Left unresolved by state lawmakers during last year’s legislative session was how to provide adequate car tab relief for Puget Sound drivers paying new Sound Transit 3 taxes. Those taxes include a new motor vehicle excise tax (MVET) based on a 1990s depreciation schedule that varies from other valuation formulas used by Kelly Blue Book or the National Automobile Dealers Association.
During a January 4 legislative preview with the Associated Press, House Speaker Frank Chopp (D-43), said that Democrats planned to act soon on the issue after the session begins.
State Rep. Kristine Reeves (D-30) has already filed the first bill for the session, which starts today, attempting to address those concerns. HB 2357 would allow drivers to set up semiannual or quarterly payment plans for the MVET, but only if the amount owed is greater than $200. The payments would also have to be equal amounts, and a $5 service fee would be charged for each payment.
The proposal is likely to be opposed by Republican lawmakers, including those who headed legislative investigations into the regional transit agency last year. In an October 23 letter to four committee chairs in both the House and Senate, Sens. Mike Padden (R-4) and Steve O’Ban (R-28) called for “substantial and meaningful” tax relief on the MVET.
But with Democrats now in control of the Senate, Republicans may have difficulty getting their preferred car tab relief through. A further setback for those hoping for a reduced MVET came when Tim Eyman recently announced there weren’t enough signatures to get his $30 car tab initiative on the ballot.
However, Democrats have publicly discussed plans to renew efforts for a separate proposal sponsored by Rep. Mike Pellicciotti (D-30) during last year’s session. It would offer drivers a refund for the difference between the vehicle’s value under the 1990s depreciation schedule and a 2006 formula. The bill passed the House 64-33, but the Senate sent it back to the House Rules committee.
Other bills backed by House Democrats last year include HB 2148, which would have allowed Sound Transit to create a tax rebate program for certain households in King County, while Senate Republicans proposed SB 5893, which would have had Sound Transit rely on Kelly Blue Book or the National Automobile Dealers Association to determine a vehicle’s worth. More controversial solutions would have permitted local governments to nullify ST3 taxes by a majority vote of the council or voters.
Sound Transit officials previously warned that reducing the MVET would impact their financial planning and possibly delay ST3 projects. Statehouse observers note that the regional transit agency may push for state funds to make up for the financial loss from reduced MVET revenue.
HB 2357 is scheduled for a January 11 public hearing of the House Transportation Committee.