John Niles, CETA, Sound Transit Board Testimony, July 14th 2005
I'm representing CETA the Coalition for Effective Transportation Alternatives, an association of citizens who have documented the poor performance of your rail investments, and who insist you use available flexibility to devise a better transit plan with what remains of your resources.
But speaking of your resources, and your intent today to stretch those resources to build light rail from Tukwila to SeaTac Airport: there is a slippery-slope issue I am going to raise here with respect to the risk of losing some of the Sound Transit MVET tax, a tax now yielding around $60 million per year, the potential loss in total financial capacity calculated at about $700 million.
Sound Transit's MVET has been under threat of rollback since 2002, when statewide voter Initiative 776 passed, rolling back that tax to $30, and meant to eliminate Sound Transit's 0.3% MVET add-on, but so far failing to do that.
The State Government has continued to collect your MVET and pass it to you, because of the way the MVET is pledged as security on bonds from 1999. However, the MVET is now under the cloud of the Supreme Court judgment from October 2003 that the I-776 initiative is constitutional. While King County Superior Court ruled in Sound Transit's favor last November, a group of citizens represented by attorneys Rowley and Klauser are continuing to pursue the matter, with a new comprehensive brief filed with the Supreme Court just recently on July 8th.
The availability or not of this MVET in the years ahead is important to the affordability of the light rail extension you are voting on today. However, I didn't see this fact mentioned in the staff paper for your vote today. Why not? The fragility of the MVET is something the Board must take into account.
Other government officials recognize the fragility. In 2003, the Federal Government insisted on a contingency plan for the financing of Central Link Initial Segment if the MVET were to be curtailed. You on the Board were required to affirm formally the contingency plan's validity, which you did, in Resolution R2003-20 of October 23, 2003. What about now? Where is the affirmation of that contingency for this new extension of Link Light Rail that you intend to approve today?
Supreme Court rulings lie ahead on the continuation of the MVET. It may drop from 0.3% to 0.1%, just enough to pay off old bonds. The State Attorney General supports direct review of this question by the Supreme Court.
Last March 2, Attorney General Rob McKenna was quoted in The Olympian newspaper saying, "I am urging the state supreme court to accept on direct review an appeal of the King County Superior Court's decision that allows Sound Transit to continue collecting the Motor Vehicle Excise Tax not just for bond retirement, but for new bonds. Sound Transit should not be allowed to spend MVET revenue until those bonds are retired."
Sound Transit Citizen Oversight Panel chairman Larry Shannon noted in a letter to the Board dated November 13, 2003: "The Supreme Court decision on Initiative 776 is fraught with potential dangers for Sound Transit....We encourage you to insist on updated financial planning using the most conservative possible assumptions...Sound Transit's reputation and trust with the public may be at stake. We encourage you to keep public confidence in mind as you determine your course of action on thie matter..."
In summary, the future, final Supreme Court ruling on Sound Transit's MVET may not go Sound Transit's way. The MVET could be unavailable to construct and operate Airport Link. Is that possibility covered in the financial plan?
Heads up ladies and gentlemen. And thank you for listening.
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