Commuters hop off the Link light rail train Tuesday at the University of Washington Tacoma campus while a bus drops off passengers at the Washington State History Museum in Tacoma. Sound Transit proposes spending $50 billion over the next 25 years to expand light rail, commuter train and express-bus services across the Puget Sound region. Some of that money would be spent to expand light rail from Federal Way to the Tacoma Dome Station and eventually on to the Tacoma Mall and Tacoma Community College. Voters would need to approve nearly $27 billion in new taxes this fall for the projects to move ahead. David Montesino dmontesino@thenewstribune.com
Commuters hop off the Link light rail train Tuesday at the University of Washington Tacoma campus while a bus drops off passengers at the Washington State History Museum in Tacoma. Sound Transit proposes spending $50 billion over the next 25 years to expand light rail, commuter train and express-bus services across the Puget Sound region. Some of that money would be spent to expand light rail from Federal Way to the Tacoma Dome Station and eventually on to the Tacoma Mall and Tacoma Community College. Voters would need to approve nearly $27 billion in new taxes this fall for the projects to move ahead. David Montesino dmontesino@thenewstribune.com

Local

New long-term taxes would pay for Sound Transit expansion

April 16, 2016 03:21 AM

UPDATED April 22, 2016 02:51 PM

Voter approval in November of Sound Transit’s proposed $50 billion expansion would result in a 108-mile light-rail network from Everett to Tacoma, Ballard to Bellevue.

It also would mean tax increases across three fronts.

The motor vehicle excise tax and the sales tax collected on behalf of Sound Transit would increase from current levels, and, for the first time in the regional transit agency’s history, it would levy a property tax.

The taxes would be collected for decades, well beyond the proposed build-out date of 2041.

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This from a Sound Transit online FAQ about the proposed ballot measure, called Sound Transit 3:

“As with virtually all major infrastructure projects, construction would be paid for in part using long-term bonds issued over the course of the project delivery period.

“Approximately 25 or 35 years after completion of the package, the retirement of those bonds would enable the agency to begin scaling back tax collections to the level needed to support ongoing operations and maintenance of the expanded system.”

That’s on top of taxes the agency already collects for two previous transit projects.

Supporters of the ballot measure, which the Sound Transit board will firm up in June, say the increased tax burden would pay for desperately needed expansions of light rail, express bus service and Sounder commuter rail across the Puget Sound region.

That includes 16 projects proposed in Pierce and South King counties.

One project would extend light rail from Federal Way to the Tacoma Dome Station by 2033.

That project, estimated to cost between $3.4 billion and $4.2 billion, would mean Pierce County riders one day could take light rail to Sea-Tac Airport or into Seattle from Tacoma.

“The case for light rail is simple: At peak capacity, a light-rail line can carry 16,000 people an hour — in each direction — absolutely reliably,” King County Executive and Sound Transit board Chairman Dow Constantine said during a speech last month.

“And even if you never intend to set foot on light rail, it’s still in your interest to build it, because every person who chooses to ride the train is one less driver snarling up traffic for you.”

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Others aren’t so sure.

The politically conservative Shift Washington website is a frequent critic of Sound Transit. In a post last month, it called the tax-based funding plan for Sound Transit 3 an open-ended “scam.”

“As if predicting their future incompetence, the liberals running Sound Transit made sure to add a ‘no sunset’ clause in ST3,” the post states. “In other words, Sound Transit could take as long as it wants to complete this plan’s pie-in-the-sky promises. Taxpayers’ hard-earned dollars would continue to flow in.”

Sound Transit estimates the new taxes would raise about $27 billion during the 25-year construction phase and cost the average adult living in Pierce, King or Snohomish counties $200 per year, or about $17 per month.

The exact amount it would cost each adult or household depends on many variables, however.

The Sound Transit board is taking public input on the proposal through April 29 and hopes to firm up a ballot proposal in June to put before voters in November.

Here’s a look at the proposed tax increases:

Motor vehicle excise tax

Also known as the car-tab tax, it’s the fee motorists pay each year to renew their license plates. The cost varies, depending on where a person lives.

Part of the overall fee paid by residents in Pierce, King and Snohomish counties goes to Sound Transit.

The agency currently collects 0.3 percent of vehicle value to fund projects approved by voters in 1996 and 2008. That adds up to about $30 on a vehicle worth $10,000.

Under Sound Transit 3, the transit agency’s collection would increase by 0.8 percent, to a total of 1.1 percent of value. That higher total would be collected through 2028, when the 0.3 percent tax is set to expire.

The 0.8 percent fee would continue indefinitely, according to Sound Transit spokesman Geoff Patrick.

A person owning the same $10,000 car now would pay $110 to Sound Transit annually as part of his or her license-plate renewal through 2028 and $80 thereafter.

Sales tax

Sound Transit currently collects 0.9 percent on each taxable sale in Pierce, King and Snohomish counties. That works out to 90 cents on a $100 purchase.

Under Sound Transit 3, the agency would collect another 0.5 percent, raising the agency’s total collection to 1.4 percent on each taxable sale. That works out to $1.40 on a $100 purchase, an increase of 55 percent.

The increase also would push the overall sales tax rate in many communities, including Tacoma, above 10 percent.

Property tax

Levying a property tax is new ground for Sound Transit.

The agency thus far has raised local money for capital costs and operations through the car-tab fee, sales taxes and a tax on car rentals.

The Legislature recently gave the agency authority to begin collecting property taxes as well, a decision not supported by all.

In a Nov. 18 letter to the Sound Transit board, the mayors of DuPont, Lakewood and Steilacoom expressed concerns about the agency’s use of property taxes to finance its projects and operations.

“Local governments, school districts, fire districts, library districts and other local taxing authorities rely heavily on these local property taxes,” mayors Michael Grayum, Don Anderson and Ron Lucas wrote.

“Sound Transit should thoroughly consider the impact that use of its property tax authority could have on our local funding capacity and that of our junior taxing districts.”

The Sound Transit 3 current proposal calls for a property tax of up to 25 cents per $1,000 of valuation. That would be $66.25 annually for a house valued at the current Pierce County median home price of $265,000.

Other funds

Sound Transit is counting on federal grants to pick up 11 percent of capital investments and long-term debt in the form of bonds to cover between 20 and 50 percent.

Fares to ride the agency’s buses and trains are projected to cover about 40 percent of light rail operations and 20 percent of bus operations if the system is built out.

Adam Lynn: 253-597-8644, @TNTAdam