Sound Transit succumbs to ‘cost of doing business’

Sound Transit got all it asked for and more than it wanted from state lawmakers this year.

It leaders sought and obtained permission to put their next phase of expansion known as ST3 and the buffet of taxes to pay for it in front of voters.

This is the $15 billion undertaking Sound Transit says will enable it to make good on its promise to provide light rail service to Everett and Tacoma.

Voters in Snohomish, King and Pierce counties could decide as early as November 2016 whether to fund this added service through a combination of higher taxes on property, retail sales and motor vehicles.

But if it’s approved, Sound Transit will be putting millions of those new tax dollars into building affordable housing and funding schools in those counties before any light rail trains reach Lynnwood, let alone Everett.

That’s what state lawmakers demanded of Sound Transit in exchange for fulfilling the regional transit authority’s request.

If that sounds like a negotiation, it really wasn’t. Lawmakers didn’t consider any counteroffers. It was take-it-or-leave-it so Sound Transit took it.

Now, here’s what must happen if voters approve the ST3 plan and taxing authority:

Sound Transit must put $20 million into a revolving loan fund to finance affordable housing projects. Sound Transit, which will administer the fund and cut the loan checks, must ante up $4 million a year for five consecutive years. It must start depositing that money within three years of voter approval.

Sound Transit must plug a $518 million hole in the state’s general fund with payments starting in 2017 and lasting through at least 2031.

Those dollars will go into a new Puget Sound taxpayer accountability account. They will be doled out to Snohomish, King and Pierce counties to distribute “for educational services to improve educational outcomes” in early learning, elementary and secondary schools, and colleges.

Counties, which aren’t in the education business, must figure out where to send the money.

Right now there are no rules on where the money will go so it could go to public, private or parochial schools or colleges. The only condition is the “educational services” occur within the Sound Transit boundaries.

The two directives emerged in the heat of negotiations among lawmakers on a statewide transportation package and resolved a seemingly irreclaimable dispute on what to do with sales tax the state pays on road projects.

That money now goes into the general fund to pay for schools, among other things. The House Democrats wanted to keep it going there but Senate Republicans sought to divert it to transportation projects.

The majority parties in the two chambers found a compromise — Sound Transit.

As part of the transportation package Gov. Jay Inslee signed into law earlier this month, the state will begin diverting sales tax paid on new road projects in 2019. This will siphon an estimated $518 million from the general fund through 2013.

Sound Transit must backfill those dollars. To do that, Sound Transit will now start paying sales tax on labor costs associated with its expansion projects. That will make those projects a little more expensive but it’s the political price the agency leaders felt they had to pay.

“We didn’t ask for that,” said Everett City Councilman Paul Roberts who is the vice chairman of the Sound Transit board of directors.

“It was the cost of doing business. This gives us the chance to build the system voters approved and expect,” Roberts said.

Political reporter Jerry Cornfield’s blog, The Petri Dish, is at www.heraldnet.com. Contact him at 360-352-8623; jcornfield@heraldnet.com and on Twitter at @dospueblos