Somers, Sound Transit board: Excise-tax fix is ‘complicated’

SEATTLE — Leaders from Sound Transit on Thursday acknowledged the anger they’re hearing over a steep increase in car tab fees that took effect this month, but said they might be unable to deliver key light rail and commuter bus projects without the money.

The agency’s governing board unanimously approved a resolution tasking CEO Peter Rogoff and his staff to work with state lawmakers on the issue. A major concern has been the use of a formula that bases the motor vehicle excise tax on artificially high car values. Tinker with that formula, board members warned, and the agency risks delaying or derailing projects they promised to deliver.

“We’ve made an obligation, we’ve made a commitment to voters and the voters passed that,” said Snohomish County Executive Dave Somers, who serves as Sound Transit’s board chairman.

Somers said the resolution seeks to address “a complicated problem that needs thoughtful analysis.”

Professional initiative promoter Tim Eyman, who spoke to the board during a public comment period, was in no mood for nuance. The Mukilteo man gained renown and notoriety in the late 1990s by pushing a successful initiative to curb Washington’s pricey car tab renewals.

“Sound Transit is ripping us off,” Eyman said. “And you know it. And you’re doing nothing about it. Worse, you’re blocking efforts to fix it. It’s maddening. It’s infuriating.”

It was the board’s first meeting since higher car tab fees took effect March 1. The motor vehicle excise tax rate nearly quadrupled from 0.3 percent to 1.1 percent. ST3 also increased sales tax and added a new property tax.

The taxes are part of the $54 billion Sound Transit 3 measure that voters approved in November. It passed in Snohomish and King counties, but failed in Pierce County. The district extends from Everett south, taking in most of the urban areas in the three counties.

ST3 aims to build out projects over a quarter century. It would deliver light rail to Everett by 2036, with other new routes reaching Tacoma, West Seattle, Ballard and Eastside cities. It also includes a new rapid-transit bus line along I-405 between Lynnwood and Burien slated for completion in 2024.

Attacking Sound Transit has made for good sport in Olympia during the ongoing legislative session.

Lawmakers have proposed at least a dozen bills that aim to reform the agency, particularly how car tab fees are calculated.

“Some would do extreme damage to our revenue stream and our ability to deliver projects to voters,” Rogoff said.

Sound Transit calculates motor vehicle excise tax using a depreciation schedule drawn up in the 1990s, in which the car’s value dips 5 percent or 6 percent a year. The Department of Licensing updated its depreciation schedule in 2006. It shows a car loses 19 percent of its value after one year, 55 percent after five years.

By law, Sound Transit must switch entirely to the newer schedule in 2029 when bonds from the first two phases of expansion are retired. Those were sold with an assumption of car tab collections tied to the older schedule.

Bills pushed by Republican lawmakers would force Sound Transit to change sooner and begin using car values from Kelley Blue Book or the National Auto Dealers Association.

Democrats have sponsored bills to encourage Sound Transit to offer rebates to low-income taxpayers and to send out yearly “taxpayer accountability statements.”

A Republican-backed bill passed in the Senate would change the governing structure of Sound Transit’s board to 11 directly elected members representing geographical districts. The board now has 17 members made up of elected city and county officials plus the state transportation secretary, who would remain as a non-voting member in the restructuring bill.

Thursday’s meeting also was the board’s first since President Donald Trump released his “America First” budget March 16, in which he proposed gutting federal transit programs that Sound Transit was counting on for more than $5 billion in funding. If that budget were to take effect, the most immediate effect for Snohomish County could be the loss of a more than $1.1 billion grant to help build light rail to Lynnwood. The project had been slated for completion in 2023 and the grant had appeared to be all but assured.

“Obviously we are hoping the Congress will reverse this decision,” Rogoff said.

Sound Transit staff have been talking to Washington’s congressional delegation, trying to make that happen.

Noah Haglund: 425-339-3465; nhaglund@heraldnet.com. Twitter: @NWhaglund.

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