Updating car-tab formula would cost Sound Transit billions

Sound Transit has agreed to work with the state legislature on concerns over car tab fees.

Voters approved an increased car tab tax when they voted for the Sound Transit 3 package in November. However, as car-tab bills began arriving, the increases shocked some voters. And there's growing outrage over the way the tax is calculated.

The tax is based on the value of a car, but Sound Transit uses an outdated model to calculate its fee. It inflates vehicle values, bringing in higher revenues.

Their formula hails back to the 1990s. Washington state adopted a new, updated formula in 2006, but Sound Transit has yet to follow suit. They say they're locked into the older valuation system until 2028 when certain bonds are retired.

But this system — and the fact that Sound Transit is aware of its flaws — has left many outraged.

“Sound Transit is ripping us off, and you know it,” said Tim Eyman. “It’s infuriating. And this isn’t going to go away by all of you saying, well we have to rip off the tax payers because if we treated them fairly, and taxed their vehicles honestly, we’d lose $6 billion.”

Sound Transit CEO Peter Rogoff said they would lose billions if they update their formula early, and that would impact their ability to deliver on promises made to voters.

"The loss of considerable amounts of revenue would trigger a process similar to what the board already went through following the last recession, where a number of projects had to be either deferred or delayed," Rogoff said. "When we restart them, obviously they're delivered to the voters much later and they are more expensive."

Sound Transit board members said voters knew what they were signing up for. There were calculators to show what you'd pay for your car during the Sound Transit 3 campaign.

Still, they passed a motion Thursday directing Rogoff to work with legislators on possible solutions, with the goal of delivering projects as scheduled.

Sound Transit board member and mayor of Tacoma, Marilyn Strickland, said it’s important for them to take a good look at the car-tab fees issue. But as a board they would have to weigh some priorities.

“What’s going to be more important to us, looking at delivering service within a certain time frame because we know we have one of the fastest growing regions in the nation? Or are we going to pull back? And so this will not be an easy discussion, but I want to make sure that we have to understand there are consequences, there are promises that have been made,” Strickland said.

More than a dozen bills have been introduced in the legislature targeting Sound Transit and the car-tab tax.