The Senate Transportation Committee held a hearing yesterday on several bills relating to Sound Transit. The most significant is SB 6606, a bill from Senator Marko Liias to reset MVET valuations. That bill saw a substitute amendment that would somewhat offset the revenue reduction to Sound Transit. The offset would not be enough to satisfy Sound Transit’s request they be made whole for lost revenue. Four other bills relating to Sound Transit were also examined, but are unlikely to proceed.
Liias’ bill, as we reported last week, repeals several sections of I-976. It would also replace the valuation schedule for vehicles subject to the motor vehicle excise tax. The new schedule is similar to one adopted by the Legislature in 2006, whereas Sound Transit uses an older schedule dating to 1999. Liias’ proposal would tweak the schedule for vehicles more than ten years old, thereby avoiding a small tax increase for owners of the oldest vehicles if they were to simply adopt the 2006 schedule.
A substitute bill from Senator Liias, filed on Monday, maintains the revised schedule from the bill as first introduced, but adds two significant amendments.
One provision would allow drivers to pay their Sound Transit taxes in installments, either monthly or quarterly. This would be achieved by linking the car tab bills to the vehicle owner’s Good-to-go account. That’s the system used for paying tolls to WSDOT on several local highways, and most drivers who use a tolled highway are likely to have an account.
A second provision could offset lost revenues by modifying land bank arrangements between Sound Transit and WSDOT. The land bank means WSDOT can lease or transfer WSDOT property or air rights to Sound Transit, and Sound Transit can earn credits for projects involving highway improvements. The transactions are at market rates. Rather than exchange cash for each transaction, Sound Transit makes payments on the difference. An important recent example is the transfer of the I-90 center lanes to Sound Transit, and the corresponding improvements on the outer HOV lanes funded by Sound Transit.
The substitute bill would allow Sound Transit to run a negative balance until 2042, effectively deferring payments to WSDOT for up to 20 years.
Just one day after the substitute bill was introduced, only preliminary analysis was available and it was not clear how much the revised land bank terms would matter. Legislative staff suggested the reduced payments from Sound Transit to WSDOT would be “somewhere in the hundreds of millions of dollars” by 2041. Peter Rogoff, in testimony before the committee, said Sound Transit’s initial assessment was that it “would not provide any protection for our ability to complete voter-approved projects” and the benefits would occur after ST3 projects were complete.
The risk to projects is due to the statutory debt cap, most critical between about 2029 and 2032. If the deferred payments mostly benefit Sound Transit after that date, it could simultaneous be a large saving and also too late to help deliver projects. It would simply come too late. Sound Transit does not lack debt capacity after the ST3 program is substantially complete. In any case, there seems not enough clarity about the land bank implications at this time.
The other bills were more drastic in their effects, but aren’t going anywhere. All are sponsored by Senators Steve O’Ban or Steve Fortunato. SB 6108 invalidates all ST3 taxes in Pierce County. SB 6031, SB 6245, and SB 6350 all codify I-976 into law, rather as the 2000 Legislature restored an earlier Eyman car tabs initiative that had failed in the courts.
The last day to pass bills out of the Senate Transportation Committee and have them read on the floor is February 11.