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Car tab debate resumes in state legislature

The debate over car tab fees to pay for expanding Sound Transit is beginning again in the state legislature.

On Thursday, lawmakers will hold a hearing on a new bill to allow drivers to pay in installments.

Next week, a Democratic plan to provide modest relief could again reach the floor of the House.

Voters approved hiking car tab fees to pay for part of the $54 billion Sound Transit 3 package, but few people anticipated the backlash once renewals hit mailboxes.

The gripe is that cars are taxed on a state depreciation scale based on manufacturers suggested retail price, which is usually far higher than a car's real value.

The Democratic bill, that passed the House last year, would switch to using a formula based on 85 percent of MSRP.

Sound Transit provided some examples of how it would impact owners of a popular car in the taxing district, a Honda Accord EX.

The owner of a 2016 model would see the cost drop from $267 to $194.

The bill for a 2011 Accord would go from $152 to $93.

Prices would rise for some older cars.

For a 2006 accord, the Sound Transit fee would go from $35 to $52.

Sound Transit estimates a revenue loss of $780 million, but when you factor in the agency not being able to bond against lost revenue, Sound Transit says it's looking at a $2.2 billion loss.

"Any significant reduction in revenue would threaten our ability to deliver our light rail, commuter rail and bus rapid transit projects on the timelines we promised to voters," said Geoff Patrick of Sound Transit.

Patrick said if legislators don't somehow fill the gap, the agency would have to collect taxes longer and delay projects.

Republican Senator and Sound Transit critic Steve O'Ban of University Place said the Democrats' relief bill doesn't go far enough.

"I feel like this is a half-measure and in some ways I see it as the Sound Transit protection act, because it provides political cover to Sound Transit to get the issue away," O'Ban said.

On Wednesday, O'Ban introduced his own bill to lower car tabs much more, valuing cars based on Kelley Blue Book value.

He has also introduced legislation to have the Sound Transit board directly elected, and to allow cities or counties to opt out of the Sound Transit taxing district.

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