," said Linda Moran, a senior assistant attorney general. "We have been very forthcoming. We didn't have the agreement to share until we came up with it last week, but nothing about the process was ever hidden."

Yu said she considered the issue of interest payments to be a legitimate legal concern, but she questioned why it came up so late in the process. Still, she agreed to postpone her decision until Monday when Eyman and his supporters will have to argue for more time to rehash the details of the agreement.

"All of us agree that it is in the public's interest to get things moving," Yu said. "So I'd like to find out whether or not there's a good-faith basis to consider the interest issue or any other concerns."

Moran urged the judge to sign the refund plan before Thursday. That's when bids by a bank and a check-printing company to process the refunds expire. Including those agreements, administrative costs for the refunds are expected to cost 72.5 cents per check, for a total of about $1.7 million.

Under the current agreement, Pierce County would reimburse the state $312,000; King County would pay $790,000. But state officials said those costs could increase as much as 52 cents per check if they miss the deadline and have to renegotiate.

Vehicle owners who paid the repealed taxes since Dec. 5, 2002 are slated to receive a refund before mid-November.

Yu also extended the deadline for Eyman's attorneys to review documents regarding Sound Transit's 0.3 percent motor-vehicle excise tax, which the initiative seeks to repeal. That tax is being considered separately because the agency says it must continue to collect it in order to sustain backing for bonds it sold in 1999.

The trial on the Sound Transit tax is scheduled to begin Dec. 13.

Miriam Gottfried: 253-597-8698

SIDEBAR: Who gets a refund

If a judge approves the car tab refunds, the refunds will go to any vehicle owner who paid a county license fee between December 2002 and November 2003, and any owner of a light truck (4,000-10,00 pounds) who paid a state weight fee between February and November 2003.

Owners of 392,727 cars in Pierce County and 1.02 million cars in King County will get a $15-per-vehicle county license-fee refund.

Owners of 75,269 light trucks in Pierce County and 138,391 in King County will get the license-fee refunds, plus weight-fee refunds of $7 to $25.

Owners of 697,621 light trucks in the state's 37 other counties will get refunds of state weight fees.

SOURCE: State Department of Licensing


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