Monorail bill would tax new-car buyers in Seattle

For the past two years, new-car buyers in Seattle have enjoyed a break from the monorail tax.

That could change under a bill in the state Legislature.

Rep. Ed Murray, D-Seattle, has introduced House Bill 2248 to extend the Seattle Monorail Project's 1.4 percent motor-vehicle excise tax (MVET) to new cars. Currently, car owners don't have to pay the tax until their vehicle is 1 year old.

The additional tax source might solve the monorail's current cash squeeze, removing any doubts that the Seattle Monorail Project (SMP) can afford the system approved by voters in 2002.

The tax would add about $191 to the cost of a new Ford Focus, $292 to a Toyota Prius, $411 to a BMW 325i, or $744 to a Cadillac Escalade. The tax, which began in June 2003, applies only to residents within the city limits.

The Washington State Auto Dealers say new-car buyers already pay their share in sales taxes, as well as a regional Sound Transit tax.

"It's a simple message. We dealers don't think it's fair to add another tax burden," said Vicki Fabre, the dealer group's executive vice president, when informed of the bill yesterday.

Seattle Monorail Project spokeswoman Natasha Jones said the agency played no role in the legislation, and has taken no position. SMP board member Cleve Stockmeyer was unaware of it and said he's neutral.

"That's nice if people want to help us, but we're not asking for it," he said. Stockmeyer said he would oppose the bill if it causes time-consuming debates, or even a public revote.

Henry Aronson, who led a 2002 anti-monorail campaign, said he wouldn't object to putting a monorail tax on new cars. He called the existing scheme "regressive," meaning it hits low- to moderate-income drivers harder than someone who can afford to buy a new car frequently.

If lawmakers pass the bill, they should also change the state's unpopular depreciation schedule, which is used to determine a car's value for taxing purposes, he said. The table frequently overstates the value of most used automobiles, generating tax bills that far exceed 1.4 percent of the true-market or Kelley Blue Book value. Aronson, an attorney, is assisting in a class-action lawsuit by Seattle car owners against the monorail tax.

Senate Transportation Committee chairwoman Mary Margaret Haugen, D-Camano Island, has already urged an overhaul of the tax table by next year, before other agencies seek car-tab taxes throughout the state.

Monorail leaders have pledged, since late in the 2002 campaign, that they will not seek to extend their tax to new vehicles.

On Sept. 8, SMP construction director Tom Horkan affirmed at a monorail board meeting that it is possible to build the line with existing tax rates and debt limits.

Still, the SMP's tax income is running at least 20 percent short of original projections. The agency is depending on future growth to close the gap. And monorail board members were told the project's sole construction bid would need to be reduced roughly $200 million to be affordable, sources confirmed recently. Delays or cutbacks in trains, design or stations are possible unless the agency devises a lucrative financing strategy.

Stockmeyer said the board's job is to sign a contract "that gives us a quality system as promised" using current taxes, and he believes it can. "We'll either build it, or we won't. It's not our job to build the monorail at all costs."

Mike Lindblom: 206-515-5631 or mlindblom@seattletimes.com