Wheels of justice slow down car-tab refunds to motorists

By Eric Pryne
Seattle Times staff reporter

7/7/04

When the state Supreme Court upheld Initiative 776 last fall, the decision entitled most King County car and truck owners to refunds of some vehicle taxes they had paid while the measure was in constitutional limbo.
It has been eight months since the court has ruled. Still no checks.

Why the delay? Because the wheels of justice grind slowly. And because calculating and processing the refunds is a bigger, more complex job than you might think, said Brad Benfield, spokesman for the state Department of Licensing.

The Supreme Court didn't officially clear the way for the refunds until March. Since then, the governments responsible for paying the money — the state, King County and Pierce County — have been negotiating just how to do it.

"It's a huge undertaking," Benfield said. "Sending out 2.3 million checks is a daunting task."

A lawyer for the initiative's sponsor agrees. "I don't know that they've been dragging their feet," said Jim Klauser, who represents Tim Eyman's Permanent Offense in continuing court battles over I-776. "These are complex matters."

If all goes according to plan, the checks could be in the mail in the next few months.

I-776 refunds: Who gets how much

While the checks probably won't be mailed for several months, owners of 2.3 million cars and trucks — more than one-third of the motor vehicles in the state — are entitled to refunds because the state Supreme Court upheld Initiative 776 last fall.

What's being refunded: King County and Pierce County vehicle-license fees paid between December 2002 and November 2003; state weight fees on light trucks (between 4,000 and 10,000 pounds) paid between February and November 2003. I-776 also repealed vehicle-license fees charged by Snohomish and Douglas counties, but those counties stopped collecting the taxes shortly after the initiative passed in November 2002.

How refunds break down:

• Owners of 1.02 million cars in King County will get a $15-per-vehicle county license-fee refund.

• Owners of 138,000 light trucks in King County will get the license-fee refunds, plus refunds of state weight fees.

• Owners of 393,000 cars in Pierce County will get a $15-per-vehicle county license-fee refund.

• Owners of 75,000 light trucks in Pierce County will get the license-fee refunds, plus refunds of state weight fees.

• Owners of 699,000 light trucks in the state's 37 other counties will get refunds of state weight fees only.

The weight fee refunds:

• Vehicles that weigh 4,000-6,000 lbs: $7.

• Vehicles that weigh 6,000-8,000 lbs: $14.

• Vehicles that weigh 8,000-10,000 lbs: $25.

Source: Washington Department of Licensing

Voters approved Initiative 776, tax rebel Eyman's most recent bid to limit car tabs to $30 statewide, in November 2002. Among other things, it repealed the $15 annual vehicle-license fees charged by King and Pierce counties, as well as the state's weight fees on light trucks.

I-776 was supposed to take effect a month after it passed. But the two counties got an injunction, so the Department of Licensing kept collecting the taxes for them and for the state for nearly a year while court challenges to the initiative's constitutionality played out.

King County Superior Court Judge Mary Yu struck down I-776 in February 2003. The Supreme Court reversed Yu's decision Oct. 30, sending the case back to her to resolve some issues still in dispute. Collections of the county license fee and state light-truck fee stopped last November.

Altogether, Benfield said, more than $38 million collected after Dec. 5, 2002, will be refunded to the owners of more than 2.3 million vehicles, including 1.16 million in King County.

But state and county officials say the checks can't be sent until Yu issues a formal order. That hasn't happened.

Even though it upheld I-776 before Halloween, the Supreme Court still had to deal with follow-up motions.

It didn't finish that work and officially send the case back to Yu until March.

Since then, the judge hasn't been presented with an order to sign because the counties and the state haven't worked out all the details of the refund program.

They have decided the state Department of Licensing will handle all the refunds, Benfield said, "so people won't be getting different checks from different entities." But they haven't settled on how the counties and state should divide up the administrative costs, or exactly what those costs are.

Both sides say they're close. "I think we have a deal," said senior assistant attorney general Jim Pharris.

"They're going back and forth with wording," said Elaine Kraft, spokeswoman for King County Executive Ron Sims. "The differences aren't huge."

Under the tentative plan, the state would pay the costs for calculating, printing and mailing the light-truck weight-fee-refund checks. King and Pierce counties would pay those costs for the county license-fee refunds.

For more than 200,000 light-truck owners who are entitled to both refunds, the county and state would split the administrative costs 50-50.

Pharris said he hopes a draft order will be on Yu's desk in the next few weeks. Once she signs it, Benfield said, checks should be mailed within 90 days. He said he couldn't be more specific because he didn't want to tip off mail thieves.

Each of the 2.3 million checks will cost between 50 cents and $1 to process and mail, Benfield said.

Although the state has been holding the money for eight to 19 months, it won't refund the fees with interest. Benfield said there's no law authorizing that.

When the Supreme Court upheld I-776, it didn't decide the fate of Sound Transit's 0.3 percent motor-vehicle excise tax, also targeted for repeal by the initiative. That tax is still being collected; Sound Transit contends that it must continue because the agency sold bonds in 1999 that are partly backed by the tax.

The Supreme Court sent that part of the case back to Yu, who is scheduled to hear motions Aug. 27.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com

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