Sound Transit’s general counsel concludes that Tim Eyman’s I‑976 won’t affect ST3

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to effec­tu­ate the poli­cies, pur­pos­es, and intent of this act and to ensure that the motor vehi­cle excise tax­es repealed by this act are no longer imposed or col­lect­ed, an author­i­ty that impos­es a motor vehi­cle excise tax under RCW 81.104.160 must ful­ly retire, defease, or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:

1. 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
2. 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.

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.