The car-tab tax issue has been roiling since last year, when the tax increases for Sound Transit 3 went into effect and more than tripled the rate of car-tab taxes. Here’s how measures to fix that failed again.
For the second consecutive year, the Washington House of Representatives passed a bill to cut car-tab taxes.
For the second consecutive year, the Washington state Senate passed a bill to cut car-tab taxes.
For the second consecutive year, Puget Sound-area drivers will not see a reduction in their car-tab taxes and Sound Transit will not see a cut in its funding as it pushes to expand light rail in the region.
The House and the Senate failed to come to an agreement on car tabs Thursday night as the 2018 legislative session came to a close, despite both chambers and both parties professing their desire to cut the taxes.
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On the last day of the session, Democrats claimed they’d found a deal that could pass and blamed Republicans for threatening to delay a vote right up until the midnight deadline.
Republicans said the plethora of amendments they were proposing weren’t intended to stall a deal, but to make more significant changes. And, they pointed out, Democrats were in charge and could have scheduled a vote before the session’s final day.
The issue has been roiling since last year, when Sound Transit 3’s tax increases went into effect, more than tripling the rate of car-tab taxes.
And while voters approved ST3, choosing to raise their own taxes, many expressed outrage at the way car-tab taxes are calculated.
Sound Transit has long used a formula it inherited from the Legislature that inflates the values of cars that are less than 10 years old. The inflated values, in turn, lead to tax bills that can be significantly higher than many drivers expect, based on the Blue Book values of their cars.
Last year, with Republicans controlling the state Senate and Democrats controlling the state House, both chambers passed bills to fix the formula. But Republicans wanted to go much further, and their bill also slashed in half the rate at which car-tab taxes are levied.
Democrats refused to go along with what would be drastic cuts to Sound Transit’s financing, imperiling the agency’s ability to complete its promised projects.
This year, with Democrats in control of the Legislature and the governor’s office, they again tried to tackle the issue. Again, they failed.
The House passed a bill rejiggering the formula. Sound Transit said that move would cost it $780 million in direct funding but nearly $2.3 billion with higher borrowing costs included under the agency’s plans to take on more debt to make up for the drop in revenues.
Sound Transit has lobbied for any funding cuts to be replaced either with new revenue or with cost-saving measures for the agency.
The Senate wasn’t comfortable with the size of the cuts passed by the House. So it passed a bill making the same changes to the formula, but proposed backfilling some of the cuts by exempting Sound Transit from a special sales tax levied on its construction projects.
That would save the agency $518 million, but that money had been slotted to go toward unspecified education programs in King, Pierce and Snohomish counties, and there was reluctance in the House to raid that fund.
Rep. Judy Clibborn, the chair of the House Transportation Committee, said she thought a deal had been worked out Thursday as the session was coming to a close.
Clibborn’s plan would have saved Sound Transit some money by letting the agency defer a charge it pays to the state Department of Revenue for collecting the taxes.
Clibborn, D-Mercer Island, said she thought she had a handshake deal with the Senate to proceed with her plan, but that House Republicans threatened to scuttle it by delaying a possible vote until midnight Thursday, when the session was scheduled to end.
“We worked on it up until about 6 o’clock; we were getting into the last hours,” Clibborn said. “Republicans said they would filibuster until midnight, and we had other things that we needed to do.”
House Republicans had filed about 10 amendments to the bill, all with virtually no chance of passage. One, for instance, would cut the salary of Sound Transit CEO Peter Rogoff to the median income of transit passengers.
“It was pure politics at the end,” Clibborn said. “They just wanted to get on the floor and filibuster about how bad Sound Transit was.”
Republicans say that’s ridiculous and emphasize that Democrats now control both houses.
“The bill’s been on the run calendar for a month; my understanding is there was disagreement between the House and the Senate Democrats and it was down to the stripping of the education funding,” said Rep. Mark Harmsworth, R-Mill Creek.
“This wasn’t a filibuster, this was just a floor debate they didn’t want to have, I guess,” he said. “There was plenty of time.”