The Sound Transit Board of Directors has voted overwhelmingly in favor of a one percent property tax increase that is expected to generate an additional $1.36 million for the regional transit agency next year.
Although the amount seems miniscule compared to the agency’s overall budget – $2.4 billion for this year – board members opposed to the increase say it sends the wrong message to Pierce and Snohomish County voters who approved with solid majorities Initiative 976’s $30 car tab cap, which included the repeal of a Sound Transit motor vehicle excise tax (MVET).
“There is a significant amount of tax frustration as was evidenced by the voter response to initiative 976,” Pierce County Councilmember Bruce Dammier told colleagues at the board’s Nov. 21 meeting. Pierce County approved I-976 by 66 percent, while 58 percent of Snohomish County voters said “yes.” In King County, it was the opposite; voters rejected the initiative by 40 percent.
“I think this gives this board an opportunity to show that we are listening and appreciate, to some degree, the frustration…particularly at the end of the line.”
In 2016, Pierce, King and Snohomish counties voted to approve ST3, which included a property tax of up to $.25 per $1,000 in assessed value (AV). The rate has decreased from the maximum in 2017 to an estimated rate of $.20 per $1,0000 AV for 2020. However, annual property tax revenue has still increased in that timeframe from $140 million to $149 million thanks to rising property values in the central Puget Sound region.
Under state law, taxing districts can only increase revenue by one percent per year. As a result of the resolution, Sound Transit now anticipates collecting $155 million next year from the property tax levy. Property taxes are expected to account for six percent of Sound Transit revenue through 2041.
Board member and King County Executive Dow Constantine said the rate increase was necessary because even with it “the cost of inflation, not to mention population growth, is considerably higher than the one percent. Sound Transit is also facing continued reductions in its revenues due to this one percent. (To) Further exacerbate that damage seems irresponsible.”
Aside from Dammier, the only other board member opposed was University Place Mayor Kent Keel. He told colleagues his city uses the one percent property tax increase “every opportunity we can because that’s how we pay for our police; it’s the only mechanism we have. Even with that, it doesn’t keep pace with what the inflation is.” However, he added he is against increasing the ST3 property tax rate “given all the discussions that we’ve had about taxes and budgets and the things that we’re going through right now, plus given the fact that we can raise revenue in other areas.”
In a recent blog post, former state legislator and Washington Policy Center Research Fellow Mark Harmsworth wrote “this will not be the last tax that Sound Transit will pass. The agency is considering additional expansion. It has allocated several million dollars to study the expansion as part of the ST3 package. This will result in another ballot measure, Sound Transit 4.”