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Tuesday, September 10th, 2019

The Senate Republicans are responsible for the Sound Transit taxes they say are unfair

For nearly three years now, Washington State’s Senate Republican caucus has been waging a long-running misinformation campaign aimed at Sound Transit as part of a broader right wing effort intended to discredit the agency and overturn the 2016 Sound Transit 3 (ST3) vote, which authorized Puget Sound’s Regional Transit Authority to expand light rail, commuter rail, and bus service.

At the forefront of the effort are a trio of senators who we consider “road warriors” because they appear to believe that transportation dollars should only go to roads and highways: Steve O’Ban, Mike Padden, and Phil Fortunato.

Each of them has introduced or cosponsored bills with the barely disguised aim of either sabotaging Sound Transit’s work or gutting the agency entirely.

With their caucus out of power in Olympia, those bills have gone nowhere. But they aren’t giving up. Each of them has been busy during the legislative interim identifying other ways to advance their anti-transit, right wing agenda.

Fortunato has launched a gubernatorial campaign with an anti-transit plank, while O’Ban and Padden have involved themselves in a lawsuit that seeks to have the authority that the Legislature gave to Sound Transit to raise revenue through motor vehicle excise taxes in 2015 declared unconstitutional.

The Washington State Supreme Court heard oral arguments in that case today. While O’Ban and Padden did not bring the suit, they have filed an amicus brief supporting the plaintiffs, who claim the Legislature violated Article II, Section 37 of the Constitution when it passed the 2015 Connecting Washington package.

The State of Washington disagrees, as does Sound Transit, and are asking the Supreme Court to affirm the trial court and dismiss the case.

I read O’Ban and Padden’s amicus brief last week; it was authored by O’Ban on behalf of both of them. O’Ban appears to have created the brief with the objective of introducing a slew of documents into the case file that attempt to impugn Sound Transit’s credibility and the agency’s compliance with state law.

O’Ban and Padden claim that Sound Transit misled the Legislature when the House and Senate were considering 2ESSB 5987, the revenue component of the Connecting Washington transportation package, because Sound Transit’s leaders did not pitch the authorization of additional revenue authority as needed for a package that would ultimately include $54 billion in planned expenditures.

But there’s a very good reason that Sound Transit didn’t throw around a $54 billion number at the time 2ESSB 5987 was being considered by the Legislature: the agency’s board hadn’t yet drawn up an ST3 plan to submit to the voters. That would have been putting the cart before the horse.

The agency’s leaders didn’t know then how big the package would be, as no decision had been made. Sound Transit asked for — and got — legislative approval to levy additional sales taxes, motor vehicle excise taxes, and property taxes to bring light rail, commuter rail, and bus services to more places in the region.

Those taxes represent only a portion of the $54 billion total. Most of the rest is funding obtained from financing — the sale of bonds.

The reason the package ended up being $54 billion was because Sound Transit found out from its public outreach that voters (and riders + potential riders) wanted to vote on a bigger package with a larger portfolio of projects.

Accordingly, Sound Transit’s Board of Directors opted for a more ambitious Phase III system expansion plan. And voters approved it just a few months later.

Though the ST3 opposition campaign failed to persuade voters that Proposition 1 should be rejected, it never really ended. It instead morphed into various other efforts, like the fake “investigation” Padden and O’Ban instigated two years ago into Sound Transit’s conduct, this lawsuit, and Tim Eyman’s Initiative 976. All attempts to overturn the will of the voters in a high turnout election.

In the immediate aftermath of the election, ST3’s opponents decided to regroup, adopting the mantra we lost a battle, but we’re going to win the war.

They launched a ferocious, multi-pronged series of attacks on Sound Transit, accusing the agency of misleading legislators and duping voters.

To date, none of their attacks have cost Sound Transit any revenue. But if either this lawsuit or Initiative 976 succeeds, then ST3 will be sabotaged.

And that is their objective: obliterate whatever ST3 funding they possibly can so the agency can’t deliver the projects that voters approved in 2016.

They have focused specifically on trying to nix Sound Transit’s motor vehicle excise tax (MVET) authority because they have assessed that the MVET is the ST3 revenue source that is easiest to manufacture outrage over.

Since 2016, Senator O’Ban has invested a lot of energy in stoking outrage over Sound Transit’s “unfair car tab taxes”. He even made Sound Transit’s vehicle fees the focus of a franked mail piece sent out by his legislative office back in 2017.

Contrary to what they seem to want everyone to think, it is not Sound Transit that decides what a car is worth. It’s the state agencies, like DOL, that carry out the laws approved by the Legislature of the State of Washington.

O’Ban and the Senate Republicans have some nerve blasting Sound Transit for “unfair car tab taxes” when they are the ones responsible for having decided that Sound Transit should use an old valuation schedule for calculating what taxpayers should pay, at least until the year 2028.

See, back in 2015, when the House and Senate were putting together the Connecting Washington package, O’Ban’s colleague Doug Ericksen of Whatcom County objected to the use of the older valuation schedule that has so often been assailed as unfair. Ericksen introduced an amendment to oblige Sound Transit to use the newer vehicle valuation schedule adopted by the Legislature in 2006.

On February 27th, 2015, Ericksen rose on the Senate floor to speak to his concerns and move his amendment, Amendment 53.

The Senate Republicans, who then held the majority, could have voted as a bloc to adopt Ericksen’s amendment. But they didn’t.

Instead, they split.

Some of them voted with Ericksen in favor of the amendment’s adoption. Others, like then-Transportation Chair Curtis King of Yakima, (who spoke against the amendment), voted it down along with most Democrats.

I’m told by legislators that O’Ban was among the nays on Ericksen’s amendment. It wasn’t a roll call vote, so I don’t know for sure. But if O’Ban *was* a nay, that makes his yapping about “unfair car tab taxes” all the more duplicitous.

Why would some of the Senate Republicans vote down Amendment 53? The answer is that they knew that Sound Transit was already receiving MVET revenue that had been pledged to pay off bonds using that older valuation schedule, and it really wouldn’t make sense to use one schedule to calculate part of a vehicle owner’s MVET owed while using a different schedule to calculate the rest.

Democratic Senator Marko Liias explained this during his brief speech against Amendment 53 on the floor. Sound Transit General Counsel Desmond Brown and Pacifica Law Group’s Paul Lawrence (attorneys for Sound Transit) explained it all over again, even quoting Liias, in their reply brief to the plaintiffs in the case that was heard today for the benefit of the Washington State Supreme Court.

Here’s Brown and Lawrence:

The Senate Transportation Committee bill report explained that “[t]he depreciation schedule remains the same as the MVET schedule in effect for the existing MVET until the bonds are repaid and then the schedule switches to the schedule that is in effect at the time the MVET is approved by the voters.

During the floor debate, Senator Ericksen expressed dissatisfaction with this approach and proposed Amendment 53 to make three changes: (1) repeal the existing depreciation schedule then codified in RCW 82.44.035, (2) enact a new depreciation schedule to replace the repealed RCW 82.44.035, and (3) eliminate Sound Transit’s authority to apply the 1996 depreciation schedule to the new 0.8% MVET.

Senator Liias spoke against the amendment explaining that because the existing 0.3% MVET must be calculated using the 1996 depreciation schedule until the bonds are repaid, “it didn’t make sense for the period of time that there are bonds overlapping for taxpayers to have two different values for their car based on the two different values that are in the statute….”

Senator Liias argued that the Legislature should “stick with the old table until the bonds are paid off and then switch to the new improved and upgraded tables for ease of collection and to make it more simple for our taxpayers as they pay these taxes…”

Amendment 53 failed a floor vote.

The Senate then passed [2ESSB] 5987.

At the House committee hearing, Representative [Matt] Shea introduced Amendment H2685.1, which was substantially identical to Senator Ericksen’s Amendment.

The House Transportation Committee rejected the amendment.

Thus, these two rejected amendments, one in the House and one in the Senate, would have repealed and replaced the existing depreciation schedule enacted in 2006 (RCW 82.44.035) and would have removed the requirement that the 1996 schedule apply to the new Sound Transit MVET authorized by the [2ESSB] 5987.

To reiterate, the Senate Republicans had the power in 2015 to insist on language in the Connecting Washington package that would have prevented the use of the older valuation schedule for the portion of the MVET that was slated to be increased with ST3. But instead they opted to keep the old schedule in use.

And for a sensible reason.

Disappointingly, rather than admit their part in this to the people who are upset about their post-2016 vehicle fees, the Senate Republicans have repeatedly attacked Sound Transit and made the agency their bogeyman, using Dori Monson and Tim Eyman’s well worn playbook.

They instructed Manka Dhingra’s 2017 Republican opponent Jinyoung Englund to make vehicle fees an issue in her campaign. She did, but to no avail, as voters in the 45th Legislative District handily backed Dhingra for the position.

And now they are supporting both this lawsuit and Tim Eyman’s I-976.

They hope at least one, or maybe both, will succeed so they can realize their goal of sabotaging Sound Transit 3. Of course, if I-976 is implemented, it would defund many state and local transportation projects, not just Sound Transit’s regional projects. But that’s a price that true road warriors will gladly pay.

The lawsuit, on the other hand, more narrowly targets the provision of the legislation that gave Sound Transit the authority to increase its MVET. Taylor Black is the first of the named plaintiffs, and so the case is known as Black v. CPSRTA.

Black and the other plaintiffs are represented by attorneys who have also represented disgraced initiative promoter Tim Eyman: Joel Ard and David DeWolf.

While Eyman enthusiastically supports their lawsuit, he’d prefer to overturn ST3 with I-976, because then he would get the credit for having sabotaged the expansion of light rail north to Everett, south to Tacoma, west to Ballard and West Seattle, and east to Issaquah and downtown Redmond.

Considering that the plaintiffs couldn’t convince a trial court judge to rule in their favor and considering that precedent appears to be on Sound Transit and the State of Washington’s side, our guess is that this lawsuit will end in failure.

Regardless, we expect Senate Republicans to continue attacking Sound Transit in the years ahead. They seem very eager to undo the transit portion of the Connecting Washington package while keeping the highways portion, essentially reneging on the deal they struck with Democrats to keep Washington rolling four years ago. All while failing to acknowledge to voters that they bear the responsibility for the decision not to change how vehicles are valued.

There’s way too much bad information about Sound Transit circulating, whether on social media, talk radio, or other venues. The Senate Republicans are responsible for a good chunk of it, and they must be held to account for it.

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