A bipartisan group of Senators yesterday announced that they had reached agreement on most elements of a transportation package that included authorization for Sound Transit 3. The authorized tax levels were lower than the Sound Transit request, which limits the potential size of the package and increases the reliance on sales tax. However, the agreement would still allow the agency to proceed with a package roughly the size of Sound Transit 2 (ST2).
The Senate agreement would permit up to $11 billion in tax revenue over 15 years. There is some confusion resulting from there being two different $15 billion sums in the discussion. The original Sound Transit request is for $15 billion, would provides room for the Board to explore which tax types are least unpopular and find the optimal package size.
The second $15 billion is a potential overall capital project package size, which ST staff used in an exercise and Martin speculatively mapped to projects. Staff picked this number because it was the same size as ST2 and therefore considered politically practical, but the ST board has not decided on the package’s size. Due to bond financing, a $15 billion package requires about $9 billion in taxing authority.
In other words, the lower authorization restricts Sound Transit’s options. If enacted into law, the agreement means that ST3 would be largely supported by an increase in the sales tax, with smaller increases in the MVET and property tax, and there would be much less scope to go beyond the size of ST2.
The agreement was announced at a press conference by Senator Curtis King (Transportation Committee Chairman, R-Yakima). Also participating were Senators Joe Fain (R-Auburn), Marko Liias (D-Lynnwood) and Steve Hobbs (D-Lake Stevens). In the last legislative session, the Senate failed to put forward any proposal for a transportation package, so this agreement is perceived as making it more likely that a package will pass this year.
The agreement authorizes a 0.5% sales tax, 0.3% motor vehicle excise tax (MVET), and 10 cents per $1,000 of assessed value property tax increase for Sound Transit. Sound Transit has requested higher levels for both the MVET (a re-authorization to increase the current 0.3% to 0.8% and extend it beyond 2028), and a property tax of up to 25 cents per $1,000 property value. But both Senate Democrats at the press conference were quick to explain that they would seek a larger authorization. The House bill also permits higher revenues.
Press questions focused on whether this agreement would get the support of the broader Senate. Many Republicans are opposed to tax increases, while Democrats are unhappy about changes affecting sales tax revenues from transportation projects and changes to labor rules. When asked about Sound Transit, Senator Liias pointed out that “those of us in the Puget Sound would say we need to make more progress on Sound Transit 3”, but described the agreement as a “good launching point.” Senator Hobbs emphasized there would be “continuing discussions on the size of those authorizations”.
Senator Fain was explicit in linking Sound Transit’s authorization to highway funding:
In order to get, you got to give. There’s a recognition that Sound Transit 3 is very important to our Democratic colleagues, just like finishing some of these incredibly important mega-projects are important to some of the commuters in our districts. So we’re comfortable giving the voters in the ST area an opportunity to vote on whether they want to increase their transit service as part of this larger statewide package.
On the direct spending side, Governor Inslee seeks $12.1 billion over 12 years. The Senate agreement replaces this with a spending plan for $14.9 billion over 16 years, so the spend rate is somewhat slower. The largest part of the funding would come from an 11.7 cent gas tax increase to be phased over three years beginning this summer, along with increases in vehicle weight fees and other fees. $950 million could come from state sales tax transfers, which will place corresponding pressure on other parts of the budget, although the Senators had not yet reached agreement on the sales tax issues. Unlike the transit authorization, there would be no public vote on enacting the gas tax.
The program includes $14.9 billion in expenditures through 2031. The largest items are $8.2 billion in highway improvements, $1.2 billion in preservation programs, $328 million for ferries, and a grab bag of smaller programs along with $2.5 billion in debt service.
Important highway projects in the Puget Sound region include widening I-405 from Bellevue to Renton to accommodate HOT lanes ($1.2 billion), completing the west end of the SR 520 bridge ($1.6 billion), the SR 167/SR 509 Puget Sound Gateway ($1.9 billion), and widening the highway by JBLM ($450m).
Non-highway elements of local interest include funding for expanded BRT service in Snohomish County, and authorization for Community Transit to raise their sales tax.
Governor Inslee’s preferred program is funded by carbon fees on heavy polluters. This agreement rejects that approach. No carbon revenues are included, and the bill would redirect $750m in transit and multimodal funds to the Motor Vehicle fund (to be used for highway purposes) if a carbon tax or stricter fuel economy standards are introduced.
The next step is a hearing in the Transportation Committee on Wednesday February 18.