Judge Does Not Rule on Burien's Claim that Measure Illegally Impairs Burien’s Bond Contracts
In November 2019, a majority of Washington voters approved Initiative Measure No. 976 (I-976), which would car tab taxes. On November 14, 2019, a group of Washington counties and cities, including the City of Burien and joined by several transit and environmental groups, filed a lawsuit declaring I-976 unconstitutional on several grounds and calling for a halt for the measure from going into effect. On November 27, 2019, the King County Superior Court entered a preliminary injunction barring I-976 from going into effect while the lawsuit is pending.
On February 12, 2020, King County Superior Court Judge Marshall Ferguson rejected most of the arguments Seattle, King County, and others made that I-976 was unconstitutional, however he did not rule on the City of Burien’s claim that the measure illegally impaired Burien’s bond contracts.
What does this mean for implementation of 976?
As of February 12, 2020, the initiative will remain on hold because the judge’s ruling does not “dispose of all” the claims made by King County, City of Burien, and others. King County and others have vowed to appeal the decision until a decision is granted by the Washington State Supreme Court.
Impact of I-976 on City of Burien Budget
Council passed a resolution in opposition to Initiative 976 on May 20, 2019. The initiative eliminates revenue the City receives from the Transportation Benefit District (TBD) tax, established in 2009 for the purpose of financing, constructing, and otherwise facilitating street improvement throughout Burien.
At the time, the City of Burien issued limited tax general obligation bonds to provide long-term financing for these street improvements. In 2010, an agreement was signed that allowed the city of Burien to impose and collect a $10 vehicle fee, and pledged the vehicle fee revenues toward the payment of the bonds. The City pledged to the bondholders that they could rely on the revenue from the vehicle fee revenue in order to repay the bonds.
Without the revenue from the $10 vehicle fee, money would potentially need to come from the City’s General Fund to cover the debt service. This would negatively affect the City’s ability to deliver other essential services.
In 2018, the City received around $785,000 from the $20 TBD fee. Revenue collected from the first $10 fee pays for debt service issued for prior street overlay projects. The remaining $10 is used to fund the pavement management program.