Gov. Jay Inslee

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
SOUND TRANSIT  9,629,000   29,577,000   36,830,000   39,945,000   43,349,000   47,039,000 
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 
COMMUNITY TRANSIT  788,000   2,421,000   3,015,000   3,269,000   3,548,000   3,850,000 
PIERCE TRANSIT  594,000   1,825,000   2,273,000   2,465,000   2,675,000   2,903,000 

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.

32 Replies to “Somehow, Transit Wins in Olympia”

  3. Seems as though, projecting the additional Sales Tax revenue, by 2030 Sound Transit would collect almost $800 million more in funds.

    That’d almost make up for the lack of Grants for Lynnwood lol.

    I wonder if this would be a tangible enough increase in funding to speed up st3 projects…

  4. My understanding is that the online sales tax is a flat 6.5% across the state. I’m guessing that means no extra money for ST. The flat tax is there to get around the 1992 supreme court decision on mail order sales tax being too complicated. Still, it’s far from certain whether the tax will get implemented or how it will be enforced.

    1. The chart is from a source in the legislature. It’s possible they’re themselves confused, but for now I’d bet on it.

  5. To confirm, HB 2201 was the bill that would change the MVET from the original valuation schedule to the new and lower valuation schedule, but it’s not repealing MVET outright? That bill seems to be wildly popular with the general public, and passed the House by a wide margin. How did it not make it out of the legislature?

    1. Thanks, I reworded it. Legislating is change and things happen for no obvious reason.

    2. We know the bill was wildly popular because…. (I promise I’m not being snarky. Just wondering if there’s been an actual poll or something.)

    3. … the people we know are taking about it. When you hear actual people saying the same thing that’s in the news and legislators say they’re getting a lot of calls about, it suggests it’s a widespread attitude.

      1. I live & vote in Okanogan Co (although our car is registered in King Co,so we pay the ST MVET). I mostly monitored the popularity of ST3 via the comments in the Seattle Times leading up to the election in November. Turns out, those commentors were’s a representative sample of the voters in the ST region. My guess is that people calling legislators to complain aren’t necessarily representative, either.

      3. Emily, the commenariat over at The Seattle Times’ websits are a valid sample only of bitter Euro-American guys seriously torqued by their loss of inherited privilege

  7. I’m just going to say this because I don’t wanna start a flame war, pick trouble or get banned from here – take your pick – but as much as I disagree with the general perception here on certain reforms, I am damn happy we got some sales tax loopholes closed.

    I am worried about MVET depreciation schedules and on that other matter, all I’m going to say is Senator O’Ban is going to hold hearings this fall on Sound Transit 3. So no spiking the football folks – at least not in public. I expect another attempt at Sound Transit reform in 2018.

    Special thanks to Transportation Choices Coalition for holding the line so far – and getting us a big win. The county level transit agencies & Everett Transit must be happy.

    Very respectfully;

    Joe A. Kunzler

  8. After 2018, they are using a 10% CAGR, which seems either lazy or optimistic. But assuming a modest 5% discount rate, the 20-year NPV of this revenue stream is over $1B; not exactly couch change. I’m not a ST finance expert, but this is a significant stream of revenue to bond against. The question is, what will they do with it to improve service? Tunnel under Salmon Bay? Give DT to Ballard the Corridor D that everyone wants? Apply towards UW to Ballard?

    1. Not “everyone” wants Option D with its even deeper than Beacon Hill station. A version that had a station under Dexter about Galer might be a winner, but Upper Queen Anne will be frozen in amber for a good while yet.

      1. There’s major development already in Upper Queen Anne and more major development on the way. If this established walkable neighborhood commercial area is on the way to Ballard, why not try to serve it?

      2. Because the station would be extremely deep and expensive, and the top of Queen Anne hill will never be anything like Adams-Morgan. If you want to serve Fremont, get there by the east side of the hill. A station would be 100 feet shallower and the neighborhood served already high density.

      3. Fremont is ten times larger than upper Queen Anne. I wrote an article about Queen Anne’s unique opportunity back in the day. Queen Anne didn’t take up the opportunity. Unlike Issaquah, which begged and begged for Link and upzoned an urban center for it, Queen Anne has tried to keep density as little as possible. The biggest thing I see up there is a Trader Joe’s plaza. That’s about as little as you can get, and it’s in sharp contrast to lower Queen Anne which will have a station.

      4. Upper Queen Anne is a designated Urban Village. What is the purpose of creating that designation if not to direct growth and transit to specific areas? And of course UQA won’t be Adams Morgan, but it will be a lot closer to it than Interbay.

        I’m perpetually amazed by people who think it’s a bad idea to connect Seattle’s Urban Villages with fast, reliable, rail service. The rewards for the city and future generations clearly outweigh the risks of digging a deep station.

      5. Mike,

        New idea. With these new funds, we can build the Corridor D alignment but omit (for now) an expensive and risky UQA station. This still hits LQA, Fremont and Ballard, with the potential to add infill stations in a future ST4. I understand how the sausage gets made and that Queen Anne just hasn’t organized around a station. But it is an Urban Village, and like Georgetown in DC, I’m confident they’ll regret passing on this historic opportunity.

      6. I agree that Intetbay is sub-optimal, but it does have Smith Cove which will be a big stop.

        If there is to be service to Fremont, it should go via Dexter where there is a wall of high rises with more to come.

    2. Applying it to a UW to Ballard subway would be far the best value. With all due respect to Corridor D, it really wouldn’t fundamentally change the dynamic of the city the way that Ballard to UW would. Upper Queen Anne is an OK stop (nothing wrong with it) but the deep tunnel makes it less than optimal. More to the point, you are once again spending a huge amount of money for very few stops (there would be no stop on north Queen Anne, despite the density and SPU). Meanwhile, connecting Fremont to downtown in a faster manner is always nice, but for a lot of Fremont, would not be that much faster than the E. Lower Fremont, while being wonderfully fun, does not have huge numbers of people. As with much of the city, the key is bus to rail interaction, and for that, heading east-west is the way to go. A Ballard to UW subway would immediately transform a trip that seems to take forever into a short hop. Let me repeat what I’ve said way too often: It would be faster than driving, even in the middle of the day! You connect up the second biggest destination in the state (the UW) while providing for many a faster route to downtown (only two minutes slower from Ballard than what they will end up building).

      Of course the problem is, how to start? If ST gets a bit more money, I just don’t see how you can build a starter line for Ballard to UW. From the U-District Station (e. g. Brooklyn) to 15th and Market is your starter line. Then you send it out to 24th NW. Eventually you send it out to U-Village and Children’s. But building a line from say, UW to Fremont is better than nothing, but not by much. Who, for example, would want to take a four seat ride from Ballard High School to Capitol Hill (take the D south to the truncated 44, then get on the train, then transfer to another train (because ST never heard of a spur junction))? No, the Ballard to UW is kind of an all or nothing thing. At the very least it should serve Brooklyn and 15th NW.

      If ST is smart, they will simply use the money to build better stations. Not grandiose stations, with bold buttresses, but simply more functional ones. Just make it possible to get off the bus and get on the train. After all, that is what most people will do, if we are lucky.

      1. I’m pretty sure that it would be both illegal and ineffective to directly apply the money to Ballard/UW. However, every improvement in ST’s financial position will either be (1) spent on nice-to-haves or (2) pay down the bonds faster. The latter should, in principle, accelerate entirely new lines.

  9. Hopefully they use this to invest in more service, they NEED more service. Its nice to see the local agencies get more money as well, some like PT desperately need it.

  10. It seems obvious in hindsight that all 75 people in Puget Sound who really cared about the tabs and Sound Transit “governance” were spending their days ranting on The Seattle Crimes’ website, Crosscut and KOMO.com.

    The rest of the world has moved on and hopes that Sound Transit does too.

    1. #76 who wants all transit boards elected won’t move on. I don’t wanna pick fights, but some of us who support elected boards do so because of experiences beyond Sound Transit or old grudges over some aspect of ST3.

      Respect that please.

      1. What about the current structure doesn’t work for you Joe? Why does it need to be changed so badly?

  11. With the approval of the 2017-19 collective bargaining agreements all King County State employees are now able to get an Orca card employer pass. This was a win for Transit and state employees like myself who paid for buses to work out of pocket.

  12. Pingback: With Seattle Transit Funds Under Siege By State Legislators, the Governor Rides to the Rescue – Streetsblog USA

  13. Good news about the added funding. I’m not surprised about the car tabs issue. It was a political matter, much like the anger over the HOT lanes. Some politicians were able to vent; other politicians said they had a point; but eventually, when the dust settled, nothing happened.

    Next time there is a proposal for raising car tabs though, my guess is they use the new formula. :)

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