Car tabs too high? Here’s why

Last year voters in the Puget Sound Regional Transit Authority (aka. Sound Transit) approved a 25-year $54 billion transit package to expand light rail, commuter rail and bus rapid transit throughout King, Pierce and Snohomish counties.

While the package passed overall, 56 percent of Pierce County voters soundly rejected the plan with many citing significant tax increases and that many of the projects go to Seattle and King County.

Now the cost of the measure is starting to hit home with more people — even those who originally supported the pan — as the new bills for yearly car tabs began going out in March.

As has been well covered in the media, many people have been taken aback by the steep price increase in the motor vehicle excise tax. Under ST3 the “MVET” rate increased by 0.8 to 1.1 percent per $10,000 of car value. That means $110 for every $10,000 of assessed car value.

Since the cost is tied to the value of a vehicle, many have been upset to learn that Sound Transit uses an outdated method of calculating car values much higher than their actual worth.

Anyone who has purchased a new or used car knows the instant depreciation as soon as it is driven off the lot and that cars are often purchased for a price not equal to the list price.

Sound Transit’s method was based on a decades-old formula previously used by the state that has since been done away with. The plan bases car value off of the manufacturer’s suggested retail price and then a reduced percentage each year as it ages. However, that reduction does not reflect the real-world value charging at 100% the first year, 95% the second, 89% the 3rd year and so on. In 2005, the state changed to a model that steps down from 100% to 81% the second year, 67% the third year and so on — a much more realistic look at car depreciation.

Voters have made themselves heard on this issue in the Legislature and both the Senate and House reviewed bipartisan options to address the concerns of drivers who feel misled by their own regional transit authority. This includes a proposal to assess car values based on widely accepted methods like the Kelley Blue Book.

Sound Transit responded that changing to a different valuation method could lead to a loss of $6 billion in revenues to build projects. However, from the perspective of voters that means Sound Transit is collecting $6 billion more money than taxpayers feel they should.

We’ll continue working on this issue as more people will continue getting new car tab bills during the rest of the year.

Sound Transit Car Tab Issues in the News