House Bill 2123 is on the agenda for action by the House Transportation Committee this afternoon (starting at 1:00), but is not expected to pass out of committee yet. Nor have any committee members offered an amendment to the bill by the deadline to do so in order to be part of this afternoon’s consideration. Friday is the deadline for most bills in that committee that aren’t necessary to the state budget. However, this afternoon is the committee’s last scheduled meeting this week.
Rep. Mike Pellicciotti (D – Federal Way), prime sponsor of HB 2123, indicated by email that work continues on the bill, and he hopes to moved it forward next week, with the bill being considered “necessary to the budget”, meaning it has no deadline except sine die.
The initial confusion between ST and WSDOT numbers during the bill’s introduction was that WSDOT relied on the backfill ST would get from getting 40 years of discounted leasing (around $550M) [of WSDOT property], while ST was interpreting the backfill they would get from getting only 21 years of discounted leasing (during the time of construction). Those numbers have now been reconciled as a part of the legislative process, and I have been able to bring together the financial experts from both camps who are now speaking the same language with this. We will hopefully soon be able to get consensus and clarity on how to fix the length of time for the lease discount, so we can amend that aspect of the bill to meet the objectives of HB 2123 to make sure that no projects are impacted. My guess is that could push the bill at least into next week.
HB 2123 would alter the formula for Sound Transit’s portion of motor vehicle excise taxes, and give MVET payers a discount based on the difference, if it is positive. Sound Transit has offered various estimates on the total revenue hit (between a half billion and billion dollars, depending on the length of the free WSDOT land leases) and financial impact due to having to go deeper in debt on the front end of the Sound Transit 3 package approved by voters in 2016 (roughly $2 billion over the life of the package through 2041, regardless of how far out the free land leases are extended).
It is unclear which specific projects might get delayed, and the fate of Federal Way Link is more in federal hands. Per ST spokesperson Geoff Patrick:
We have recently received a major federal grant for Lynnwood and are working to secure another for Federal Way and start building the project this year. The agency will be putting particular focus on getting these projects underway. It would be premature to speculate about which specific projects could be impacted and how. If we found ourselves in the unfortunate position of losing revenues the Sound Transit Board would be involved in making policy decisions about how to respond.
A hearing was held Tuesday (starting at 2:07 in the video), in which numerous pro-transit organizations, business groups, and local governmental representatives testified against the bill, with most of them expressing openness to a version that would backfill the financial loss to ST with other revenue sources or new savings (which, per the back-and-forth between committee members and testifiers, the bill, with just the free WSDOT leases as a savings option, does not come close to doing).
Sound Transit Board Chair John Marchione testified that Sound Transit has offered eight ways to backfill funds lost to changing the MVET formula. The list provided by Sound Transit includes the other seven:
- waiving state sales tax on ST construction contractors ($921 million for 2017-2041)
- waiving state Department of Revenue tax collection fees for sales tax for ST ($302 million)
- waiving federal share of land bank obligation ($147 million)
- exempting rolling stock from state sales tax ($131 million)
- waiving Department of Licencing fee on reduced MVET taxbase (2006 schedule on 0.8% from July 2019) ($69 million)
- waiving DOL credit card fee on reduced MVET tax base (2006 schedule on 0.8% from January 2020) ($52 million)
- allowing ST to compete for state transportation grants ($57.5 million)
Keith Kyle, Executive Director of Seattle Subway, has gone further, suggesting that the carbon tax proposed in the state transportation budget be used to fund acceleration of Link Light Rail construction, since it is not constrained by the State Constitution the way gas tax is. Currently, the state transportation budget proposes that a carbon tax fund lots of road construction.
The Legislature will be spending almost its entire time next week and the first three days of the following week on the Floor, trying to pass as many bills as possible out of each chamber. HB 2123 could, by motion, be pulled to the House Floor for consideration. Doing so would likely cause several other bills to miss the deadline to get voted out, due to the lengthy debate that would ensue, if history is any guide.