Just days after the State Supreme Court heard oral arguments in a lawsuit against Sound Transit’s ST3 motor vehicle excise tax (MVET), the plaintiffs have offered a settlement that could avoid a high court ruling on the case and with it “grave financial doom for Sound Transit.”
In a Sept. 12 letter to Sound Transit, attorney Joel Ard offered to settle the case if the regional transit agency agreed to refund vehicle owners $125 million already paid and revert the MVET to a 2006 vehicle depreciation schedule. All in all, the move could cost Sound Transit roughly $1 billion from its ST3 tax package approved by central Puget Sound voters in 2016.
However, that may be a small price to pay to avoid a high court ruling declaring the 2015 statue approved by the state legislature unconstitutional. If that were to occur, Sound Transit attorneys have warned that it would cost them $15-18 billion over ST3’s timeframe through 2041 and force them to either reduce project scope or delay competition.
A court decision unfavorable to Sound Transit could also boost a campaign by initiative sponsor Tim Eyman via Initiative 976 limiting car tabs to $30; Sound Transit says if approved, the initiative would reduce their revenue through 2041 by $7 billion.
On top of that, Ard’s letter warns that if it loses the Supreme Court case, Sound Transit would also have to mail $500 million worth of refunds immediately after the decision. If the case isn’t decided before December, Sound Transit has to inform the U.S. Department of Transportation and risk $1.4 billion in federal funding it hopes to obtain.
“I and my clients do not want, and have never sought, this disastrous outcome,” Ard said.
Recently Sound Transit has encountered significant hurdles in its legal fight. Just hours before the Sept. 10 high court hearing, State Attorney General Bob Ferguson pulled out of the case when it was discovered the transit agency and state Department of Licensing were using a 1999 vehicle depreciation schedule rather than the 1996 schedule Sound Transit repeatedly claimed in its briefs that it is legally bound to use.
During the Sept. 10 oral arguments, some justices expressed frustration over difficulties locating the statue in dispute, while others pushed back against arguments by Sound Transit regarding the financial loss if the court rules against it.
“It is hard to identify any argument Sound Transit made in favor of the constitutionality of the 2015 law that survived the Court’s scrutiny,” Ard wrote. “It appears highly likely the Court will strike down the ST3 MVET.