The Washington state legislature unanimously approved a $10.4 billion transportation budget for fiscal year 2021, avoiding at least for now the effects of last November’s successful referendum that cut a major source of funding for highway and transit projects.

Called Initiative 976 (I-976), the referendum calls for significant reductions in the state’s car-tab registration fee and curtails use of local excise taxes, including those applied in metropolitan Seattle for the Sound Transit regional transportation system. Lawsuits by the state of Washington, King County, which includes the city of Seattle, and others have so far blocked implementation of the initiative, claiming its language violates the state constitution. Though it passed statewide, Seattle-area voters rejected the initiative by a wide margin, and have in recent years supported local-only taxes for transit programs, which would take a harder hit than road and bridge projects.

But with a potential looming $454 million shortfall in the 2019-2021 biennium, Gov. Jay Inslee (D) directed the Washington State Department of Transportation late last year to pause work on dozens of capital expansion projects not yet under construction.

Those projects could be restarted by the state legislators’ action on March 11, which applies unspent money from existing budgets to offset projected revenue shortfalls should the legal challenges fail. This approach, which one key legislator reportedly characterized as “a little bit of budget magic,” likely will not be used for the next two-year transportation budget, which begins in 2022.

Meanwhile, King County Superior Court Judge Marshall Ferguson struck down on March 12 an I-976 provision requiring use of Kelley Blue Book values for calculating car-tab taxes. Ferguson, who has previously upheld other facets of the measure, gave no reason for his decision. King County and others had argued that mandating the state to enter into a single-source contract with a particular company was illegal under Washington’s constitution, and should negate the entire initiative.

Although Judge Ferguson also lifted his December injunction preventing I-976 from going forward, he delayed implementation until at least March 27, when another hearing is scheduled.