Politics & Government

Did Sound Transit mislead lawmakers, or was it ‘on the up and up’ about ST3? Hearings underway

Riders come and go at the Link light rail platform at the Tacoma Dome Station, December 14, 2016. A state Senate committee is holding investigatory hearings into whether Sound Transit misled the Legislature about Sound Transit 3, the transit ballot measure voters approved last November.
Riders come and go at the Link light rail platform at the Tacoma Dome Station, December 14, 2016. A state Senate committee is holding investigatory hearings into whether Sound Transit misled the Legislature about Sound Transit 3, the transit ballot measure voters approved last November. phaley@thenewstribune.com

A panel of state lawmakers held a two-hour hearing Tuesday on whether Sound Transit deceived legislators about the size and nature of the $54 billion transit package it sent to voters in 2016.

The conclusion? To be determined.

But some lawmakers say the evidence presented Tuesday makes a strong case that Sound Transit withheld crucial information from lawmakers two years ago, when the Legislature was weighing whether to allow Sound Transit 3 to go the ballot.

“I certainly hope the average, impartial viewer can reach only one conclusion, and that is it is undeniable that Sound Transit misled” key lawmakers, said state Sen. Steve O’Ban, R-Tacoma, one of the senators who called for the investigation.

Others who attended the hearing — including members of labor unions, who flooded the Kent City Council Chambers to watch — said they wanted to make sure lawmakers don’t unravel the will of voters.

A majority of voters across Sound Transit’s three county taxing-district approved Sound Transit 3 last fall, though most in Pierce County rejected it.

“We worked hard to pass Sound Transit 3 — the people voted,” said Lee Newgent, executive secretary of the Washington State Building and Construction Trades Council, who estimated about 125 union members attended the hearing.

When it comes to Sound Transit officials, Newgent said, “I think they’ve been on the up and up the whole time.”

The Sound Transit 3 ballot measure will raise about $28 billion in revenue through a combination of increased sales taxes, car-tab fees and property tax hikes over the next 25 years.

Over that 25-year period, it will pay to extend light rail from Tacoma to Everett, while improving commuter rail and bus service throughout the Puget Sound.

Tuesday’s hearing, the first of two the Senate Law and Justice Committee will hold, focused largely on whether Sound Transit representatives misled the Legislature by repeatedly saying they were looking for $15 billion in tax authority, not the $28 billion in new revenue the agency ultimately asked voters to approve.

O’Ban referenced a set of talking points Sound Transit officials drafted in 2015 that directed the agency’s board members to ask the Legislature to authorize “the full $15 billion” in tax authority, as well as a draft letter from Sound Transit to lawmakers that mentioned that sum.

O’Ban said the materials were uncovered as part of 7,000 pages of documents the committee reviewed as part of the investigation.

As further evidence, O’Ban quoted parts of an April article in The News Tribune in which several key lawmakers said they didn’t realize what they were approving.

Geoff Patrick, a spokesman for Sound Transit, told committee members the tax rates lawmakers authorized two years ago would have raised $15 billion had the transit package stretched over a 15-year period — something he said lawmakers were told at the time.

Later, after soliciting feedback from the public, Patrick said, Sound Transit decided to lengthen the time period of the tax collections, which allowed the agency to ask voters for $28 billion over 25 years, while including more projects in the package.

Patrick said lawmakers didn’t limit how long Sound Transit could collect the voter-approved taxes, even though the agency made it clear that the scope of its ballot measure wasn’t decided in 2015 when lawmakers were choosing whether to authorize it.

“Nowhere in the process that I’m aware of was there any limitation in the time period for collecting those taxes,” Patrick told committee members.

O’Ban also hammered Sound Transit representatives over the language surrounding how Sound Transit 3 would estimate vehicles’ value when charging car-tab fees.

He said the law the Legislature approved to authorize Sound Transit 3 was unconstitutionally drafted, because it referenced an outdated formula for calculating the fees, yet didn’t include a copy of the formula in the bill.

O’Ban said the resulting bill made it unclear that Sound Transit 3 would rely on an older vehicle valuation schedule from the 1990s to calculate car-tab fees, rather than a replacement valuation table the Legislature approved in 2006.

The older formula significantly overestimates a vehicle’s value during its first 10 years of life, leading to higher car-tab fees, while the newer schedule estimates a car’s value more accurately.

In a memo this month to Sound Transit board members, agency CEO Peter Rogoff denied any deception. He said the 2015 bill was clear that the older method of calculating car-tab fees would be used through 2028, when bonds from older transit projects are retired, while the newer formula would go into effect in 2029.

Sound Transit officials repeated that argument at Tuesday’s hearing.

“In hindsight, would it not have been better to just list the schedule in there so folks would all be crystal clear as to what was being voted on?” asked state Sen. Mike Padden, R-Spokane Valley, the committee chairman.

Some lawmakers on the committee said they didn’t find the car-tab language hard to understand in the least.

“My point is, it’s not confusing to me at all,” said state Sen. David Frockt, D-Seattle. “It took me about three seconds.”

Sen. Jamie Pedersen, D-Seattle, said he thinks his colleagues were well aware of how car-tab fees would be calculated under Sound Transit 3.

He noted the Senate even considered an amendment to replace the older car-tab formula during a February 2015 floor debate, but rejected that idea.

The Law and Justice Committee has scheduled another hearing on Sound Transit 3 for Oct. 5 in Everett.

O’Ban said he hopes the hearings will stoke public outrage and build support for having Sound Transit board members be directly elected by the public.

Right now, the agency’s 18 board members are appointed, though nearly all of them also serve as elected officials in cities and counties within Sound Transit’s service area.

Chris McClain, another union leader who attended the hearing, said he remains concerned about the hearings providing fodder for lawmakers to scale back the voter-approved Sound Transit 3, which he said will provide “26 years of living-wage jobs.”

“It leads me to believe they are either doing a campaign stunt or they don’t believe in democracy,” said McClain, the business manager for the Iron Workers Local 86 in Tukwila. “We just want to let them know we see that.”

Melissa Santos: 360-357-0209, @melissasantos1