SENATE BILL REPORT

SB 6376

BYSenators Nelson, McMullen, Metcalf and Bender; by request of Governor

Perpetuating the additional motor vehicle excise tax credited to the Puget Sound ferry operations account.

Senate Committee on Transportation

Senate Hearing Date(s):February 5, 1988

Majority Report:  That Substitute Senate Bill No. 6376 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Patterson, Chairman; von Reichbauer, Vice Chairman; Barr, Bender, McMullen, Metcalf, Owen, Sellar.

Senate Staff:Robin Rettew (786-7306)

                  February 5, 1988

AS REPORTED BY COMMITTEE ON TRANSPORTATION, FEBRUARY 5, 1988

BACKGROUND:

A temporary .1 percent increase in the Motor Vehicle Excise Tax was passed last session to help fund the ferry system operating budget through this biennium. The .1 percent will generate about $21 million in 1987-89. The temporary rate increase is scheduled to sunset in December 1989.

Without this temporary increase the ferry system would have required, once again, a transfer from the Capital Construction Account to the operating budget in order to maintain a fare/subsidy ratio of 70/30 percent.

SUMMARY:

The .1 percent Motor Vehicle Tax increase is made permanent. It will bring in about $21 million in 1987-89, $25.3 million in 1989-91, $37 million in 1991-93, and $42 million in 1993-95. A permanent revenue source will permit long range ferry system planning to be accomplished, eliminate the need to transfer funds from capital to operating programs, and, begin the process to achieve a 60/40 percent fare to subsidy ratio.

The Department of Transportation is required to submit to the legislative transportation committee a report on the impact of the additional tax on ferry routes, proposed fares, subsidy ratios, and capital plans.  The report is due twice, first on September 30, 1988 and the second on September 30, 1992.

EFFECT OF PROPOSED SUBSTITUTE:

The .1 percent Motor Vehicle Excise Tax increase is extended until December, 1990.  The Department of Transportation study is eliminated and a joint committee is created to study the Motor Vehicle Excise Tax.  The committee is composed of 15 members.  The chairperson of the House and Senate Ways and Means and Transportation shall each appoint three of their members to the joint committee.  The Director of the Office of Financial Management shall appoint three staff members to serve on the joint committee.

The joint committee shall report its findings, and any recommended changes, to the House and Senate standing committees on Transportation and Ways and Means by November 1, 1988.

Appropriation:    none

Revenue:    yes

Fiscal Note:      none requested

Senate Committee - Testified: Bob Benson, Office of Financial Management; Steve Lindstrom, Washington State Transit Association; Marty Sangster, Washington Trucking Association; Joann Young, Ferry Rider Coalition; Bob Dysert, Ferry Rider Coalition