This offer would lower car-tab fees and refund drivers if Sound Transit accepts it

Sound Transit was given a chance Tuesday to settle a class-action lawsuit about how it increased car-tab fees.

The lawsuit filed last month by a group of residents argues that the way Sound Transit calculates the fees to help fund its Sound Transit 3 construction package is outdated and unconstitutional.

Under the settlement proposed Tuesday by Joel Ard, an attorney for those residents, Sound Transit would use a newer system to calculate the fees and refund taxpayers the difference.

“Our understanding, based on projections that Sound Transit provided to the state Senate last year, is that the refund amount would be somewhere between $175,000,000 and $200,000,000 under this proposal,” Ard said Tuesday via email.

He said he didn’t know how many taxpayers would get refunds under such an agreement, but that he expected it would be more than 90 percent of vehicle owners in the Sound Transit taxing district.

Sound Transit spokesman Geoff Patrick issued a statement on the agency’s behalf Tuesday.

“While the settlement offer will be reviewed, our attorneys have significant doubts the settlement would be legal since neither of the parties have the ability to unilaterally declare a law unconstitutional,” according to the statement. “Moreover, the Sound Transit board cannot unilaterally reduce tax collections required to implement voter-approved projects.”

Patrick said the proposal would significantly reduce Sound Transit’s car-tab funding, and that it could delay or prevent future Sound transit projects.

The $54 billion ST3 construction package is meant to expand light rail in King, Pierce and Snohomish counties and to improve bus service and commuter-rail lines. Voters approved the plan in 2016, though most of the votes in Pierce County were against it. In addition to the increased car-tabs fees, it’s funded by increased sales taxes and property taxes.

Ard said his settlement offer still would let Sound Transit collect $6 billion in car-tab fees over the next 30 years.

If Sound Transit rejects the offer, Ard said, it risks not being able to collect anything from the car-tab fees for ST3, which would cost the agency $8 billion in revenue.

In that scenario, he said Sound Transit would risk having to refund the more than $400 million it’s collected from the car-tab fees thus far.

Sound Transit has been calculating the car-tab fees based on a 1996 method to estimate vehicle value, which inflates the value of newer cars. Patrick, the agency spokesman, noted in his statement that that longtime legislation was “extensively debated.”

The settlement offer proposes that Sound Transit instead use a method of calculating vehicle value that lawmakers implemented in 2006.

Lawmakers have said previously that they didn’t realize Sound Transit was going to use the old method, and some car owners expressed shock when they went to renew their tabs and found the ST3 portion was sometimes hundreds of dollars.

“It failed to alert the legislators and the public that it was replacing the existing valuation schedule with an outdated schedule with inflated vehicle values,” Ard’s press release about the settlement offer said.

This story was originally published July 24, 2018 at 3:03 PM.