Editorial: Bill seeks a compromise on Sound Transit tax

By The Herald Editorial Board

Pity state lawmakers who — following passage in November of Initiative 976, which promised to cut vehicle license tabs to $30, gutting billions of dollars in state transportation funding — now must square that vote with the continuing demand from many of the same constituents to fund transportation projects and ease the slow crawl of traffic on highways and interstates.

Actually, don’t pity them; this is what they signed up for.

Yet, there is a challenge in respecting what voters wanted in I-976 by drastically cutting back the revenue from car tabs while identifying sustainable revenue to replace an estimated $1.9 billion in state construction projects and another $2.3 billion in local projects across the state — including in Snohomish County — already approved in the six-year transportation plan passed last year.

Vehicle license tabs, at least until I-976, provided about a quarter of the state’s transportation revenue, with gasoline and diesel taxes funding more than 50 percent.

But also cut down by I-976 were taxing authority for local cities and counties, through Transportation Benefit Districts for road repair and maintenance; and a major funding source for Sound Transit’s voter-approved ST3 project to extend the Link light-rail system, now under construction to Lynnwood, to Everett, Tacoma and elsewhere in the transit district in King, Snohomish and Pierce counties.

While a court challenge on the constitutionality of Tim Eyman’s initiative plays out, lawmakers have proposed a slate of bills that seeks to either put the initiative on the books completely or make finer adjustments to address some of the frustrations voiced by voters last year.

Among those bills is one by state Sen. Marko Liias, D-Lynnwood, who during a transportation committee hearing last week, talked about the conflicting messages he has heard from his constituents: “I represent a district that voted for Sound Transit 3, but voted to repeal most of the taxes that it depends on.”

Liias’ Senate Bill 6606 addresses I-976’s Sound Transit funding, seeking to keep the motor vehicle excise tax, but adjust the rate at which it as assessed. When the Legislature authorized Sound Transit to take the tax package to voters in 2016, it approved an older vehicle value schedule that allowed for a slower rate of depreciation than the one then in use by the state. The result was sticker-shock when the tax showed up on car owner’s license renewal bills following its approval.

While the tax is paid only by those within the Sound Transit district, it was a major part of the statewide campaign to pass I-976, critical of the older depreciation schedule that charged vehicle owners more.

Liias’ bill would adopt a different schedule. Earlier attempts by lawmakers to make an adjustment suggested using the Kelley Blue Book, known to those buying and selling used cars. But rather than using a third party’s formula for the purpose, Liias proposes a depreciation schedule that hews closely to Kelley Blue Book, but actually values older cars at values below it.

Liias’ bill also would allow car owners to pay their license tab fees on a monthly or quarterly schedule, by using the state’s Good to Go system that many use for paying tolls.

The new schedule would mean a drop in revenue for Sound Transit, about $1 billion through 2041, but Liias notes that the current strong economy has brought in more revenue to the transit agency than expected, $490 million since 2017, and could total $2 billion above projections by 2028. Sound Transit officials countered the $1 billion decrease in revenue would become a $2.9 billion loss over time, factoring in higher debt costs and related costs.

Sound Transit’s reluctance in losing revenue is understandable, and The Herald Editorial Board is leery of any proposal that pushes light rail’s arrival in Everett back any further than the already absurdly late date of 2036. But the absolute necessity to build some good will and public support to protect the transit improvements in ST3 requires some compromise.

That seems understood by at least one member of the Sound Transit Board. Everett City Council member Paul Roberts, who serves as the Sound Transit board’s vice chairman, said he’s heard the same conflicting messages that Liias has.

“I can tell you anecdotally what I’ve heard is that people are very unhappy with the amount that they’re paying for car tabs, but they also want the transit service. So I have to try to figure out a way to reconcile that,” Roberts said at the hearing.

Liias may have found that compromise. State Sen. Steve Hobbs, D-Lake Stevens, chairman of the transportation committee, noted during last week’s hearing that the legislation has drawn criticism from Eyman as well as from Sound Transit. “Any time you come up with something that Sound Transit and Tim Eyman don’t like, that’s a Steve Hobbs bill,” said Hobbs, who has signed on to the legislation.

The bill, however, faces a bigger challenge than the transit agency and I-976’s sponsor. Any proposed changes to an initiative, for two years after its passage, must be adopted by two-thirds of both legislative chambers.

While the courts weigh what, if any, provisions of I-976 will stand, lawmakers, Sound Transit and other transportation advocates should have time to reach a solution that finds a Sound Transit tax that is more palatable to the voters who approved it, while making sure that its trains run on time.