Council hesitates about costs of promised low-income car tab rebate

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When Seattle voters approved Proposition 1 to increase bus service, they agreed to a $60 increase in the price of car tabs. To balance concerns that the fee was regressive, the measure includes a $20 rebate for low-income families.

But that rebate program may be getting a $100,000 cut, a prospect that worries officials in the mayor’s office.

Individuals earning less than $22,000 or families of four earning less than $46,000 can apply for the rebate either in person, online, by phone or by mail. The rebates will come in the form of bank-issued gift cards, which will be mailed to those who qualify.

In a presentation to the Seattle City Council Transportation Committee on May 12, Christie Parker of the City Budget Office told council members they expected 51,000 applications for the rebate. Councilmember Mike O’Brien responded, “I’m very skeptical of that number.”

O’Brien's questioning draws largely on the under-utilization of the city’s utilities discount program (UDP), a 50 to 60 percent rebate on utilities bills for low-income households. Currently, only 15,000 households are enrolled. “We’ve been working for years to get people to apply to UDP and that’s hundreds of dollars" in rebates, said O’Brien.

Additionally, the administrative cost of the new car tabs rebate will run at roughly 85 percent of the benefit, which means it will cost the city $17 to provide households with a $20 rebate. “That is extraordinarily high,” said Councilmember Tom Rasmussen. “For non-profits, the administrative cost is no more than 15-20 percent.”

Early this week, Rasmussen introduced an amendment to cut $100,000 in administrative costs from the license fee rebate program. The cut would reduce the number of administrators responsible for processing applications from two to one. “My estimate is that it’s going to take a while for word to get out,” said Rasmussen. “I seriously doubt that they’re going to need two people."

In response to Rasmussen’s proposed cut, City Budget Officer Ben Noble, an appointee of Mayor Ed Murray, promptly shot an e-mail to the council urging members to reconsider. “What we worry, is that with fewer administrators, it will take longer to process applications,” Noble told Crosscut. "If you send in materials and you don’t get it back quickly, we’ll get a reputation. My honest concern is that it might become a self-fulfilling prophecy, which may discourage people to apply."

Efficiency can be a major foe of rebate programs. Because there is no uniform benchmark across all programs for households to receive low-income discounts, individuals and families must apply on a per-program basis to get a refund. And there's no opportunity for people to simply check a box at, for instance, the state Department of Licensing and receive a discount from the outset on car tabs. Unless the Washington Legislature were to set a benchmark, car-tab discounts must come in the form of rebates.

Before voters considered the measure last year, Seattle officials and supporters of the car tab fee increase regularly mentioned the rebate. Rasmussen was standing at Murray's side when the mayor unveiled the car tab proposal, including the rebate, in May of 2014.

Council members and officials from the mayor’s office agree on the need for the rebate. But, at the same time, there are questions about just how effective $20 may be. “On the one hand it’s 20 bucks,” said Noble. “On the other hand, it’s only 20 bucks.”

How many hoops are worth jumping through for $20?

Rasmussen said if demand for the program grows, the city could always add another intake administrator. In the meantime, the cost-benefit should be improved.

Noble said, one administrator or two, the program will move forward. But ideally, he said, “If this is the price of a fair and equitable fee, we’ll do it.”


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About the Authors & Contributors

David Kroman

David Kroman

David Kroman is formerly a reporter at Crosscut, where he covered city politics.