TACOMA — The simmering battle surrounding Sound Transit car tabs is entering the legal arena.
Seven residents, including three from Snohomish County, filed a lawsuit in Pierce County on Tuesday aimed at erasing the car tab increase approved by voters in 2016 and refunding the roughly $240 million that’s been collected from it.
Those taxpayers from the agency’s three-county service area contend in the lawsuit that the increase in the Motor Vehicle Excise Tax rate isn’t legal because it resulted from an unconstitutional provision in the state law allowing Sound Transit to put its current expansion plan on the ballot.
“In our view the constitutional remedy is to eliminate the section which authorizes the levy,” said attorney Joel Ard, of Bainbridge Island.
He and attorney David DeWolf, of Spokane, filed the case on behalf of the residents, which include Roger and Mary Struthers, of Mukilteo, and Frank Maietto, of Snohomish. All three Snohomish County residents have backed car tab limiting initiatives pushed by Tim Eyman, of Mukilteo.
“I feel we were misled by Sound Transit and I feel they lied to the people about what it was going to cost,” Mary Struthers said Wednesday.
The lawsuit targets a piece of the financing package for Sound Transit 3, the $54 billion expansion that passed in November 2016 on the strength of support in Snohomish and King counties. It was rejected by voters in Pierce County.
It adds 62 miles of new Link light-rail line, including an extension to Everett Station by 2036, via Paine Field.
To pay for the upgrades, the sales tax went up half a percent within the district. There’s also a new property tax assessment of 25 cents for each $1,000 of assessed valuation. And the tax rate for figuring car tab fees went from 0.3 percent to 1.1 percent.
The lawsuit does not affect the sales and property taxes approved by voters.
It does seek to roll back the car tab fee to 0.3 percent, which would deprive the agency of a cornerstone of its funding.
“The lawsuit seeks to eliminate Sound Transit’s ability to collect voter-approved MVET revenues,” Sound Transit spokesman Geoff Patrick said in a statement. “We are confident in the validity of the law and will be reviewing and responding to the lawsuit.
“Since voters’ decisive approval of ST3, highway congestion has only worsened, and it will continue to worsen,” the statement continued. “Any reduction of MVET revenues would delay or kill voter-approved transit alternatives.”
When the car tab fee increase took effect in March 2017, it triggered widespread sticker shock as some vehicle owners reported their bills nearly tripled.
A contributing factor is the transit authority’s calibration of car tab fees using a 1996 depreciation schedule that tends to overvalue older vehicles. That is the schedule Sound Transit used after voters approved its original 0.3 MVET rate.
Lawmakers drew up a new depreciation schedule in 2006 that better reflects a car’s actual value. But in the 2015 law clearing the way for ST3 to go to the ballot, they allowed Sound Transit to keep using the older depreciation schedule until 2028.
Amid backlash from the public, lawmakers have tried unsuccessfully to pass a law forcing Sound Transit to either start using the newer depreciation schedule sooner or figure out how much money vehicle owners would save under the new schedule and send them a check.
The lawsuit takes a different tack. It targets a certain paragraph in the law, saying the wording doesn’t pass constitutional muster because it does not identify a valuation schedule.
“It is really about making sure legislators know what they’re voting on and the citizens can keep track of what the legislators are doing,” said Ard, the attorney. “In this case, nobody monitoring the bill would know how they are changing the law.”
The lawsuit was filed against Sound Transit and the state, which collects the car tab fees on behalf of the agency. Each has 20 days to respond. The court must certify the case before it attains class-action status.
Herald reporter Noah Haglund contributed to this story.