GOP Senators Continue Quest to Slash Car Tab Fees

Legislation passed Tuesday lowers the tax rate from 1.1 percent to 0.5 percent and requires Sound Transit to calculate fees using the Kelley Blue Book.

OLYMPIA — Republican senators renewed their push Tuesday to make Sound Transit redo how it calculates car tab fees, a move they contend will give consumers relief from surging costs of registration renewals.

On a 25-22 vote, the Senate passed legislation to trim part of an increase in the motor vehicle excise tax rate that voters approved last year to help pay for future light rail expansion. The bill also would force Sound Transit to use a different method of valuing vehicles in its calculation of the fees.

With the reforms, supporters said future fee increases would be smaller and vehicle owners hit with higher bills earlier this year will be entitled to rebates.

Taxpayers “absolutely need comprehensive tax relief before we end our business and go our separate ways,” said Sen. Steve O’Ban, R-University Place, the bill’s prime sponsor. “This is the time to provide relief.”

Tuesday marked the third time the Senate passed a version of this bill. Each time Democratic senators united in opposition, saying it will undermine the ability of Sound Transit to complete the promised expansion.

They endorsed a compromise drafted by Sen. Marko Liias, D- Lynnwood, to retain the entire voter-approved increase but use a different valuation methodology. This would result in a modicum of financial relief without damaging the long-term plan, they said.

Tuesday’s vote came in the final week of a second special session in which the Democrat-controlled House and Republican-led Senate are trying to reach agreement on a new two-year state spending plan. A budget must be in place by July 1 to avoid a partial government shutdown.

Sen. Steve Hobbs, D-Lake Stevens, said in a floor speech he was “kind of surprised that at the tail end of the second special session that we’re not bringing up bills that have more bipartisan support.”

Hopefully, he continued, if it gets to a third extra session “we can come together and reach a compromise that both parties can support.”

While the car tabs matter isn’t a component of the budget, it is stirring enough contention between the House and Senate to make its resolution a potential part of a final deal.

Senate Republicans want to repeal a chunk of what voters embraced last fall when they passed Sound Transit 3, which calls for adding 62 miles of new Link light-rail line.

Under the ballot measure, the motor vehicle excise tax rate rose from 0.3 percent to 1.1 percent, the sales tax went up a half-percent in the taxing district and there’s a first-ever property tax assessment collected by Sound Transit.

The near quadrupling of the excise tax rate resulted in some vehicle owners paying hundreds of dollars more for their tabs. Part of the reason is Sound Transit uses a 1990s depreciation schedule that overvalues vehicles. The Legislature updated it in 2006 to better reflect the actual values of vehicles as they age.

But a 2015 law enables Sound Transit to keep using the older method until 2028, when bonds sold in the earlier phases of expansion are retired. That’s also when the previously existing 0.3 percent rate expires.

The GOP legislation passed Tuesday, Senate Bill 5893, slashes the tax rate from the current 1.1 percent to 0.5 percent and requires Sound Transit calculate car tab fees using vehicle valuations in the Kelley Blue Book.

Majority Democrats in the House want to make Sound Transit use the 2006 table. Under a bill that’s twice passed the House, vehicle owners would get a rebate for what they save by going to a different schedule.

There’s been no serious negotiations between House and Senate members on a compromise, O’Ban said Tuesday.

jcornfield@heraldnet.com

A version of this story originally appeared in the Everett Herald.

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