Bill would lower car tabs for Pierce taxpayers, but Sound Transit warns of delays

Angry about high car-tab fees because of how Sound Transit calculates the value of your vehicle?

The Senate is considering a bill that would require the transit agency to use a depreciation schedule that would result in lower costs for taxpayers.

“When I talk to my constituents, they don’t want to be stuck in traffic,” said the bill’s sponsor, state Sen. Marko Liias, D-Lynnwood. “They want light rail to come to us, but they also want their cars to be valued fairly.”

The Senate Transportation Committee approved the bill on Monday, moving it one step closer to a full Senate vote.

SB 6606 is the latest skirmish in the controversy over Sound Transit’s use of a formula that inflates the value of vehicles when it levies a motor vehicle excise tax, pumping more money into its coffers. Vehicle owners in urban parts of Pierce, King, and Snohomish counties pay the tax through their car tabs.

Sound Transit opposes the bill, saying it would lose an estimated $1 billion in revenue, triggering delays in light-rail projects and causing higher debt costs.

Liias’ bill would require Sound Transit to use a valuation schedule that is similar to the Kelley Blue Book and one that the Legislature approved in 2006, but never has been used. It also would give people the option to pay their car tabs in monthly installments or every three months instead of annually.

Liias said Sound Transit has collected $490 million more than what it projected in 2017. Based on what Liias called the transit agency’s “conservative growth estimates,” Sound Transit between now and 2028 would collect over $2 billion more than its 2017 projections, he said at a Feb. 4 hearing.

“So let’s take half of that expected revenue and use it to make the system fairer for people,” he said.

Sound Transit said its revenue from 2017 through 2041 is projected to be $1 billion higher than projected because of the region’s strong economy, but its costs would be $1.2 billion higher.

In an email to lawmakers on Monday, Sound Transit Chief Executive Officer Peter Rogoff said Sound Transit is facing the same high materials and labor costs that have affected SeaTac Airport’s terminal expansion project, many of the state Department of Transportation projects, and major water and sewer projects across the state.

Rogoff said construction bids came in high on the Hilltop Tacoma Link project, with the low bid 16 percent over the agency’s estimate. Similar cost increases are impacting parking garages ready for construction or in development in south King and Pierce counties, he said.

“Rather than delaying these critically needed projects, our higher-than-projected revenues have allowed the Sound Transit Board to advance them despite their increased cost,” Rogoff wrote, repeating the agency’s stance that it wants to work with lawmakers to provide other sources of revenue or lower its costs.

If Liias’ bill becomes law, it would repeal parts of Initiative 976 that apply to Sound Transit if the courts allow the initiative to take effect. I-976 is on hold because of a legal challenge pending in King County Superior Court.

I-976, which was approved last November with 53 percent of the vote, would require Sound Transit to use a valuation based on the Kelley Blue Book and lower the motor vehicle excise tax that voters approved in 2016 to 0.2 percent. In Pierce County, 66 percent of voters approved the initiative.

In opposing Liias’ bill in committee on Monday, Sen. Steve O’Ban, R-University Place, referred to it as a “bad idea” because it would block I-976’s requirement to sharply lower Sound Transit’s “exorbitant car tab taxes.”

Liias said he opposes lowering the MVET rate, which is 1.1 percent — or $110 for each $10,000 of depreciated vehicle value. Most Pierce County voters in 2016 said no to the Sound Transit 3 package, but it carried in King and Snohomish.

Sound Transit has said light rail will be extended from Federal Way to Tacoma in 2030.