They've been saying this since it hit the news at least a couple of weeks ago. Don't they bear some responsibility for choosing a crappy 3rd party service? Maybe the lowest bidder?
I ran into the same thing with the Kitsap County (also WA) passenger only ferry service ticketing system. They require a ton of personal information but they're using a 3rd party provider to process payments and reservations. Said 3rd party provider has(had?) a very open "privacy" policy (which should be called the "information sharing policy") which basically allowed them to share all the information with whoever they want for any reason. I contacted Kitsap Transit and they just didn't care. They don't see any problem, saying "everybody does that." When I pushed back, they forwarded me an email from the 3rd party where someone there claimed "we don't actually share it." and that was as far as I got.
It's such a shame that our own government can't treat personal information with respect.