The Legislature must fix the flawed vehicle valuation formula used by Sound Transit. This can be done without jeopardizing work to expand bus and passenger-rail service in the Puget Sound region.
Washington state House Speaker Frank Chopp supports fixing the flawed formula that Sound Transit uses to calculate its motor vehicle excise taxes. That’s good news, and the rest of the Legislature should join him.
Right before the 2018 Legislature convened, Chopp said fixing the MVET formula was a priority.
This should be done without “paying off” Sound Transit, as other lawmakers and the agency have suggested, or cutting parking facilities that were promised to voters who approved Sound Transit 3.
The entirety of Washington has no obligation to provide sweeteners, such as discounted state land, to fix a policy glitch affecting only residents within Sound Transit’s taxing district.
Sound Transit can absorb the cost of this fix without delaying its work. This can be done by using contingency reserves, cost savings or unexpectedly high tax revenues.
Using a better valuation system, such as the state’s standard MVET formula instead of the relic that ended up in the ST3 tax package, would cost the agency $780 million, or an average of $78 million in each of the next 10 years.
For perspective, that’s less than 1 percent of ST3 costs. This phase of transit work is billed as a $54 billion project, but financing, capital and operating costs will exceed $70 billion by 2066 when its bonds are paid off.
Opponents of an MVET fix suggest the change would be catastrophic, as if ST3 is too fragile to touch. That’s incorrect and falsely impugns Sound Transit’s financial planning.
To its credit, Sound Transit has improved planning after major stumbles in its first phase. ST3 includes hefty reserves for contingencies, multiple revenue streams and vetted forecasts. In other words, there’s plenty of wiggle room.
The $54 billion plan isn’t carved in stone. Sound Transit expects fluctuations with the economy, costs and unexpected developments.
Federal transit contributions are a question mark under President Donald Trump, but his term ends in three years. ST3 capital projects come on line between 2024 and 2041. There will be 11 more presidential terms before they are paid off.
In the near term, Trump may have inadvertently boosted ST3 funding. Federal tax cuts should increase income and business spending, the state economist said last week. That should increase sales taxes that provide most of Sound Transit’s funding.
Fixing the MVET formula is also needed to restore trust in Sound Transit and the Legislature.
This is important as the agency begins a 25-year building spree that will tax the public’s wallets and patience in many ways. Why start out on a sour note?
The Legislature made mistakes when it authorized the ST3 tax package in 2015. Using an outdated MVET formula is a fixable and forgivable oversight.
Lawmakers also thought they were authorizing a $15 billion transit measure, but the law was written in a way that enabled Sound Transit to increase the ST3 ballot measure to $54 billion.
Far more will be spent because Sound Transit is now authorized to collect taxes forever. Over time, the cost of fixing its MVET formula will be less than a rounding error.
Fix the formula. This won’t jeopardize plans to increase bus and light-rail service in the Puget Sound region.
It will, however, demonstrate that Sound Transit and the Legislature are responsive to the public and concerns about tax fairness.