When voters approved Sound Transit 3 in November– with its $54-billion price tag — they said OK to an increase in their car tab fees: eight-tenths of one percent.
Those higher taxes went into effect last week, and what many voters didn’t realize is that Sound Transit uses an out-dated method to determine the value of your car. A method that likely taxes it at a rate far higher than it should be.
It also turns out Sound Transit could be doing something about it, but it isn’t.
Sound Transit CFO Brian McCartan told lawmakers in Olympia that the agency’s hands are tied, that it must use the old car tab valuation until the original bonds — the ones issued in 1999 — are paid off.”
“We’re essentially contractually committed to maintain the depreciation schedule as established by state statute while the bonds were outstanding,” McCartan said.
Sound Transit had a chance to use the more driver-friendly 2005 depreciation schedule when it drew up ST3, but it didn’t. McCartan said the agency chose to use the old method because it was easier.
“It was seen as clean or simple, or to be able to have a single evaluation schedule that was used, and because the prior schedule is required to be used that was the way the statute was written — was that the ST3 collections would use the schedule that was in place at the time that the bonds were issued,” he said.
Sure it’s more advantageous to Sound Transit, but that wasn’t the concern.
The question was asked: Why not refinance or simply pay off those old bonds so the public could get some relief?
“Sound Transit or the state or any other agency in making a decision about the fees or the bonds would look at the financial implications of doing that and decide whether that was in the interest of the agency to retire the bond,” McCartan said.
So for Sound Transit, its concerns are more important than taxpayers’ concerns. Senator Dino Rossi called McCartan on that.
“The agency decided, in the best interest of the agency, they should be figuring out what’s in the best interest of the public,” Rossi said. “And the idea that you can refinance these or pay them off changes the whole dialogue. And it changes it in a large way of that we could actually get to something that made sense.”
Senator Phil Fortunato, a Republican, raised this question: “Why don’t we just pass a law saying to use a new schedule? Would that fix your problem?”
Sound Transit did not have a good answer for that and then started deflecting questions, saying its legal department would better be able to handle them.
The bottom line in all this: Both sides of the aisle are getting significant pressure to improve the system to reflect a vehicle’s true value.
Senator Curtis King said: “I’m hoping that Sound Transit will go back and look at that and see if there isn’t some way they can get an (Motor Vehicle Excise Tax) that is based on the real value of a car and not some inflated value that is out there in la-la land.”