by REP. JOE FITZGIBBON
The 2017 legislative session was a difficult, defensive session for transit. None of the Legislature’s transit advocates expected this after the unequivocal mandate for Sound Transit 3 in November 2016, but the combination of MVET sticker shock and inaccurate vehicle valuations forced us into difficult positions as we fought to fulfill the promise of a regional transit system. The battles often felt like losses at the time. But thanks to the intransigence of Senate Republicans dead-set on damaging Sound Transit, and the end of wasteful sales tax exemptions, we ended the session with more funding for core transit services, not less.
The debate over Sound Transit’s Motor Vehicle Excise Tax (MVET) authority was one of the most challenging parts of the session. Our exceptionally difficult vote disappointed many transit advocates back home. But by constraining that inevitable debate to a rational but hard bottom line, we managed to end the session with more wins for transit than losses.
The House passed HB 2201, which required that Sound Transit revise its MVET collections to reflect the vehicle values adopted by the 2006 Legislature (RCW 82.44.035), instead of the earlier valuation table from the 2015 transportation package. HB 2201 passed the House twice in a bipartisan 64-33 vote, including a “yes” vote from every legislator who represents the Sound Transit district.
The Republican Senate passed SB 5839. Rather than use RCW 82.44.035, it required the lower of either Kelley Blue Book values or the National Automobile Dealers Association (NADA) values. The catch is that a government agency cannot issue bonds against a revenue stream that is determined by a private party. The House bill used RCW 82.44.035 so it could still be bonded against – and the Senate used proprietary valuation schedules because Sound Transit couldn’t bond against these streams, impairing project delivery. Their bill also cut Sound Transit’s MVET authority from 1.1% (up from 0.3% before ST3) to 0.5%. This expressly sought to overturn the will of 717,000 voters in central Puget Sound, 54% of the total, by forcing drastically lower revenues and making the completion of the regional transit system impossible. This bill passed three times in a strictly partisan 25-24 vote. It only passed because of overwhelming support from eastern Washington Republicans whose constituents were unaffected by the ST3 MVET.
We supported the House Bill for these reasons:
1. Even representing a district that overwhelmingly supported ST3 (59%) and will enjoy one of ST3’s marquee projects, I heard from a huge number of constituents alarmed by their new car tab fees. Some of this was sticker shock, but many had legitimate concerns when they received a car tab bill and saw that their car’s assessed value was unambiguously more than they knew it to be worth. Many House Democrats were concerned about this as a fairness issue. It is not accurate that legislators were unaware of the different valuation tables (indeed, even the Republican Senate defeated Sen. Ericksen’s amendment to the 2015 transportation package to reject the valuation table that Sound Transit ended up using). However, I was surprised by the vehemence with which my constituents rebelled against the higher valuation table in the law.
2. The lost revenue for Sound Transit from HB 2201 was estimated at about $78m per year. The lost revenue from SB 5839 would have been roughly ten times that. It was clear to pro-transit House Democrats that a bill without our support had the potential to contain a greater revenue loss than HB 2201. We made sure, in supporting the bill, that HB 2201 was a take-it- or-leave- it offer. The House would reject any bill that lowered the MVET rate below the voter-approved rate, required a valuation table that precluded selling bonds, or that cut revenue below what HB 2201 did. The House adhered to that promise, which wasn’t enough for the Senate.
3. The other condition of our support was to prioritize the completion of the regional light rail system. Legislators from end-of- the-line districts like me, including members from Tacoma, Everett, Ballard, and Kirkland, wanted to do everything possible to ensure that the MVET bill did not impede the completion of light rail promised to our districts in ST3. So we included a provision requiring that if Sound Transit had to cut any projects as a result of their decreased MVET authority, light rail projects would be cut last, and parking projects would be cut first. None of us were thrilled with this prioritization, because there are worthwhile parking projects in the package. However, the priority for us is the completion of the regional light rail system.
The Senate refused to budge from their position that the voters were wrong to approve ST3, and the House refused to budge from our position that any changes beyond the valuation system went too far. We also refused to consider bills that politicized the Sound Transit board by making it directly elected.
Victories for transit
As noted earlier this week, the revenue package that helped balance the budget, HB 2163, included the requirement that online sellers collect sales tax just as brick-and-mortar retailers do. Also known as the Marketplace Fairness Act, this change will generate substantial new revenue for sales tax-dependent transit agencies. This comes both from new collections from online sales and growth in brick-and- mortar retail sales from a level playing field. Sound Transit alone will raise about $40m in fiscal year 2021 from this change; King County Metro will raise $18m; and many smaller agencies will raise smaller but still meaningful amounts of money, that can go into reserves to protect against a future downturn or, optimistically, into service expansions.
HB 2163 also removed the sales tax exemption on bottled water. We don’t yet have district-specific numbers on the new local sales tax generated by ending this exemption, but it’s about ten percent of the revenue from the Marketplace Fairness Act statewide and probably a similar increase for transit agencies.
Finally, SB 5883, the state operating budget, included a provision requiring that the Department of Revenue renegotiate its sales tax collection contract with Sound Transit, a hit of about $6.5m per year. Fortunately, we caught this provision in enough time for Rep. Jake Fey (Tacoma) and I to ask Gov. Inslee for a veto, along with organizations including Transportation Choices Coalition, the Washington State Labor Council, and King County. I was very gratified to see, again, that the governor cares about the completion of our regional transit system. He did the right thing and vetoed the section.
Many other transit issues flew under the radar. The transportation budget invested $58m in regional mobility grants, with a greater rural focus than in past budgets, including $1.2m for Clallam Transit to buy two electric buses; $300,000 for Grant Transit to run express buses between Moses Lake, Ellensburg, and Wenatchee; $3.2m for a park & ride in Chelan County; and $222,000 for rural bus service in Wahkiakum County. Some urban priorities were funded as well, including $5m for Delridge/Burien RapidRide; $1.7m to increase service on Metro Route 101; $7m for Swift Green Line; and $600,000 for Metro to make spot speed and reliability improvements.
Nothing major happened legislatively on the urban density front, although we approved $600,000 for a collaborative process to identify improvements to the Growth Management Act. Provisions in SB 5254 will reduce barriers to upfront SEPA review for transit-oriented development projects and add new requirements to urban counties’ buildable lands reports.
Transit advocacy will never be easy in Olympia. In much of our state, especially outside of urban centers, transit is perceived as an expensive social service, rather than critical infrastructure that enables our cities’ economies to function. Concerted and sustained advocacy in favor of robust transit choices has the potential to make a difference and the positive transit outcomes in the 2017 session shows that it has.
Rep. Fitzgibbon, a Democrat, represents the 34th District (West Seattle, Burien) in the Washington House of Representatives.