The Senate Transportation Committee has cleared a bill backed by key Senate Democrat leaders that would alter the way Sound Transit calculates its motor vehicle excise tax (MVET) while also repealing sections of Initiative 976 should it survive its legal challenge.
While Chair Steve Hobbs (D-44) and bill cosponsors view the legislation as a moderate approach to the ongoing dispute over car tab taxes, opponents of SB 6606 sponsored by Majority Floor Leader Marko Liias (D-21) say it won’t provide the relief taxpayers demand.
The bill is one of three concerning parts or all of Initiative 976 discussed at a Feb. 4 public hearing. The other two bills sponsored by Sen. Phil Fortunato (R-31) and Sen. Steve O’Ban (R-28) would implement most or all of I-976, which capped car tabs at $30.
SB 6606 differs by repealing I-976 provisions eliminating Sound Transit’s MVET but using a 2006 vehicle depreciation schedule that better reflects the true value. The change is expected to reduce Sound Transit revenue by $1 billion through 2041. Last year, it was discovered the regional transit agency was collecting car tab taxes using a different schedule than it claimed.
The bill also creates a special reduced schedule for passenger vehicles and light trucks between 12-15 years old, while also allowing drivers to set up quarterly or monthly payment plans for the MVET through their Good to Go! Accounts.
Hobbs says that while the new schedule is not based directly off Kelley Bluebook, “it does match it very closely.”
He added that SB 6606 is intended to “smooth out” existing car tab taxes. “I know this is very contentious. I think both sides have brought up some good points.”
However, O’Ban said “this is a bad idea,” though he added his main objection concerned the repeal of the I-976 provision.
“(I) can’t believe this is before us,” he said.
Washington Policy Center Transportation Director Mariya Frost describes the bill as “essentially a hedge. Taxpayers would receive some guaranteed relief, but not all the relief they voted for in I-976. To do that, however, the bill mingles changes to existing policy with changes to an initiative, which would require a two-thirds vote from legislators.”
Lawmakers have wrestled with the issue of high car tab taxes since ST3 was approved by voters in November 2016. However, few have managed to clear their respective chambers. In 2018, Sen. Patty Kuderer (D-48) sponsored SB 5955, which would have provided retroactive credit for drivers who paid the MVET based on an outdated depreciation schedule. The bill was passed by the Senate 30-14 but was unable to land a House vote.
SB 6606 has not yet been referred to a committee.