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Constantine proposes fee hikes, new sales tax to rescue Metro riders

Waiting for a Metro 150, which connects Downtown Seattle, Kent and Auburn Credit: Oran Viriyincy/Flickr

To stave off bus service cuts and raise money for roads, King County officials want voters to approve a local ballot initiative this spring. The initiative would create a “transportation benefit district” funded by increased vehicle license fees and a new sales tax.

Under the proposed ballot measure, announced by King County Executive Dow Constantine on Tuesday, vehicle license fees would rise from $20 to $60 and sales tax within the county would inch upwards by one-tenth of of 1 percent, meaning 1 cent per $10 dollars spent. The county estimates that each year the fees would generate $80 million and the tax would create another $50 million. About $80 million would go to King County Metro Transit. The remaining $50 million would pay for roads and other transportation projects. If the County Council approves, a vote on the ballot measure would take place during a special election held on April 22.

Four County Council members — Council Chair Larry Phillips, Jane Hague, Joe McDermott and Rod Dembowski — joined Constantine at a press conference on Tuesday to voice support for the initiative.

The governing board of the countywide transportation benefit district would consist of King County Council members. Under state law transportation benefit districts — and other special-purpose entities like port and fire districts — are considered “quasi-municipal corporations.” Transportation districts can implement vehicle registration fees up to $100 per year and sales taxes up to two-tenths of 1 percent with voter approval. The districts can also issue general obligation bonds.

Without a new source of funding, Metro Transit will face a $75 million budget gap later this year. As a result of the shortfall, the agency has said it will have to cut 74 bus routes and reduce or change service on 107 others. Constantine said on Tuesday that he would prefer using a motor vehicle excise tax rather than the transportation district to help fund Metro. But King County does not have the ability to levy the MVET, which is based on a vehicle's value, without the state Legislature’s authorization. Lawmakers in Olympia have been unable to agree on any legislation that might solve Metro Transit’s budget woes.

“We are out of time for a statewide bill that includes a local transportation solution,” Constantine said. “For five years now we’ve lived under the threat of drastic cuts, bus cuts, at a time when we’ve needed more service, not less.”

Constantine is also proposing that Metro Transit adopt a scheduled 25-cent across the board fare increase in March 2015. At that time, the most expensive fare would rise from $3.00 to $3.25. The fare hike will create an estimated $6.6 million in additional annual revenue, which was already factored into the agency’s financial planning.

Riders with incomes that are equal to or less than two times the federal poverty level would qualify for a new reduced $1.50 fare. The income threshold for the fare would be $22,980 for a single person. Details of determining eligibility have to be worked out. All reduced fare payments would be done through an ORCA card rather than cash.

For the last two years, Metro Transit has avoided service cuts by relying on revenue from a $20-per-vehicle “congestion reduction charge.” Language in the state law authorizing the charge will cause it to expire in June. The transit agency has made $800 million in cost cuts and savings during the last five years and has already increased fares four times since 2008. Constantine said that sales tax declines during the Great Recession caused Metro’s money troubles. Roughly 54 percent of the agency’s operating budget comes from sales tax.

Revenue generated by the transportation district will be divided up within the county based on population. Seattle is slated to receive $16.5 million annually for transportation projects.

“It’s an agreement we can all live with, the cities and the county,” said the City Council’s Transportation Committee chair Tom Rasmussen. “We’re only getting six or seven million now a year from the current vehicle license fee.”

In remarks after the press conference, Constantine said that if lawmakers in Olympia pass legislation that could provide Metro funding before the ballot measure goes up for a vote, then he would be willing to shelve the idea for the transportation district.

Asked what would happen if the Legislature passes a bill after voters have already approved the transportation district plan he said: “I’d be happy to work with the legislators to find a way to replace the taxes the voters approve with a different set of taxes, that might be by vote of the people, that might be by councilmanic action.”

In Olympia on Tuesday, state Senate majority leader Rodney Tom, who represents the 48th District, which includes Bellevue, knocked Constantine's proposal, saying it gives legislators from King County less incentive to hammer out a statewide transportation deal.

Constantine said the county has passed the point where it could wait for a legislative comprimise.

“We want them to keep working on this,” he said, referring to the Legislature. “The problem is we’re out of time, we’re out of money.”

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