Sound Transit says House Bill 2123 (vehicle fees) would blow a big financial hole in ST3

Leg­is­la­tion intro­duced by State Rep­re­sen­ta­tive Mike Pel­lic­ciot­ti and oth­er House Democ­rats would neg­a­tive­ly affect Sound Tran­sit’s abil­i­ty to deliv­er vot­er-approved light rail, express bus, bus rapid tran­sit, and com­muter rail expan­sion projects, the agency said in a state­ment pro­vid­ed to NPI late this evening.

The bil­l’s cospon­sors present­ly include Rep­re­sen­ta­tives Leav­itt, Kil­duff, Enten­man, Ryu, Good­man, Bergquist, Klo­ba, Slat­ter, Valdez, Springer, Pol­let, Pet­ti­grew, Kir­by, Stan­ford, Lovick, Orwall, Davis, Hud­gins, Ortiz-Self, Sul­li­van, Walen, Senn, Thai, Mead, Robin­son, Peter­son, San­tos, Ramos, and Callan.

House Bill 2123 con­cerns “the col­lec­tion of a motor vehi­cle excise tax approved by vot­ers of a region­al tran­sit author­i­ty in 2016.” It seeks to cre­ate “a mar­ket val­ue adjust­ment pro­gram to pro­vide a cred­it based on the dif­fer­ence between the vehi­cle val­u­a­tion sched­ule used by the author­i­ty to deter­mine the tax amount under cur­rent law and the vehi­cle val­u­a­tion sched­ule in RCW 82.44.035.”

Trans­la­tion: Some House Democ­rats want to amend the 2015 bipar­ti­san Con­nect­ing Wash­ing­ton Trans­porta­tion Pack­age to require Sound Tran­sit to use a new­er method­ol­o­gy for deter­min­ing a vehi­cle’s val­ue for tax col­lec­tion pur­pos­es, even though the Leg­is­la­ture decid­ed that Sound Tran­sit ought to con­tin­ue using the old­er method­ol­o­gy back when the pack­age was being put together.

Switch­ing to that new­er method­ol­o­gy with House Bill 2123 would cost Sound Tran­sit a sig­nif­i­cant amount of mon­ey, agency spokesman Geoff Patrick says. Here is his full state­ment to the House Trans­porta­tion Committee:

Mem­bers of the House Trans­porta­tion Committee,

In light of the intro­duc­tion of HB 2123, I want­ed to pro­vide an update and some addi­tion­al infor­ma­tion that we have had staff devel­op since first see­ing the bill draft on Friday.

The Sound Tran­sit Board’s offi­cial­ly adopt­ed posi­tion is to work col­lab­o­ra­tive­ly with the Leg­is­la­ture on changes to the depre­ci­a­tion sched­ule as long as any neg­a­tive fis­cal impact can be off­set by cost sav­ings or oth­er solu­tions so the agency can deliv­er all vot­er-approved projects with­in their adopt­ed timelines.

Unfor­tu­nate­ly, HB 2123, which would cre­ate a rebate pro­gram effec­tive­ly mov­ing Sound Tran­sit to the 2006 MVET [motor vehi­cle excise tax] depre­ci­a­tion sched­ule imme­di­ate­ly rather than in 2028 as cur­rent­ly con­tem­plat­ed in statute, does not meet the Board’s stan­dard in keep­ing the agency finan­cial­ly whole.

Sound Tran­sit staff has devel­oped an esti­mate of the fis­cal impact HB 2123 would have on the agency as cur­rent­ly drafted.

Of the $633 mil­lion rev­enue loss that Sound Tran­sit would see, the bill’s pro­posed off­set of waiv­ing the fed­er­al share of WSDOT land acqui­si­tions would recoup only $147 mil­lion — mean­ing that this pro­pos­al would restore less than 24% of the rev­enue lost.

In terms of the impact to Sound Transit’s over­all finance plan includ­ing debt ser­vice costs, the pro­pos­al would off­set rough­ly a fifth of the impact, leav­ing a deficit of just under $1.4 bil­lion. Sound Tran­sit staff has in the past proac­tive­ly shared a num­ber of options that would ful­ly off­set the rev­enue loss con­tem­plat­ed by this bill and would be hap­py to share that list with any mem­ber that is inter­est­ed. I am also includ­ing a chart below with a break­down of the impacts in a graph­ic format.

We will be shar­ing tes­ti­mo­ny in more detail dur­ing the pub­lic hear­ing on this bill this com­ing Tues­day but want­ed to share this infor­ma­tion as soon as we had it com­plet­ed for your awareness.

Please don’t hes­i­tate to con­tact me if you have any questions.

Table 1. House Bill 2123 Rev­enue Impacts (Cour­tesy of Sound Transit)

We bad­ly need the tran­sit infra­struc­ture that ST3 will cre­ate. The Leg­is­la­ture should be help­ing Sound Tran­sit deliv­er these invest­ments as fast as pos­si­ble, not pass­ing bills that take away vot­er-approved rev­enue for vot­er-approved projects.

The Leg­is­la­ture cre­at­ed Sound Tran­sit in the 1990s and gave the agency the author­i­ty to pro­pose plans to serve the peo­ple of this region with high capac­i­ty tran­sit. The peo­ple have vot­ed repeat­ed­ly to invest in mass transit.

Now the Leg­is­la­ture has an oblig­a­tion to ensure that Sound Tran­sit is suc­cess­ful in car­ry­ing out its vot­er-approved man­date. Yank­ing rev­enue — like Tim Eyman wants to do on an even grander scale with Ini­tia­tive 976 — jeop­ar­dizes financ­ing, and that means cut­ting or can­celling projects, which is sim­ply unacceptable.

If leg­is­la­tors real­ly want to change the val­u­a­tion method, alter­ing the terms of the Con­nect­ing Wash­ing­ton pack­age, then the Leg­is­la­ture must ensure that Sound Tran­sit receives 1:1 replace­ment fund­ing so that its projects are not jeop­ar­dized. House Bill 2123 does not pro­vide 1:1 replace­ment funding.

NPI there­fore oppos­es it and urges the Leg­is­la­ture not to move it forward.