Democrats worry planned cuts to car-tab fees could endanger Tacoma light rail

TACOMA, Wash. — Democratic legislators might change their plan to lower car tab-fee increases tied to the Sound Transit 3 construction package because some fear the resulting revenue loss could delay or endanger plans to extend light rail to Everett and Tacoma.

State Sen. Marko Liias, a Lynnwood Democrat, said Wednesday the party is looking at a range of ways to keep a promise to provide relief to many drivers surprised at the cost of renewing their car tabs recently. Many vehicle owners saw big bills due to voter-approved fee increases needed to help finance the Sound Transit 3 package.

But Liias, one of his party’s key lawmakers on the Sound Transit 3 issues, said he also wants to limit the hit to Sound Transit’s bottom line.

At issue is the way Sound Transit values vehicles for purposes of the Sound Transit 3 financing package. The current method uses a formula from the 1990s to estimate values. It often overestimates a vehicle’s worth during the first 10 years of its life, inflating fees for some.

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While some lawmakers expected Sound Transit to use a more accurate replacement of the vehicle valuation schedule approved by the Legislature in 2006, Sound Transit planned to use the older method through 2028, when bonds from older transit projects are retired.

The preferred bill from Democrats — who own majorities in both chambers of the Legislature — would give people refunds or credits for the difference between what they’re being charged now and what their car-tab fees would have been under the 2006 formula.

Doing that would have taken $780 million from the $54 billion transit package approved by voters in 2016. The legislation ultimately would have cost Sound Transit $2.2 billion dollars because the agency would need to borrow more money to complete the projects approved as part of Sound Transit 3, said Geoff Patrick, a spokesman for the agency.

House Bill 2201, sponsored by state Rep. Mike Pellicciotti, D-Federal Way, was tabled after lawmakers scheduled the measure for a vote in the House.

“I am convinced that there are probably some impacts that are sort of a little bit bigger than the agency can handle on their own,” Liias said of HB 2201. “I don’t want to cut the rebate to consumers. I want to find other ways we can help mitigate the impacts.”

Liias said he initially believed HB 2201 effectively gave drivers a break without hobbling Sound Transit but said uncertainty around a $5 billion chunk of federal funding from the Trump administration for the transit agency and other factors made him think twice.

That uncertainty also comes as pro-transit advocates have been in uproar over the plan to cut Sound Transit’s budget. Those groups believe the state should offset any rebates for drivers with other state money to keep ST3 on track. Sound Transit, too, believes any reductions in car tab-fee revenue should be offset, according to Patrick.

Liias said Democrats are unlikely to make enormous strides toward either pro-transit groups or Republicans looking to offer an even bigger break on car-tab fees to drivers. He said he expects Democrats to keep the existing rebate plans in the bill but look for ways to reduce the impact on Sound Transit.

One of those options could be to see if there are less expensive ways for Sound Transit to build in state-owned right of ways, Liias said.

“I’m not with the transit advocates in believing that this is sort of the sky is falling and we’re not going to get light rail,” Liias said. “But I also am convinced based on everything we’ve seen over the last year it probably makes sense to just have a conversation about how we make sure light rail gets to Everett and Tacoma like it’s been promised.”

Liias said he was particularly worried about delays to the Everett and Tacoma light rail connections because those cities are the last stops in the expected new lines.

Patrick said “it would fall to the Sound Transit board to make the hard decisions about how to absorb the financial impacts, including which projects to put on hold or delay.”

The ST3 package was approved by a majority of voters in its three-county taxing district, but in Pierce County, most voted against it. The ST3 taxing package is expected to raise about $28 billion in revenue through a combination of increased sales taxes, car-tab fees and property-tax hikes over the next 25 years.

That money would pay to extend light rail from Tacoma to Everett, while improving commuter rail and bus service throughout the Puget Sound region.

Pellicciotti said Thursday he doesn’t expect any tweaks agreed to by Democrats to “fundamentally” change his legislation to offer rebates and that he believes the current measure would still be able to “keep local light rail projects on track.”

Others in his party share Liias’ concerns.

House Majority Leader Pat Sullivan, a Covington Democrat, said on TVW's Inside Olympia program this week that lawmakers are "working with Sound Transit on how we can ensure that we have fairness to the taxpayers but also that Sound Transit has the adequate funding to complete the projects that they need to complete.

“That is critical and our caucus feels very strongly about that.”

Democrats still hope to pass a car-tab reduction early in the 60-day legislative session that ends in March, Liias said.

KIRO