Washington State Senate Passes Car Tab Bill Threatening ST3 Projects

The Washington State Senate was burning the midnight oil into the wee hours of the morning yesterday to vote on a complex bill originally meant to adjust the valuation method for car tab fees. Senate Bill 5955 has direct implications on Sound Transit 3, the 2016 voter-approved measure that is supposed to deliver large expansions of light rail, commuter rail, and bus rapid transit in the Puget Sound region through 2041. The bill had been floating around the Senate halls for the better part of a year and emerged markedly different from the one submitted by Senator Patty Kuderer (D-Bellevue), the primary sponsor, last June.

The initial bill was very blunt threatening to make $780 million in direct funding cuts to Sound Transit 3 with possible long-terms cuts of $2.1 billion when accounting for other factors. To say the least, the initial proposal was an overtly reckless way to appease a small number of car tab fee payers who own new and high-end vehicles. The Senate Transportation Committee recently met to consider ways to improve the bill by lessening the hit on project delivery. The restructured bill is still damaging, but gets part of the way to plugging the massive hole that the car tab valuation changes create.

The revised senate bill would achieve several things:

1. Create a credit program for car tab fee payers who paid their car tab fees under the existing valuation method but would have paid less under the revised method. The credit could be applied to car tab fees due next year, reducing the total amount to be paid. The new valuation method would be used for all fees due in future years.
2. Allow Sound Transit to defer payments to the “Puget Sound Taxpayer Accountability Account” if doing so would impact delivery of Sound Transit 3 projects. This could save at least $518 million and trim the financial deficit that the bill creates to $262 million, not accounting for other financing factors that may increase that number.
3. Encourage counties, cities, and the Washington State Department of Transportation to expedite and streamline the permitting process for Sound Transit 3 facilities. The bill encourages government agencies to designated a single point of contact, participate early in the planning and environmental review process, and process permitting in a reasonable timeframe.
4. Direct Sound Transit to use practical designs, find efficiencies through coordination and sharing resources with other agencies, and carefully considering contingency budgets.
5. Prioritize project delivery if the Sound Transit 3 program would be at risk of not meeting timelines by finding cost savings from non-light rail and bus rapid transit projects.

There are some mitigating factors that could result in the bill actually ending up being neutral if sales taxes from the Marketplace Fairness Act passed last year come through. The act allows the state to apply local sales taxes to online purchases, which could increase tax revenues for Sound Transit. Of course, in the absence of Senate Bill 5955, total Sound Transit 3 revenues could be even higher if all other assumed financial aspects remained the same, providing even more slack to speed up project delivery. That all assumes that the federal government maintains the status quo and does not proceed with the Trump administration’s “let-it-all-collapse” approach to transit.

Several Republican amendments were proposed on typical petty grind issues of theirs, but not adopted, such as using the Kelly Blue Book to determine valuations for car tab fees, creating a district-based elected Sound Transit board, allowing local nullification of Sound Transit taxing authority, reducing the percentage tax rate for car tabs, and reducing Sound Transit staff salaries and prohibiting marketing. The suite of proposals were designed to further raid Sound Transit 3 funding, punish the transit agency, and ultimately dismantle the regional transit authority compact.

A notable Democratic amendment by Senator David Frockt (D-Seattle) also failed. Senator Frockt tried to eliminate the proviso to allow Sound Transit to defer payment Puget Sound Taxpayer Accountability Account. He talked about how the proposal would “drain” funding from local jurisdictions. “A lot of people in my community are very very concerned about and expressed support for and really thought that with the transportation package a few years ago would be in place and sort of counting on those funds to be a part of the infrastructure and those funds to be rolled back into King County,” he said.

As a bit of background, the account was established as a proviso in the original enabling legislation authorizing Sound Transit 3 as a way to buy Senate Republican votes to back the legislation. Under the proviso, Sound Transit is required to pay $518 million in sales and use taxes on construction contracts for Sound Transit 3 projects. Proceeds are supposed to go toward improving educational outcomes in King, Pierce, and Snohomish counties, including homeless, low-income, and foster youth. In effect, the proviso was a poison pill in the original legislation with no nexus to transportation funding and quietly designed to pilfer money from Sound Transit taxpayers. However, local jurisdictions had begun to hope that they could get a cut of the proceeds. So far no funding has ended up in the account.

Senator Guy Palumbo (D-Maltby) sponsored an amendment addressing project delivery. His amendment specifically prohibits seeking cost savings and reductions from light rail and bus rapid transit (BRT). The impetus for his amendment is to ensure that bus rapid transit is delivered on I-405 regardless of what may happen with the express toll lanes (ETL). “Sound Transit 3 was a blessing for us in terms if BRT system that were going to be getting in 2024,” he said. “Unfortunately it’s been somewhat tied politically to the ETL renewal. This amendment simple makes sure if we are going to make them whole in this bill then they cannot cut the things that voters approved.”

Senator Marko Liias sponsored a new amendment to address streamlining and expediting the permitting process for Sound Transit 3. His original language on the issue was stripped out of the bill by an amendment from Senator Steve O’Ban (R-Tacoma). Senator Liias’s amendment passed and was incorporated into the bill.

“We had included some language in the underlying substitute around permitting in the unincorporated area that was unduly burdensome and I appreciate Senator O’Ban’s help in removing that language from the bill,” he said. “Instead, we have worked to craft some easier language that encourages all of our jurisdictions—counties, cities, and our own state department of transportation—to really cooperate and facilitate permit streamlining for Sound Transit. We know from Connecting Washington that permit streamlining is helping us save money on our state construction projects and I believe that permit streamlining here will ensure that light rail gets to my community in Lynnwood and Everett as quickly as possible.”

Before a final vote for passage, a chorus of senators spoke on the bill. Senate Republicans hogged the mic denouncing the bill as inadequate and sharing their litany grievances with Sound Transit. Two senators, Democrats Senator Kuderer and Jamie Pedersen (D-Seattle) stood out among the choir, however, for differing reasons.

Senator Kuderer was frank saying that “people are sick and tired of sitting in traffic, they want to get places efficiently, safely, and they want transportation options like bus rapid transit and light rail.” She offered two personal stories for supporting the bill before the chamber. Her first was a family in her district with three cars each costing more than $500 in car tab fees, a less than compelling reason given that her district has high quality transit service and is slated to receive light rail expansion in 2023. Senator Kuderer, however, also highlighted how regional transit expansion will further benefit her constituents. “I talked to one mother of a developmentally disabled young man who is predominately reliant on her for transportation,” she said. “And she can’t wait for the light rail to come in because she knows this is something he can learn and master and do on his own and that will be a freedom for him that he hasn’t experienced yet.”

Senator Pedersen kept his comments short but brought much needed perspective to debate on the bill. “This is a regional system that is expensive, that is going to take a long time to build out, but the voters knew what they were doing and they voted for these taxes, including the motor vehicle excise tax,” he said. “There were tax calculators everywhere available from Sound Transit, available from The Seattle Times. They knew what they were doing. They wanted this investment.”

Senator Pedersen was also very clear about why would vote against the bill. “Mr. President, I just want everyone to understand that when I’m voting ‘no’, I’m not voting ‘no’ because this is inadequate,” he said. “I’m voting ‘no’ because I believe we should be allowing Sound Transit to implement what the voters asked us to do.”

All tolled, only three of Seattle’s eight senators had the courage to do the right thing and vote against the bill. Democratic Senators David Frockt (North Seattle) and Reuven Carlyle (Queen Anne) joined Senator Jamie Pedersen (Capitol Hill) in voting nay.

The bill passed on a 30-14 vote and now moves on to the House for further consideration. It will likely be a high priority for the chamber as the 60-day legislative session draws to a close. However, it remains unclear how the House may treat the bill. House Democrats were even less thoughtful with their own version of the bill (House Bill 2201), refusing to even to send their bill back to committee to honor the wishes of voters in the Sound Transit taxing district to deliver projects on-time and as promised. So whether the senate bill will be further improved or remodeled into a weapon of mass destruction is a concerning unknown.

State Senate Moves Funding Cuts Bill to Sound Transit 3 Out of Committee