Washtenaw County voters could be asked to pay new tax for regional transit authority

Updated at 6:01 p.m.: This story has been updated with additional information showing a regional vehicle registration tax could raise $75 million annually to fund the RTA.

Ann Arbor officials pledge to fight to get Washtenaw County removed from the new Southeast Michigan Regional Transit Authority that Gov. Rick Snyder is ready to sign into law.

But if the city's pleas for removal fall on deaf ears in Lansing, local residents — along with residents in Wayne, Oakland and Macomb counties — could be asked to pay into the RTA.

After passing enabling legislation to create the RTA on Thursday, the Republican-controlled state House also gave its blessing to Senate Bill 911, which gives the four-county authority the power to impose higher vehicle registration fees in the region to pay for regional transit services.

A vote of the people throughout the four-county region is required for any new regional tax to take effect, whether that's a property millage or new vehicle registration fees — both of which are possible under the package of bills likely headed to Snyder's desk soon.

If a tax of any kind is approved by a majority of voters region-wide, it still would be imposed on individual communities that vote against it, and there is no local opt-out provision.

More simply put, if Washtenaw County voters say they don't want any part in funding an RTA, but the tax still wins approval throughout the region, Washtenaw County stays in and pays along with everyone else.

"Once we're put into this, it's extremely difficult to get out," said Ann Arbor Mayor John Hieftje, who doesn't want to see the Ann Arbor Transportation Authority roped into the RTA for a number of reasons, including concerns about losing control of funding and political implications.

State Rep. Rick Olson, R-York Township, said getting the 56 votes needed for SB 911 was not easy with the Democrats missing in action on Thursday.

"Nonetheless, it was an essential piece of the RTA package, and ultimately we convinced enough people to support the enabling legislation, knowing full well that for any vehicle registration fee to be imposed in the region would require a vote of the people," he said.

Olson said much work among the many regional players will be necessary to even develop a plan that will be considered by the people of the region.

"The legislation does not create the transit system, merely permits it," he said. "If history is any guide, this will be an uphill battle at best."

Las Vegas probably would put the odds against success, Olson said, but the approved legislation at least makes it possible for an RTA to help the region become more competitive in creating an environment that will attract young professionals and entrepreneurs.

SB 911 enables the RTA to levy a new vehicle registration fee of no more than $1.20 per $1,000 of vehicle value, which is estimated to be about $25 a year on the average vehicle.

Washtenaw County Board Chairman Conan Smith, D-Ann Arbor, has been closely involved in RTA talks with regional officials this past year. He said the registration fee is likely going to be what funds the RTA, at least initially, and he considers that an innovative approach.

Smith is at odds with other local officials on the RTA issue. The mayor plans to call to order a special meeting of the Ann Arbor City Council on Monday to vote on a resolution opposing Washtenaw County's inclusion in the RTA. Hieftje said he's hopeful the governor and state lawmakers will respond in early 2013 and approve measures to remove Washtenaw County.

Initial plans spelled out in the RTA legislation call for high-speed buses to run in dedicated lanes on four regional routes: The Woodward corridor from Detroit to Pontiac, the Gratiot corridor from Detroit to Mt. Clemens, a northern cross-county line from Pontiac to Mt. Clemens and a western cross-county line from Detroit to Ann Arbor's downtown Blake Transit Center.

State Rep. Jeff Irwin, D-Ann Arbor, fought passage of the RTA legislation because he doesn't think it provides enough protections for the AATA's funding streams, nor does it allow for regional rail unless unanimously approved by the RTA's board, which many believe is an insurmountable hurdle.

But after passage of the enabling legislation on Thursday, Irwin said it only made sense to also pass the companion legislation to give the RTA a fighting chance of success.

"The potential new tax on car registrations at least gives local governments and citizens an additional option to pay for transit service," Irwin said. "Without it, the RTA would be doomed to failure."

One companion bill still outstanding would allow the RTA to ignore local zoning.

The state estimates it will cost $1.3 million to implement the provisions of SB 911, including a one-time cost of programming and staffing. In addition, there would be an annual cost estimated at $100,000 for the Department of State to distribute the revenue directly to the RTA.

Based on fiscal year 2009-10 data, the average cost of a passenger vehicle registration is $103, which equates to an average vehicle value of $21,000. In the four counties, there were 3 million vehicle registrations in 2009-10. If an additional fee of $1.20 per $1,000 of vehicle value is added, that would result in an average cost increase of $25 per vehicle.

Based on the 3 million transactions in the year studied, that could equate to an estimated $75 million in annual registration fee revenues that could go to the RTA.

Smith said he believes the added vehicle registration fees could generate as much as $7 million to $9 million from Washtenaw County.

"This isn't immediate," he added. "I don't think the bills were given immediate effect, so they don't even take effect until March."

Smith said there's a long process that follows after that, putting it into possibly September before the RTA even has a director in place. Then the work to adopt a regional plan begins.

"They've got a lot of work to do," he said. "So the likelihood that this is going to show up on the ballot in 2013 is slim. I would guess if they work fast, it will be in 2014."

Smith said he has high hopes, though.

"I think people are chomping at the bit to do good regional transit work," he said. "And the way this bill is structured, the board ends up being apolitical folks whose first priority is providing transit service.

"I actually have very high hopes for this board and expectations that we'll see professional management of the region's transit."

Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's email newsletters.