All session, legislators threatened to repeal voter-approved transit taxes, throw Sound Transit into organizational chaos, or at best ignore transit as they focused on education. Miraculously, as the session is ending all threats have retreated. Instead, transit agencies statewide gained a small amount of revenue as a side effect of wider tax reform.
There were three bills relevant to transit in late action.
HB 2163 passed the legislature and is on the way to the governor’s desk. This bill finds funding for education by, in part, extending sales taxes to more online purchases and repealing the exemption for bottled water. This increases the revenue base for all Washington governments and agencies that collect sales tax. This spreadsheet shows the annual impact of the bill for everyone in the state.
|Jurisdiction||FY 2018||FY 2019||FY 2020||FY 2021||FY 2022||FY 2023|
|Estimated Remote Sales Revenue||Estimated Remote Sales Revenue||Estimated Remote Sales Revenue||Estimated Remote Sales Revenue||Estimated Remote Sales Revenue||Estimated Remote Sales Revenue|
|EVERETT TRANSIT SYSTEM||153,000||469,000||584,000||633,000||687,000||746,000|
|KITSAP COUNTY PTBA||269,000||826,000||1,028,000||1,115,000||1,210,000||1,313,000|
|KING COUNTY METRO TRANSIT||4,390,000||13,484,000||16,790,000||18,210,000||19,762,000||21,444,000|
In the first full year of collections, Fiscal Year 2019, Sound Transit nets another $30m in sales tax revenue and Metro yields $13m. This money is not transformative*, but $13m per year is 100,000 annual service hours — about what it took for Metro to upgrade five conventional bus lines to RapidRide A through E.
Sound Transit’s 2017 budget projects over a billion dollars in sales tax revenue, out of $1.6 billion in total revenue (p. 14).
SB 5883 is the budget, already signed by the Governor. The bill contained a diversion of Sound Transit sales tax funding from ST to the state’s general fund, by mandating a 1% collection charge on Sound Transit’s portion of sales tax by the Department of Revenue. The governor vetoed that section of the bill. In his veto message, he stated:
This subsection requires the Department of Revenue to renegotiate its contract with Sound Transit for the collection of sales tax. The department is required to charge Sound Transit an administrative fee of 1 percent, which is more than is charged under the current contract. This will reduce the funding available for Sound Transit to deliver the voter-approved transit package. For these reasons, I have vetoed Section 136(2).
This was one of 13 sections the governor vetoed in the bill.
Lastly, HB 2201 — the attempt to
repeal reduce the value of voter-approved MVET increases — does not appear to have made it out of the legislature, preserving approximately $2 billion ST needs to make sure it can deliver in the event of another economic downturn. We’ll continue to watch it until the session ends.
Brent White contributed to this report.
*In the last recession, Metro sales tax revenue fell by $70m and was over $100m below expectations.