Disgraced initiative promoter Tim Eyman may have thought when he put together Initiative 976 that he had designed a missile that would effectively blow up Sound Transit’s voter approved Phase III system expansion, but Sound Transit’s general counsel has concluded that the initiative won’t have any adverse affect on the agency’s finances because it doesn’t actually do what Eyman intended it to do.
To elaborate: Eyman’s stated aim with Initiative 976 was to repeal Sound Transit’s motor vehicle excise tax, or MVET, which is one of the agency’s primary revenue sources. But Eyman missed. The provision in I‑976 that ostensibly repeals the MVET only takes effect if Sound Transit has the power to defease the bonds those tax revenues are pledged to prior to when they are due to mature.
Sound Transit does not have that power because the terms under which it sold the bonds don’t allow for early defeasement or retirement. Sound Transit is obligated under the Washington State Constitution to honor its contracts with bondholders.
“The initiative does provide that Sound Transit should retire those bonds, but it does not provide a date or deadline by which that occurs,” agency general counsel Desmond Brown told the Sound Transit Board of Directors.
You can see for yourself what Brown is referring to by reading Section 12 of I‑976:
NEW SECTION. Sec. 12. A new section is added to chapter 81.112 RCW to read as follows:
In order to effectuate the policies, purposes, and intent of this act and to ensure that the motor vehicle excise taxes repealed by this act are no longer imposed or collected, an authority that imposes a motor vehicle excise tax under RCW 81.104.160 must fully retire, defease, or refinance any outstanding bonds issued under this chapter if:
- Any revenue collected prior to the effective date of this section from the motor vehicle excise tax imposed under RCW 81.104.160 has been pledged to such bonds; and
- The bonds, by virtue of the terms of the bond contract, covenants, or similar terms, may be retired or defeased early or refinanced.
The word “if” in this section, and the subsections that follow it, are the key to understanding why Eyman’s swing was a miss. Sound Transit is only obligated to fully retire, defease, or refinance any outstanding bonds issued under the authority the Legislature gave it if the bonds may be retired, defeased early, or refinanced.
And the terms under which the bonds were sold don’t allow that.
So, it appears that regardless of what happens to I‑976 in the courts, ST’s bonds stay in place, as does the tax revenue that supports them, from the motor vehicle excise tax paid by residents of urban King, Pierce, and Snohomish counties.
The agency has assessed that about 53% of voters in its jurisdiction voted against I‑976, so keeping the taxes in place is in fact the will of the people it serves.
“The initiative and the Attorney General’s voter pamphlet summary both make clear that state law requires the MVET [motor vehicle excise tax] to be collected until Sound Transit’s bonds are repaid,” the agency said in a statement released yesterday following the board’s afternoon meeting and executive session.
“We intend to continue fulfilling our obligation to advance critical voter-approved projects and services while we monitor litigation and closely review legal issues surrounding this initiative,” the statement added, alluding to the lawsuit filed by Garfield County Transportation Authority and a coalition of local governments against the state. “No action by the Board is needed or prudent at this time.”
It is not clear where all the language that’s in Initiative 976 actually came from.
While Eyman filed Initiative 976 and is the attributed author, and some parts of the measure bear all the hallmarks of his authorship (like the intent section), other parts sound to me like they were written by unnamed collaborators.
For example, Section 12, seen above.
I have a hard time believing this piece of Initiative 976 came from Eyman.
Whoever wrote it either didn’t bother to acquaint themselves with the terms and conditions of Sound Transit’s bonds (which you can read below if you are so inclined, but be warned it’s a long document) or else wasn’t actually interested in helping Eyman gut Sound Transit like a pig, as Eyman said he wanted to do.Terms of Sound Transit’s November 2016 bonds
Were the measure to be implemented as Eyman intended, Sound Transit would lose a significant chunk of its annual revenue, which would negatively impact its ability to borrow money, jeopardizing up to $20 billion in funding, as previously assessed by the agency. But it does not appear that will happen because Eyman didn’t draft an initiative even capable of gutting Sound Transit like a pig.
This is perhaps the most compelling evidence of all that Eyman is not an “initiative king” or “kingpin” as he has often been described. He is a cunning pitchman and media manipulator, to be sure, but he is incompetent at legislating.
A true “initiative king” would draft initiatives that hold up in court and accomplish the stated aims of their creator. I‑976 is a failure on at least the latter count. We’ll see what the courts have to say about its constitutionality, or lack thereof.
Pretty much every part of I‑976 is a lie. The measure does not require vehicle fees to be limited to thirty dollars (and even Eyman now admits this), it doesn’t allow “voter-approved charges” to be exempt from the falsely advertised thirty dollar cap as its title says, and the measure does not repeal or alter Sound Transit’s MVET.
Eyman, aided and abetted by a number of people in the mass media (we’re looking at you, Dori Monson) sold people in counties like Pierce a bill of goods in this election with Initiative 976. Eyman and all who participated in the perpetration of this con against the voters should suffer consequences for their dishonesty.