One state representative says he has a plan to reconcile anger over car tabs without harming voter-approved rail and bus projects, but Sound Transit says his proposal would still harm transit.
State lawmakers are once again considering ideas to cut car-tab taxes, raising the prospect of relief for some Puget Sound drivers and a financial blow for Sound Transit.
One proposal with support from more than two dozen House Democrats would change the way car tabs are calculated, cutting funding to Sound Transit, and then attempt to offset that cut by giving the agency a break on the costs of leasing state-owned land to build transit projects.
The bill’s lead sponsor — who struggled to get the idea out of committee last week but is still pushing for it — says it’s a way to reconcile anger over car-tab taxes without harming voter-approved rail and bus projects, but Sound Transit says the offset as proposed isn’t enough.
The debate over car tabs has simmered for two years since drivers began receiving higher bills after voters in 2016 approved Sound Transit 3, a $54 billion package that promises expanded light rail to Ballard, West Seattle, Tacoma, Everett and the Eastside, along with new bus and Sounder service. The projects will be funded by several tax sources, including car tabs.
This November, voters will weigh in on a ballot measure from anti-tax activist Tim Eyman that would cut car tabs across the state to a flat $30.
The formula Sound Transit and the state use to determine how much drivers pay in car tabs overvalues certain vehicles compared to Kelley Blue Book estimates. The agency has used that formula, which the Legislature approved, since the 1990s.
Another formula that would save drivers money was created in 2006; Sound Transit plans to begin using that formula after certain bonds are retired in 2028.
The House bill would fast forward that change, directing Sound Transit to next year begin crediting drivers for the difference between the tax they’d pay under the current formula and the 2006 formula, if it’s positive for the driver. Effectively, it would shift Sound Transit to the new formula now, instead of in 2028.
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The bill wouldn’t offer retroactive payments for car-tabs fees already paid.
It attempts to offset the loss to Sound Transit by offering the agency discounted leases on state land the agency needs to build projects. It also bars Sound Transit from canceling light-rail or bus rapid-transit projects. The bill’s 30 sponsors are all Democrats.
“I think the expansion of transit is critical, not just in my district but throughout the region,” said Rep. Mike Pellicciotti, D-Federal Way, lead sponsor on the bill, “but I also feel very strongly that taxpayers should only be taxed on the value of their property.”
The agency argues that the offset from the land leases wouldn’t be enough to cover the car-tab revenue cut. Saving money over multiyear leases wouldn’t sufficiently replace a large financial loss up front, Sound Transit representatives say.
The agency would take a $633 million hit from the car-tab change and recoup less than a quarter of that, about $147 million, from the new lease rules, according to Sound Transit. Factoring in both the offset and added debt service costs, the change would cost Sound Transit about $1.4 billion, the agency said.
The bill was scheduled for a committee vote Thursday, but lawmakers took no action because state transportation officials are still “number crunching,” Pellicciotti said.
Without a guarantee that the cuts to Sound Transit would be fully offset, transit officials and advocates worry about which projects could face delays or cuts.
“Particularly those of us at the ends of the region will suffer,” said Kristina Walker, executive director of the Tacoma transportation group Downtown On the Go, during a hearing on the bill.
Anna Zivarts, program director for the disability-rights advocacy group Rooted in Rights, worried about cuts to accessibility features or safe access to transit stops.
Pellicciotti insists he wants to protect Sound Transit projects.
Before voting on the bill, “we would want assurances from the [Washington State] Department of Transportation and Sound Transit that there would not be a delay in project delivery,” he said.
But failing to address concerns over car tabs could endanger future tax measures, Pellicciotti said.
“Whether a school levy, a future transit measure or a tax on investments, voters need to be confident that when they approve a tax increase, it’s based on the actual value of the property being taxed,” he said.
Sound Transit CEO Peter Rogoff appeared to take aim at state lawmakers on Twitter last week. “The public voted for system expansion,” Rogoff wrote. “And they continue to vote yes to our no-congestion option with record ridership. No denying the numbers.”
Other lawmakers have proposed their own car-tab ideas.
Longtime Sound Transit opponent Sen. Steve O’Ban, R-University Place, sponsored a bill to tie vehicle valuations to the Kelley Blue Book or National Automobile Dealers Association, whichever is lower, and retroactively credit drivers who paid the higher fees under Sound Transit 3.
Sen. Patty Kuderer, D-Bellevue, proposed requiring Sound Transit to create a car-tab credit for certain drivers with low incomes.
Neither bill has received a committee vote.
Meanwhile, the House Transportation Committee did move ahead on two bills backed by pedestrian advocates.
The city already uses the cameras for red lights and school zones, snapping photos of rule-breaking drivers’ license plates and mailing them a ticket. The city has struggled to enforce its bus-only lanes. Cars in those lanes can slow the flow of transit, and cars in crosswalks can create hazards for pedestrians and people with disabilities.
Under the bill, drivers would get a warning with no fine for their first violation within five years. Lawmakers limited the bill to cities with more than 500,000 people.
Another bill would add additional penalties for certain traffic infractions, like failure to yield and following too closely, when “vulnerable roadway users” — including pedestrians, cyclists, people riding animals and people driving tractors — are involved.
The bills now go to the House Rules Committee.