Why lawmakers failed to fix Sound Transit’s taxing boundary

OLYMPIA — What was supposed to be an easy fix for property owners stuck partway in the Sound Transit taxing boundary never materialized in the state capitol.

It was one of several pieces of unfinished business for the Legislature, which went home last month after a third special session. Lawmakers failed to pass a capital budget or resolve important questions about rural water rights. Unlike those larger and thornier issues, solving the boundary question was supposed to be simple.

State Rep. Mark Harmsworth sponsored a bill that won unanimous support in the House three separate times, only to die in the final session. House Bill 1958 would have barred Sound Transit from levying property tax on anything less than a whole parcel inside the agency’s taxing district.

“It’s really disappointing because the bill is nonpartisan,” said Harmsworth, a Mill Creek Republican. “Everyone seems to want to fix it.”

It would have helped about 50 property owners in Snohomish County, and many others along the transit agency boundaries in King and Pierce counties. One hiccup in Olympia came when the state Department of Revenue informed lawmakers that a provision to refund taxes already paid would run afoul of the state Constitution and needed to be changed.

The problem arose after the $54 billion Sound Transit 3 package was approved by voters in November. The measure set out to fund 62 miles of new light-rail track in Snohomish, King and Pierce counties, including a line to Everett by 2036. It included bus rapid transit along I-405 and other improvements.

To pay for it, the measure included a new property tax of 25 cents per $1,000 of assessed value. ST3 also triggered a half-cent rise in sales tax and a 0.8 percent hike in car-tab fees.

When it came to the new property tax, several dozen Snohomish County property owners found themselves in a weird predicament. Sound Transit’s outer limit passed through part of their property, but they’d never been considered inside the district or had the chance to vote on it.

George Murray was one of them. He owes $13.15 in Sound Transit taxes on part of his property in an unincorporated neighborhood east of Mill Creek.

“I’m really dumbfounded at how this could happen with something that’s such an easy fix,” Murray said. “They nickle and dime you … It’s a cumulative effect on everyone.”

Sound Transit’s district lines generally follow city limits or urban-growth boundaries in unincorporated areas. Some neighborhoods were built after those lines were drawn in 1996.

Solving the boundary problem may have gotten confused amid an unrelated uproar over an outdated formula that Sound Transit used to calculate car-tab fees. The formula overvalued used car prices, inflating fees and infuriating many a car owner.

Professional initiative promoter Tim Eyman recently launched a campaign to reduce car-tab fees to a flat $30, which would gut Sound Transit funding. It could appear on the November 2018 ballot if it gets enough signatures.

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

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