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Washington State Attorney General said the Sound Transit MVET Should Only Be Used to Repay the 1999 Bonds, but the State Supreme Court Ruled Otherwise

The threat to Sound Transit's second biggest funding source notched up in autumn 2005. The threatened funding source is the 0.3% motor vehicle excise tax (MVET) surcharge on top of the State's $30 tab fee. The higher threat results from a legal filing by the State Attorney General, Rob McKenna, new to the job January 2005 and now able to take a fresh look at an ongoing case underway since late 2002.

As a result of the Initiative 776 passage in 2002 that tried but failed to kill all MVET above $30, AG states that Sound Transit should use its ongoing MVET surcharge collections only to pay off 1999 bonds, and that's it. Through legal maneuvers, Sound Transit has been able to hang on to all of its MVET because of those bonds. The agency has also been planning to use that MVET to keep on expanding its rail programs.  For example, the MVET is part of the funding of the three-mile tunneled extension of light rail from downtown Seattle to Husky Stadium at University of Washington.

The Supreme Court in December 2006 ruled that Sound Transit can keep on collecting and spending its MVET, and use it for any purpose of the agency.

Eric Pryne's story "State to court: curb vehicle tax" in The Seattle Times, September 10, 2005, reports where the Attorney General stands: "McKenna said in a prepared statement yesterday that he's obligated to defend state laws, including voter-approved initiatives. 'Sound Transit has decided to frustrate the voters' expressed desire,' he said....McKenna ripped Sound Transit for insisting on 'spending that tax money on whatever it pleases.'"

bulletAttorney General's filing (119K doc)
bulletFiling from intervenor citizens (165K pdf) represented by attorneys Rowley and Klauser who are arguing not only that Sound Transit's MVET should be cut off, but also that ST is illegally formed. AG does not agree that ST is illegally formed.

Note: Sound Transit pledged in October 2003 to the Federal Transit Administration and Congress that the agency can complete the Initial Segment of Central Link light rail from Pine Street to Tukwila even with the MVET cut back to just enough to pay back the 1999 bonds for which the MVET is collateral. However, no such plan or promise exists with regard to extending the Initial Segment to SeaTac Airport or northward toward University District.

In its Supreme Court filing, Sound Transit does not reverse this positioning on MVET reduction impact, which the brief summarizes as follows: "The MVET is anticipated to provide an estimated $746 million of revenue through 2009, and $2.673 billion through 2025, three years before the last 1999 bonds are repaid.  Without this MVET revenue, the transit system cannot be built as planned, and the utility of the completed transit projects and services will be substantially diminished.  A loss of revenue would delay the construction of important transit projects, such as park-and-ride facilities, transit centers and remaining commuter rail stations (in Lakewood and Mukilteo), and would require service cut-backs to completed projects."

The details in this prediction stem from Sound Transit's pig-headed commitment to spend billions on new urban railroads even as costs escalate, and revenue availability tightens.

Sound Transit already has plenty of money even without the MVET to build a world-class high capacity transit system based on bus rapid transit (BRT) principles. BRT could be implemented throughout the Puget Sound region in just a few years with the tax money the agency is already collecting. To go this way, the Board would need to use its existing flexibility to cut back on the unproductive Sounder and Link rail programs, and redirect resources to expand incrementally and purposefully the Regional Express bus service toward greater BRT capability.

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Last modified: February 07, 2011