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HomeMy WebLinkAboutR-1998-138 Joint ResolutionCITY OF YAKIMA RESOLUTION NO. R-98- 138 YAKIMA COUNTY RESOLUTION NO. 479-1998 Resolution expressing support for "Referendum Bill 49 - Shall motor vehicle taxes be reduced and state revenues reallocated; $L9 billion in bonds for state and local highways approved; and spending limits modified?" A JOINT RESOLUTION OF THE CITY OF YAKIMA AND YAKIMA COUNTY expressing support for Referendum 49, a statewide ballot measure that would provide a $30 dollar per vehicle motor vehicle excise tax ("MVET") credit; fund significant state and local highway improvements through motor vehicle excise taxes and general obligation bonds; increase city and county criminal justice funding; increase MVET distribution to municipal sales and use tax equalization account; allow the City of Yakima to use general sales/use tax revenues as a match for local transit agency MVET revenues; transfer certain moneys from the state general fund to the Community Economic Revitalization Board; and provide new funding to distressed counties. WHEREAS, the Washington State Legislature approved that certain legislation ("Referendum 49") be submitted to the voters in the fall of 1998 for their approval or rejection; and WHEREAS, Referendum 49 transfers MVET revenues from the state general fund into the motor vehicle fund to fund transportation improvements; and WHEREAS, Referendum 49 provides a $30 dollar per vehicle MVET tax credit; and WHEREAS, Referendum 49 modifies the MVET depreciation schedule, reducing the value of vehicles during the 2nd and 3rd year of ownership; and WHEREAS, Referendum 49 reduces the MVET portion dedicated to county and city criminal justice accounts, but provides new criminal justice funding from the state general fund that would increase annually based on population growth and inflation; and WHEREAS, Referendum 49 increases the MVET distribution to the municipal sales and use tax equalization account; and WHEREAS , Referendum 49 authorizes cities with populations over 60,000 that own and operate municipal public transportation systems as of January 1, 1998 (Yakima and Everett) to use general sales/use tax revenues as a match for local transit agency MVET revenues which will result in an estimated $1.3 million in revenue for the City's Transit system annually beginning in 2001; and WHEREAS , Referendum 49 transfers moneys in excess of those needed to fund county sales tax equalization from the state general fund to the Community Economic Revitalization Board and half of this amount would be dedicated to a distressed counties public facility account; and WHEREAS, Referendum 49 provides new funding to distressed counties (counties in which the unemployment for the preceding three years exceeds the statewide average by 20%) which would result in an estimated $2 million annually coming to Yakima County beginning in 2000; and WHEREAS, Referendum 49 authorizes $1.9 billion dollars in general obligation bonds for the location, design, right-of-way, and construction of state and local highway improvements; WHEREAS, provides $2A billion dollars for expenditure over the next 25 years for state highway improvements, freight mobility projects, local criminal justice funding, and sales tax equalization for smaller cities; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA: Referendum 49 is hereby endorsed and the citizens of the City of Yakima and Yakima County are urged to vote in favor of Referendum 49 in the November general election on the basis that it would provide a $30 dollar per vehicle motor vehicle excise tax (MVET) credit; fund significant state and local highway improvements through motor vehicle excise taxes and general obligation bonds; increase city and county criminal justice funding; increase MVET distribution to municipal sales anduse tax equalization account; allow the City of Yakima to use general sales/use tax revenues as a match for local transit agency MVET revenues; transfer certain moneys from the state general fund to the Community Economic Revitalization Board; and provide new funding to distressed counties.. ADOPTED BY THE CITY COUNCIL this 6th day of October, 1998. ohn Puccinelli, Mayor ATTEST: Karen Roberts, City Clerk NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF YAKIMA COUNTY COMMISSIONERS: Referendum 49 is hereby endorsed and the citizens of the City of Yakima and Yakima County are urged to vote in favor of Referendum 49 in the November general election on the basis that it would provide a $30 dollar per vehicle motor vehicle excise tax (MVET) credit; fund significant state and local highway improvements through motor vehicle excise taxes and general obligation bonds; increase city and county criminal justice funding; increase MVET distribution to municipal sales and use tax equalization account; allow the City of Yakima to use general sales/use tax revenues as a match for local transit agency MVET revenues; transfer certain moneys from the state general fund to the Community Economic Revitalization Board; and provide new funding to distressed counties.. ADOPTED BY THE BOARD OF YAKIMA COUNTY COMMISSIONERS this 6th day of October, 1998. BETTIE INGHAM Chair rWILLIAM H. FLOWER _is��'°U^!rc� Commissioner P•18("' . y ATTEST. a H. Hinojosa, Clerk the Board ASSOCIATION OF WASHINGTON CITIES transportation Provisions of Referendum 49 Referendum 49 is part of a transportation financing plan passed by the 1998 Legislature that would allow the expenditure of $2.4 billion on transportation projects. The Referendum will be on the November 1998 ballot. Sumrnary of Major Provisions Vehicle Tax Cut $30 per vehicle tax credit against the Motor Vehicle Excise Tax (MVET) and revision of the depreciation schedule to reduce the value of cars for tax purposes in the 2nd and 3`d years. Revenue Transfer to Transportation Transfer additional MVET revenues to the Motor Vehicle Fund (MVF) for transportation purposes. This revenue would otherwise flow to the State General Fund. Support for Local Governments - Increase total funding for city and county criminal justice accounts and for municipal sales and use tax equalization account. Partially switch the funding source for local criminal justice accounts from MVET to the State General Fund. Allow certain cities that own and operate public transportation systems to use general sales/use tax revenues as a match for transit MVET revenues. Provide new funding for distressed counties and increase funding to Community Economic Revitalization Board. Reduction to General Fund The combined effect of the above measures would reduce State General Fund Revenues and thus reduce the amount of money the state can borrow to fund capital construction projects because the state debt limit cannot exceed 7 percent of specified general fund revenues. Re-enact Initiative 601 Permits the MVET transfer for transportation and the State General Fund distribution for local criminal justice without a downward adjustment of the state's expenditure limit. 2 - Association of Washington Cities Q. How does Referendum 49 relate to the $2.4 billion transportation financing package? A. Referendum 49 is a large component of the $2.4 billion package. The Referendum will produce a revenue stream for transportation purposes of approximately $1.81 billion over the next 25 years. The remaining $0.61 billion of the $2.4 billion package comes from three revenue sources identified by the Legislature. These are: 1) Transferring the costs of certain state activities out of the Motor Vehicle Fund, 2) Changes in fuel tax collection which will result in increased fuel tax revenues and 3) Cost savings from efficiencies and policy changes at the Department of Transportation. Q. How does the bonding provision of Referendum 49 work? A. Referendum 49 authorizes the state to issue $1.9 billion in bonds for transportation 'Net present value. Q&A purposes to be paid off over 25 years. The bonds will be paid off with gas tax money, which will be "backfilled" with revenue from the Referendum and the larger transportation financing package. Issuing bonds with the revenue generated by the Referendum allows the state to get the transportation projects underway as soon as possible. However, this also means that there will be no additional revenue available from the Referendum for transportation projects until the bonds are paid off in the year 2023. Q. What will the new transportation revenue be spent on? A. Referendum 49 is a revenue proposal, not a spending plan. If the Referendum is passed in November, the Legislature will determine how to spend most of the money in the 1999 session during the budget process. There were several projects, totaling $44.2 million, included in the 1998 supplemental transportation budget that are contingent on the passage of Referendum 49. These projects will be funded immediately if the Referendum passes. Q. Is there already a "list" of projects that will be funded if the Referen- dum passes? A. As mentioned above, Referendum 49 does not include any provisions for spending the new transpor- tation revenue. That said, two slightly different proposals (lists) for spending the $2.4 billion in new transportation revenues were presented during the 1998 legislative session by the House and Senate Transportation Committees. These proposals included lists of state highway projects that the committees wanted to fund. The Legislature will have the ability to modify the proposed spending plans in 1999. The graph on the following page shows the components of the House Transportation proposal. ... continued September 1998 - 3 Proposed House Transportation Spending Plan (S n Millions) Highway Safety and Bridge ($14u) State Freight Mobility (5216) Econoaaic Development ($99)" Flood Mitigation/ Fish Passage (S32) Ferries Capital Program (S200) Highway Congestion Relief (51,265) Local Governments (5370) Passenger/Freight Rail Capital (597) $55 - CRAB $35-T1B $200 - Freight Mohairy 540 - County Preservation 540 - Cities Q. What will cities get for transportation if the Referendum passes? A. The only projects that are guaranteed funding if the Referendum passes are those included in the $44.2 million 'that was part of the 1998 supplemental transportation budget. The remainder of the money will be allocated based on a spending plan that must be adopted by the 1999 Legislature through the transportation budget process. IF the spending plan mirrors the 1998 House Transportation Policy and Budget Committee proposal represented above, over the next 25 years, cities over 5,000 would receive $28 million in direct distributions and small cities would receive $12 million through the Transportation Improvement Board (TIB) small cities program. Cities would also be able to compete for $35 million from the TIB and $200 million in local freight mobility funds. The freight mobility funds could be used for road/rail grade separation projects and other transportation projects that help improve freight mobility along strategic corridors. Need more info? For additional information regarding Referendum 49, contact Diane Carlson or Faith Trimble of AWC at (360) 753- 4137, or e-mail: diane.carlsonL awc.gen.wa.us or faith.trimble @awc.gen.wa.us. Association of Washington Cities 1076 Franklin Sheet SE Olympia, WA 98501 I I 11 I1!I I „i 11 BULK MAIL US. POSTAGE PAID PERMIT NO. 201 OLYMPIA, WA At— June 1998 Motor Vehicle Excise Tax Summary: Referendum 49 Referendum 49 is part of a transportation financing plan passed by the 1998 Legislature that would allow the expenditure of $2.4 billion over the next 25 years on transportation projects. The referendum will be on the November 1998 ballot. The major provisions of the referendum would: • Provide a $30 per vehicle MVET tax credit; • Modify the MVET depreciation schedule, reducing the value of cars the 2nd and 3rd year of ownership; • Transfer MVET revenues from the state general fund into the motor vehicle fund to fund transportation improvements. • Reduce the MVET portion dedicated to the county and city criminal justice accounts, but provide new criminal justice funding from the state general fund. The general fund contribution would increase annually based on population growth and inflation. The inflationary cap on the remaining MVET local criminal justice portion would be removed. The credit and schedule modification would cut MVET revenues to the state by $257 million in the1999-01 biennium. 441 5156 million would be transferred from the state general fund to the motor vehicle fund in the 1999-01 biennium. 44.1 This change would result in a net increase to city and county criminal justice funding. Expected to add about $4 million to the city criminal justice account in FY 2000. This change would have fully funded equalization cities in • Increase MVET distribution to the municipal sales *11998. Expected to add about $4 million to the city and use tax equalization account. equalization account in FY 2000. • Authorize cities over 60,000 that own and operate municipal public transportation systems as of January 1, 1998 to use general sales/use tax revenues as a match for local transit agency MVET revenues. This would be phased -in over a four-year period. • Transfer moneys in excess of those needed to fund county sales tax equalization from the state general fund to the Community Economic Revitalization Board (CERB). Half of this amount would be dedicated to a distressed counties public facility account to provide financial assistance for extraordinary costs due to the location or expansion of major new business facilities. Everett and Yakima would qualify. This provision would make them co -equal with other municipal transportation systems in the ability to provide a local match. 44-1 CERB makes competitive grants and loans to political subdivisions for public facilities, which includes cities. • Provide new funding to distressed counties. About $10 million would be dedicated to distressed Distressed counties are those in which average counties in FY 2000. Cities would not receive funds from unemployment for the preceding three years exceeds this distribution. the statewide average by 20%. • Re-enact Initiative 601 to permit the MVET transfer for transportation and the general fund distribution for local criminal justice without a downward adjustment on the state's expenditure limit; and permit reimbursement to local governments for state mandates through a transfer of state revenue, in addition to a specific appropriation. • Authorize up to $1 9 billion in general obligation bonds for the location, design, right of way, and construction of state and local highway improvements. Note: MVET distributions for city public safety (per capita distribution for police and fire) and county public health purposes remain relatively neutral. Ref 49 & General Fund Distribution FY 2000 - 5759.3 million in millions Ferries S95.3 (13%) Canoes- MVETand cF 596.8 (t3%) Administration " Cities - S88.2( iri.) ities- S88.2(irSS) MvEr and GF S107.1 (14%) Transportation & Transit 5371.9 (48%) (over) 17 City Distributions under Current Law and Referendum 49* FY 2000 to FY 2002** S's in millions Public Safety Sales Tax Equalization Criminal Justice"' Total FY 2000 July 1999 - June 2000 Current Ref 49 Difference 545.6 $45.7 50.1 536.9 540.9 S4.0 517.0 520.5 S3.5 599.5 5107.1 57.6 FY 2001 July 2000 - June 2001 Current Ref 49 Difference 548.3 548.6 50.3 539.0 543.5 54.5 517.4 $21.6 54.2 5104.7 S113.7 59.0 FY 2002 July 2001 - June 2002 Current Ref 49 Difference. 550.9 551.4 50.5 S41.2 S46.0 54.8 517.8 522.8 55.0 5109.9 5120.2 S10.3 Effective July 1, 1999 (Due to 3 month lag between collection and distribution. the first .Y, VET dist-ibution under Ref 49 would be October 1999). ••Based on Dept of Licensing 3/98 forecast. Includes MVET and MVET in -lieu (state rental car tax) revenues. MRSC distibution has not been deducted from puh'ie safety and equalization estimates. •"Includes MVET and rate general fund dist.-ibutions. Produced by the Association of Washington Cities, 1076 Franklin Street SE, Olympia, WA 98501 (360) 753-4137 18 BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 6- -For Meeting Of 10/6/98 ITEM TITLE: Resolution expressing support for "Referendum Bill 49 - Shall motor vehicle taxes be reduced and state revenues reallocated; $1.9 billion in bonds for state and local highways approved; and spending limits modified?" SUBMITTED BY: Dick Zais, City Manager CONTACT PERSON/TELEPHONE: Dick Zais (575-6040) SUMMARY EXPLANATION: The Washington State Legislature passed legislation in 1998 that authorized submission of Referendum 49 to the voters in the November general election. Major provisions of Referendum 49 provide for the following: transfers MVET revenues from the state general fund into the motor vehicle fund to finance transportation improvements; provides a $30 dollar per vehicle tax credit; beginning in the year 2000, increases MVET distribution to the municipal sales and use tax equalization account; authorizes the City of Yakima to use general sales/use tax revenues as a match for local transit agency MVET revenues, which will result in an estimated $1.3 million in revenue for the City's Transit system annually beginning in 20011; provides new funding to distressed counties, resulting in an estimated $2 million annually coming to Yakima County beginning in 20002; and authorizes $1.9 billion dollars in general obligation bonds for state and local highway improvements. All of these changes are positive for the City of Yakima and Yakima County, and the attached resolution expresses support for Referendum 49. The provisions in the Referendum, if passed, will take effect beginning July 1, 1999. Resolution X Ordinance _ Contract Other (Specify) Funding Source City Information Systems Budget (Geneq Fund) APPROVED FOR SUBMITTAL: \�\ City Manager STAFF RECOMMENDATION: Pass the attached resolution of endorsement. COUNCIL ACTION: 1 The City will receive some money beginning in 1999, but the full $1.3 million allocation does not begin until 2001. 2 It is estimated that the County will receive between $800,000 and $1 million in 1999, based on the 6 months of the year the law will be in place. Beginning in 2000, the County is estimated to receive $2 million annually.