At capacity
Metro Buses Queued in the Tunnel, Photo by Oran

One of the topics current King County Council Member Larry Phillips discussed in the Q&A that we had with him last week at our meet-up was the possibility of finding future funding sources for King County’s Metro. Metro, like many other state and local agencies, faces a massive budget crisis and may be forced to cut service in order to make up the future revenue deficit. Metro is without any way to raise new money: Metro, along with Snohomish’s Community Transit has currently reached its state-allowed limit on its taxing authority: nine-tenths of one percent sales tax collection. Even if the people of King County wanted to tax themselves to provide more bus service, state law wouldn’t allow them to.

At first it seems bizarre that Olympia wouldn’t allow voters to tax themselves to provide more bus service, but it makes a little sense when you think about it. Until very recently, no transit agency had reached the nine-tenths of a percent allocation, and before I-695 passed in 1999, these agencies were allowed to collect the motor vehicle excise tax (MVET). And it’s only now that any transit agency has faced a potential service cut.

Phillips mentioned two additional funding sources Metro could potentially go after if the state allowed. The first is the MVET that Ron Sims was pushing around the time the Alaskan Way Viaduct replacement tunnel plan was announced. The second option would be to allow some or all of the taxing authority given to county ferry districts – a property tax of 75¢ per $1000 assessed value – to be used for transit by the voter’s approval. The MVET has been a wildly unpopular tax, and attempting to use that for transit might be a disaster, but the property tax seems reasonable.

Currently the King County Ferry District collects 5.5¢ per $1000 assessed value, worth a little more  more than $18 million a year for King County, and it looks like the Ferry District in King County couldn’t ever need the entire 75¢. There are counties where ferries are crucial transportation connections, such as Island County, where state Senate Transportation Chair Mary Margarett Haugen (D-Camano Island) lives, and they may use the whole allotment. But doesn’t it make sense for the state to allow counties to use that 75¢ taxing authority on any transportation project they need? King County may not want a lot of ferries, but the voters may decide they could use more roads, buses or rail. The ability to implement a levy to build a specific project or pass a permanent tax increase to fund transit service seems like something the voters should have the right to do. Fortunately there is a bill going through Olympia right now that would enable exactly this: letting the county use some of the ferry taxing authority for transit.

The transportation leaders in Olympia, Rep. Judy Clibborn (D-Mercer Island) and Sen Haugen among others, have made it very clear that they expect the Greater Seattle area and it’s outlying communities to fund their own transportation improvements. The state relies nearly entirely on gas tax revenue to fund roads proejcts, and with people driving less, choosing more efficient cars and taking transit more, the revenues are far short of paying for all the needs across the state. That’s one of the main reasons why they pushed RTID, the now-defunct regional roads agency, so heavily and why they are fighting for “governance reform”, also known as stealing transit money to pay for roads. If Olympia expects Seattle and its neighbors to solve their own transportation problems, it needs to stop trying to push their preferred plans down onto us. I would have hoped in light of Prop. 1 first failing by a large margin with roads and transit and then passing by an even larger margin with just transit, Olympia would realize the voters here don’t agree with their vision of what our region’s transportation system should look like. Instead, they ought to provide tools to the local governments here, and allow the voters to approve the transportation plans that they want in their own communities. The 75¢ per $1000 property tax set aside for ferries seems like great tool for this purpose.

32 Replies to “Taxing Authority for Transportation Agencies”

  1. How about taxing gasoline as they do in the GVRD for Translink? Or does some of the income for transit agencies already come from gas sales?

  2. The Washington State Constitution requires the gas tax be spent on roads. There is some thought a sales tax on gas wouldn’t be subject to the same limits though expect a lawsuit if it is tried.

  3. In additional to the constitutionality questions surrounding gas taxes, people are using every less gas, because they are driving less and driving more efficient cars. The failing gas tax revenues are a huge problem, and while we could raise the taxing rate, in the long run people are going to continue to use less gas, so it’ll just be a temporary improvement.

  4. According to Ben, Olympia thinks the voters are stupid, that’s why they don’t trust them with their own taxing authority.

    1. Phillips made a good point: if we have our own higher taxes, it makes it more difficult politically for Olympia to raise state taxes. Never mind that they’re not providing the services this region needs…

  5. How much seriously would Metro need to have added to the MVET to save the system? If it is something as paltry as $20 or even as much as $50, why would most of us have a problem with this?

    I also am confused about switching money from ST2 to roads etc. – how legal actually is this and what more can we do to prevent all this? I mean – ST2 is going to go ahead, right? Someone please tell me and us that we don’t have to vote on this thing again?

    Let’s have a post summarizing on a scale of 1-10 (10 being the most likely)the likelihood of all of our favorite projects going ahead:

    Rail improvements – Second train, SEA to Vancouver, BC.
    Rail improvements – Point Defiance bypass (incl. Sounder extension to Lakewood)
    Rail improvements – Vancouver, BC switching yard improvements.
    Rail improvements – Adding Ballard and/or Broad St. as stops for Sounder and/or Amtrak Cascade trains.
    Rail improvements – Leavenworth station to be added to the Empire Builder from Seattle to Chicago.
    Rail improvements – King Street Station Phase II rennovation (station interior and ceiling replacement work).
    Rail improvements – Painting that ugly BNSF bridge across I-90 (or is this as King County project now?).

    Seattle projects – Mercer Street mess realignment and improvement.
    Seattle projects – First Hill Streetcar.
    Seattle projects – Streetcar expansion.
    Seattle projects – Alaskan Way viaduct tunnel replacement.
    Seattle projects – Spokane Street improvements.

    Metro projects – BRT corridor explansion – Aurora and West Seattle.
    Metro projects – ORCA.
    Metro projects – Holding and building on recent transit now service improvements.
    Metro projects – Funding the water taxi year round.
    Metro projects – New signs for bus stops.
    Metro projects – A healthy graffiti and maintenance budget.

    King County projects – Ferry district and ferries across Lake Washington and from Dash Point Park to Seattle.

    Sound Transit projects – ST2 for one thing.
    Sound Transit projects – Opening Link in July to Tukwila.
    Sound Transit projects – Extending Link to SeaTac Airport by December.
    Sound Transit projects – Opening the Downtown tunnel all day every day from May onwards.

    Road projects – 520 bridge replacement.
    Road projects – Hood canal bridge replacement.
    Road projects – Spokane north bypass from I-90 to Highway 2 or 20?.
    Road projects – I-90 Hyatt-Easton freeway straightening and improvements (complete with green bridges).
    Road projects – Completing I-405 expansion around Bellevue and between I-5 and SR 167.
    Road projects – SR16 to I-5 improvements in Tacoma.
    Road projects – I-5 bridge between Vancouver, WA and Portland over Columbia River.

    I realize that some of these projects are in progress but my scale should reflect the likelihood of being able to finish the projects if they have started them. Any score from 1-10 for each of these projects should reflect existing funding sources and the threat to future funding sources.

    I also realize that I am only including mega projects in this list. Obviously there are many communities that have their own projects of concern but I am not overly concerned at this point if WSDOT puts a stoplight in Lake Chelan on SR 97 or not.

    Tim

    1. ST2 is going to go ahead unless a state-wide initiative stops it. In the long run, however, the state could make Sound Transit a part of a regional roads and transit agency, which would dillute the transit portion.

      1. ST2 is going ahead, that much we know. A State initiative to stop ST2 is problematic and would be challenged in court.

        Additionally, the pro-roads camp must be cautious here given their spotty track record to-date. So far their initiatives have mainly missed their mark, and does anyone remember what happened with the RTID?

        That forced marriage of Roads and Transit was supposed to help the Roads package pass by coupling it with the supposedly more popular Transit package. What in fact happened is that the RTID went down hard, the Transit portion then re-grouped and passed ST2 by a significant margin, and the Roads portion sunk into disarray and has yet to recover and find their footing again.

        Doubt that? Re-read Chris Vance’s piece of a month or so ago.

        A new forced marriage of Roads and Transit under “Governance Reform” offers similar risks to the pro-roads camp. With high gas prices, increased transit ridership, and declining VMT it is anything but clear that this mega-agency would be more pro-roads than the current situation.

        Of course this mega-agency probably wouldn’t usurp control over regional WSDOT funding, so maybe the anti-transit folks supporting this view the downside risks differently.

      2. The Leavenworth Station is fully funded and will be under construction this summer. Vancouvers switching improvements is CN/CP/BNSF/BC’s problem, not WA State tax payers (Let BC pay for it since for the 2010 Olympics as the Cascades will be important for moving people). Point Defiance bypass should be the highest priory since it would drastically improve travel times between Sea and PDX as well as open up freight traffic around Pt Defiance. 2nd should be Sounder stations at/around the Olympic Sculpture Park and Ballard. Huge amount of lost ridership there. That would be a Sound Transit project since the Cascades is an intercity train, not a commuter train.

        First Hill Streetcar is a Sound Transit project.

        ORCA isn’t just Metro. Hence the name One Regional Card for All.

        This list you give is sort of bizarre. Some projects don’t have funding while others are almost done. The ones almost done don’t need to be ranked b/c they’re…almost done.

      3. Apologies if you think it is a bizarre list, but then most of all this is a bizarre minefield anyways. I acknowledge that most of the projects are in progress but with the state of things right now, can they in fact be completed. I am guessing yes, but with the recent posts on Seattle being short changed etc, I remain concerned.

      4. On the other hand the Vancouver, WA yard improvements are important to Amtrak and any potential commuter rail between Clark County and Portland. I’m unclear what the project status or funding is at the moment.

    2. While you mention the King County passenger ferries, you forgot to mention the Washington State Ferry system. The long term capital needs of WSF need to be addressed. If funding for new vessels is not found service will have to be cut due to a vessel shortage. Terminal improvements at Edmonds and Mukilteo are important for Sounder, ST Express, CT, Amtrak as well as the ferry system. A redeveloped Coleman Dock would help the Seattle Waterfront and provide a true inter modal transportation center.

      On to some specific projects:
      Rail improvements – Point Defiance bypass (incl. Sounder extension to Lakewood)
      I’d rate this an 8. While funding isn’t entirely nailed down there are a number of pots of money that can be used and it seems to be a priority both for Sound Transit and for Amtrak.

      Sound Transit projects – Opening Link in July to Tukwila.
      Sound Transit projects – Extending Link to SeaTac Airport by December.
      Sound Transit projects – Opening the Downtown tunnel all day every day from May onwards.
      9.5 – These projects are nearly complete with funding already allocated and the only risk is there might be a slight delay in the opening date which is why it isn’t a 10.

      Sound Transit projects – ST2 for one thing.
      7 – Funding is in place with a voter mandate. Downrated some due to the long project time lines, potential for political mischief, and unclear impact of the recession on ST2 tax collections. Projects are most likely to be delayed rather than canceled outright.

      Road projects – Hood canal bridge replacement.
      9 Project is under construction with signed contracts. Any delays will likely be due to construction problems rather than funding.

      I can’t really rate any of the rest as I don’t have a feel for funding or the political will/roadblocks associated with the project.

      1. Thanks Chris – yes, I should have mentioned the WSF plans and plans for the Coleman Dock, Edmonds and other ferry terminals.

    3. Apologies to reply to my own message, and thank you to those who have pointed out the missing links, but to add to my own list:

      Washington State Ferries – Coleman Dock and other ferry terminal expansions/improvements.
      Washington State Ferries – Ferry replacement – lots of them.
      Washington State Ferries – Adequate funding for Anacortes-Sydney (BC that is and not Australia!).

  6. Tim,

    Awesome list and I actually agree with them all. The North Spokane Bypass would be awesome (especially for a motorcyclist like myself)

    Twisties!

    Ahem.

  7. There was an article today about the Washington State Ferry system possibly asking for a renewed share of MVET to stay solvent. It quoted a frequent rider from Bainbridge as saying that you can’t raise fares to support the system, because ridership just goes down, making it unsustainable. I don’t expect transit projects to be self-supporting from fares, but is this saying that not that many people really need the ferry (or that living on an island may not be sustainable)? I’m a transit dummy, just asking.

    1. I think it means that people will move, change work patterns, or carpool if ferry rates are raised.

      The WSF will not be able to get more money without the state allowing them to, but local ferry districts are available under state law, so individual counties, eg, Kitsap or Island, could create their own ferry district and raise money via the property tax mentioned in this post.

      1. I believe Kitsap County has already created a ferry district. However I believe their efforts are directed toward passenger ferries.

        The ferry district money wouldn’t be enough to run the WSF auto ferry routes and I’m unclear on what mechanism there would be for the county ferry district to provide a supplement to the WSF runs serving Kitsap County.

        In any case even if County ferry districts can give money to WSF for runs serving the district I doubt that will take care of the ferry system’s long-term capital budget shortfall.

        The legislature needs to be held accountable for the poor financial state of the ferry system. Especially people like Sen. Haugen, who has been in the Legislature since prior to I-695, has constituents who depend on the ferry system or the economic activity it brings, and has been a member of or the chair of the committee with jurisdiction over WSF.

        Sure she talks a good game but what has she done in order to solve the problem of the ferry system literally rusting away?

    2. Fares for the Washington State Ferries have been going up every year since I-695 passed. I believe the fare increases have been the maximum 7% allowed under state law. The overall farebox recovery for the ferry system is already much higher than any other transit system. Maintenance has suffered and the ferries haven’t had a meaningful capital budget since then.

      Sure the ferry system can keep raising fares. Some people won’t have a choice but to pay. However once the fares get to be high enough some people will drive around where that is possible (everywhere but Vashon and the San Juans) or cut back on discretionary trips.

      Even if ferry fares were high enough to cover 100% of the operating and maintenance costs there is still the need for capital to replace vessels and upgrade terminals.

      1. Remember that until 1951 the ferries were privately run. From the WSDOT website on WSF history, “When the ferry system was first purchased by the State from the Puget Sound Navigation Company, it was intended to finance itself solely through the fare box (revenues).”

        Given the general condemnation of folks on this site for “roads that encourage sprawl” I’m confused as to why the strong support for ferries. Especially since the vast majority of ferry riders either drive on or have beater “ferry cars” parked at one (or both) ends.

      2. Actually the original plan for the ferry system was to replace the ferry runs with toll bridges. Except for Hood Canal that didn’t really happen.

        The ferry system is an essential transportation link for many communities.

        There are basically 4 different types of ferry users:
        Commuters: People who live on one side of a ferry run and work on the other. Most people using the central Puget Sound runs for commuting don’t take their cars across. Some may have a car on both sides, but many only have a car on one end or the other. Many people bike, walk, take transit, or get a ride on one or both ends.
        Tourists: People traveling for lesuire, often heading for the Olympics if using the cross-sound runs. Tend to bring a vehicle with them.
        Non-commuter Residents: People who live on one side of a ferry run and make trips to the other side for reasons other than employment. Things such as shopping, medical appointments, going to a concert, sports games, etc.
        Commercial: non-commuter business traffic. Freight, deliveries, service calls, etc.

  8. I never remembered hearing debates like this when I lived in Minneapolis, so I finally got around to looking up the funding apportionment there: “Metro Transit currently collects roughly 35 percent of its budget from fareboxes, 60 percent comes from state appropriations and motor vehicle sales, and the remainder is from federal and self-generating sources.” [metrotransit.org]. I would imagine the state appropriation there is a lot easier since Minnesota has a (large) income tax. I’d suggest that Washington could use an income tax, but I know better than to bring up that issue.

  9. “Regional policy requires that a third of Metro Transit’s operating budget be generated from customers.”

    Wow, 35% of the budget from fares. That’s a big percentage. If KC Metro could start doing that there wouldn’t be a shortage. Fares in Minneapolis are comparable to Seattle but they’re covering double the percentage of operating cost.

    Transit Fares
    Non-Rush Rush
    Local Fare $1.75 $2.25
    Express Fare $2.25 $3.00

Comments are closed.