Democratic legislators are reexamining legislation that would lower car tab fees, reducing funding for Sound Transit and potentially delaying the expansion of light rail around the region.
According to the News Tribune, State Sen. Marko Liias, (D-Lynnwood) said the party is looking at a range of ways to lower car tab fees, but also limit the hit to Sound Transit’s bottom line.
“I’m not with the transit advocates in believing that this is sort of the sky is falling and we’re not going to get light rail,” Liias told The News Tribune. “But I also am convinced based on everything we’ve seen over the last year it probably makes sense to just have a conversation about how we make sure light rail gets to Everett and Tacoma like it’s been promised.”
Last week the House tabled plans to vote on HB 2201, which passed easily out of the chamber last year with both Democratic and Republican support.
The bill adjusts the rate of the motor vehicle excise tax Sound Transit collects. ST3 uses a motor vehicle excise tax schedule from the 1990s, which many have criticized as inflating the value of cars and increasing the cost of renewing car tabs.
If passed, ST estimated the agency would lose $780M in direct funding over the next 11 years, with indirect financial impacts, such as higher debt costs, costing Sound Transit nearly $2.3B. Voters passed the $54 billion transit package in 2016.
Liias told The Seattle Times that options to mitigate the reduction in funding could include “more favorable terms when it [ST] needs to lease state land for rail-line rights of way, legislation to streamline permitting, or even looking at a $500 million fund through which Sound Transit contributes to education funding.”
Seattle Subway has called for “Democrats to show a backbone and stand up for transit.”
“Sound Transit is not safe until the session is over,” said Andrew Villeneuve, founder and executive director of the Northwest Progressive Institute. “Funding cuts are a very real threat.”
Legislators are also considering another bill, HB 2357, which would allow car owners with car tabs fees over $200 the option to pay their bill in quarterly or semiannual installments. Drivers choosing this option would also be charged a $5 fee with each subsequent payment.
These bills come at a time when federal funding for Sound Transit projects, including the Lynnwood Link Extension and the Federal Way Link Extension, remains uncertain. The 2018 proposed budget from the Trump administration eliminates funding for a grants program that supports building mass transit.
Meanwhile, the rising cost of property acquisitions and construction is increasing the cost of projects. In August, Sound Transit announced the Lynnwood Link Extension was running $500M over budget due, in part, to real-estate cost overruns and higher than anticipated right of way acquisition costs. In an effort to limit those increases, ST said it would delay the opening of the light rail extension by six months.
The three taxes (sales, property, car) all are pledged to 40-year bonds, so they can’t be reduced. How much tax revenue is that expected to generate? My point is . . . rebating $780M over the next 10 years may well be insignificant.
It’s more significant than $780m because it requires either additional borrowing or delaying projects. From the TNT article:
“Doing that [passing 2201] would have taken $780 million from the $54 billion transit package approved by voters in 2016. The legislation ultimately would have cost Sound Transit $2.2 billion dollars because the agency would need to borrow more money to complete the projects approved as part of Sound Transit 3…”
Drew — that TNT article is confusing. The $54B figure from ST3 is a spending estimate (ST3 projects and operations subsidies for 25 years), not a taxing amount. This year the agency will obtain $1.7 billion in tax revenue, so rebating $780M over 10 years doesn’t seem like a major thing given how the current rates will stay the same for 40 more years.
Only a few of the bonds have been sold. There’s a state debt/asset ceiling, and ST imposes its own stricter ceiling. That’s what’s stetching out all the projects to 25 years. If the state does change the MVET schedule, then depending on the details of the law, either it won’t apply to the existing bonds (as was the case for ST1), or the bonds will be defeased (paid off with replacement bonds, presumably at a higher interest rate).
Unfortunately, modernizing the MVET schedule is a hot turd that the GOP left the Democrats holding, hoping it explodes in their face. Passing HB 2201 without causing a detriment to ST3 building is possible and would do a lot to ensure the Dems stay in power at the state level. The obvious things have been stated on this blog already:
(1) Cut the silly $500 million education funding requirement and actually fund education with it’s own funding source (bonus points for the Dems if they can accomplish that).
(2) Start cutting or reducing size of parking garages starting with the assumed least productive ones. If a more friendly party comes to power at the federal level in the coming years, maybe funding can be obtained, if they are design ready. I’d personally be OK with eliminating them, but parking garages are political minefields.
(3) If that doesn’t cut the gap, go beg Bezos for some chump change?
What hot turd? Republicans tried to make this an electoral issue in the 45th District special election last fall and failed completely. Voters care about this – but they’re not going to elect Republicans because of it. All the polls show Democrats are poised to win big in November, in Congress and in the Legislature.
That fact simply hasn’t broken through in Olympia.
Democrats there have been trained to believe that any freakout over taxes means their majorities are under threat. Even when that threat is totally fake, even when Dems are riding huge leads in the polls and have no legitimate reason to be worried about the electoral impact, Dems have this knee-jerk response to flee in panic.
Someone on Twitter told Marko Liias that he’s governing by listening to the Seattle Times comment section and that’s exactly what is going on here.
Not to mention that Tim Eyman failed for the third time in two years to qualify an initiative to “stick it to Sound Transit” just two weeks ago. Eyman thought he stood a chance of running a successful signature drive using volunteers (as opposed to paid petitioners) because he was fully invested in the right wing narrative about voters having a serious case of buyer’s remorse with respect to ST3. So he spent quite a few months going around the state trying to run a petition drive.
But in mid-December, realizing that he wasn’t going to make it, he threw in the towel, and announced a new scheme for 2018 to ban income taxes and capital gains taxes. Eyman never said how many signatures were gathered, which means he’s not proud of the number.
The failure of Eyman’s I-869, coupled with Jinyoung’s clobbering in the 45th District, shows that the fury about vehicle fees has been significantly exaggerated by the mass media and Eyman’s amen corner on right wing talk radio.
Well said Andrew.
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Eyman the bully is done. Stick a fork in him.
Thankful;
Joe
“the GOP left the Democrats holding, hoping it explodes in their face.”
They engineered losing an election to force a Democratic majority to act on MVET?
“Passing HB 2201 without causing a detriment to ST3 building is possible and would do a lot to ensure the Dems stay in power at the state level. ”
You’re assuming people are single-issue voters. The whole reason the MVET issue has any power is that both Republicans and Democrats they think voters care more about it than about ST3. Judging from the general public reaction, that seems to be the case because people have difficulty evaluating a small pain now (a $200 annual bill) vs a large ongoing benefit decades in the future.
I’m surprised they’re not throwing a bone to suburban Pierce County. Isn’t the argument that people are feeling the car tab pain but will be far on the outskirts of the ST3 service area? My solution would be tolled expensive parking garages (3-10$ day) and delay sending the train there till the very end.
@Mike (and Robert) Well, considering the GOP (via the Senate) were the ones that chose to not only implement the outdated MVET schedule, but also voted down an amendment, by their own party member, to change the MVET to a more modern, accepted schedule. Other than raising a big stink with their final in-power, legislative throes, they had no intention of repealing the MVET. They wanted the buck to pass to the Dems, who will have to choose between pissing off the greater Puget Sound, by not changing the MVET schedule, or taking away funding from ST3, pissing off the urban crowd.
Then you have the $500 million education rider, that left everyone scratching their head, which is a good chunk of the shortfall that would occur if the MVET schedule is changed. Removing that would force the Dems to fund education, per McCleary, assuming they were to get back in power.
Putting on my tin foil hat, I think the GOP knew exactly what they were doing. I think they figured they might lose their Senate majority,but don’t think the GOP had foreseen the blue wave that would follow in the wake of Trump getting elected president and were hoping for a more contested political environment when this all came to fruition. Regardless, the Dems need to tread lightly with this political minefield.
I was horrified to just learn that one of the listed sponsors for 2201 is Gerry Pollet. What is it with these 46th district respresentatives (first Farrell, now Pollet)? Is there a breakdown of the ST3 vote by legislative district? I’ve seen the neighborhood map on Seattle Times, and mentally overlaid the 46th district boundary, and it seems the district was fairly strongly in support of ST3. Would be good to have a quantified percentage.
FYI, here’s what Rep. Javier Valdez (also 46th LD) said “While I am a strong supporter of Sound Transit, I am also supportive of the effort to ensure that the vehicle valuations used by Sound Transit to set car tab fees are fair to taxpayers. The current valuation schedule doesn’t pass the sniff test, and undermines the public’s trust in government. The fix proposed by Rep. Pellicciotti brings the valuations more in line with reality, and will help restore taxpayer trust.”
Is ‘the fix proposed by Rep Pellicciotti’ HB 2201? I would have no problem fixing the MVET schedule as long as ST is kept whole (actually, I would a little, since the proposed fix is more regressive, as cars older than 10 years actually get taxed more under the fix, but it’s a lot more minor of an objection than the hit to ST.) But if the proposal is to ‘fix’ the MVET schedule and let ST deal with the revenue hit, then fuck that noise. We had a whole election about this. People knew what they were voting for. ST won. Support your district, not the Seattle Times editorial board. Sheesh.
I’m with you Steve, the Legislature can fiddle with the MVET schedule to restore taxpayer trust (which might not be a bad idea for future ST votes), but we voted for ST3 and we need to get ST3. Exempting ST from sales tax and making the affected county education budgets whole in other ways would be logistically and politically efficient (as Observant pointed out).
Regarding the Lynnwood Link project budget woes, let’s be sure we get our figures straight.
FTA New Starts rating from Nov 2015:
Total capital cost in YOE$ (incl financing)
$2,345.93 million
Subtracting out financing costs
-$194.3 million
Capital cost only
$2,151.63 million
FTA New Starts rating from Nov 2016:
Total capital cost in YOE$ (incl financing)
$2,347.72 million
Subtracting out financing costs
-$179.3 million
Capital cost only
$2,168.42 million
Finally, as recently reported in the Seattle Times, per ST board motion 2017-162:
Total capital cost in YOE$ (incl financing)
$3,069 million
Subtracting out financing costs
-$135 million (assumed)
Capital cost only
$2,934 million
Thus, taking this latest figure supplied by ST,
$2,934M, and comparing it to the 2015 FTA ratings figure, $2,151.63M, one can quickly ascertain that the agency has blown a far bigger hole in the estimated budget for this project than the narrative they have been trying to push since last August.
$2,934M – $2,151.63M = $782.37M
That’s a far cry from the figure that keeps getting reported.