NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Thursday, August 11th, 2011

OFM: Tim Eyman’s I-1125 would imperil key transportation projects, raise borrowing costs

A few months ago, when we took an initial look at the details of the scheme Tim Eyman said he was going to attempt to force a vote on in 2011, we concluded that it would interfere with vital transportation projects around Washington, including many under or nearing construction, and many more on the drawing board.

Yesterday, the Office of Financial Management released its own fiscal impact statement of the initiative, and their analysis confirms what we’ve been saying for some time: I-1125 would imperil badly needed infrastructure upgrades intended to improve safety and relieve congestion.

Affected facilities mentioned in the impact statement include the Evergreen Point floating bridge (a key span of SR 520, which is being replaced), the SR 167 HOT lanes, and the proposed Interstate 405 HOT lanes. Additionally, other facilities (like the new Columbia River Crossing) may be affected if the Legislature decides to toll them as it is eventually expected to.

The initiative is not expected to have any fiscal impact on the already-completed Tacoma Narrows Bridge project, which is being paid off.

The heart of the analysis (PDF) focuses on SR 520, because projects to improve that facility would be the most threatened in the short term.

Threat number one: I-1125’s restrictions could jeopardize future use of variable tolling on SR 520 if the toll needs to be raised in the future.

Current law requires the use of variable tolling. If a toll rate increase is necessary, a new toll rate analysis and supplemental environmental review will be required to implement a uniform and consistent toll rate. Assuming that these analyses can be conducted concurrently within project schedules, the cost is estimated at up to $3.2 million. Prior analysis indicates that a fixed toll rate equivalent to the weighted average of variable tolls could reduce revenue by up to 11 percent due to different traffic patterns.

In other words, if tolls on SR 520 needed to be raised at some point in the future, they would have to be uniform throughout the day (not variable). The elimination of variable tolling would cause some bridge users to make fewer trips over the bridge, or make no trips at all, precipitating a decline in toll revenue.

Threat number two: The state might have to repay grants to the federal government, including money that has already been spent.

Federal Urban Partnership Agreement (UPA) grants were awarded to the Washington State Department of Transportation, King County and King County Ferry District conditioned on implementing variable tolling on the existing State Route 520 bridge. If a toll rate increase is necessary and variable tolling is prohibited, the state, King County and King County Ferry District would lose authority to spend remaining grant funds and could be required to repay the entire grant amount.

Threat number three: I-1125 would make it more difficult to sell bonds secured by toll revenue to finance the new Evergreen Point Floating Bridge.

Current law authorizes the issuance of $1.95 billion in bonds secured solely by toll revenue or secured by both toll and gas tax revenue. The State Treasurer states that requiring tolls to be set and adjusted by the Legislature rather than by an independent toll-setting body would make the cost of bonds secured solely by toll revenue prohibitively expensive and would be unprecedented nationally. Because investors in toll revenue bonds see the independence of toll-setting bodies as a critical credit characteristic, no other toll revenue bond issuer in the nation sets tolls subject to legislative approval (Public Resource Advisory Group analysis, Feb. 8, 2011). Therefore, the State Treasurer states that bonds secured solely by toll revenue would be eliminated as a financing tool for the bridge. Gas tax or other revenues would be necessary to issue bonds, reducing overall capacity to finance transportation projects, which may impact future expenditures.

If tolling goes out the window as a financing option for SR 520, that means people who live further away from the SR 520 corridor (and don’t make use of it on a regular basis) would have to pay more towards the cost of the new floating bridge. Not moving ahead with the new bridge simply isn’t an option. We need the new Evergreen Point Floating Bridge. The old one is vulnerable to earthquakes and windstorms; it’s got to be replaced.

The Legislature authorized tolling on SR 520 because extensive research and outreach conducted by the Department of Transportation has shown that people prefer paying tolls to other methods of financing a new bridge.

Tim Eyman and his wealthy benefactor Kemper Freeman Jr. may think they understand transportation engineering better than the people who were actually professionally trained as highway engineers, but in reality, they don’t know what they’re doing. Tim Eyman has no familiarity or experience with writing budgets, delivering services to the public, or planning projects.

That’s why it is so easy for Eyman to dismiss the concerns that inevitably get raised about the harm his initiatives would cause. Eyman doesn’t have to deal with the ramifications of his initiatives if they pass. When he and the right wing fool voters into making a mess, they’re not the ones who have to clean it up.

This autumn, join NPI and thousands of other concerned individuals and organizations in Washington in voting NO on Tim Eyman’s I-1125.

Let’s keep Washington rolling and keep vital transportation projects like the new Evergreen Point Floating Bridge on track.

Adjacent posts

One Ping

  1. […] OFM: Tim Eyman’s I-1125 would imperil key transportation projects, raise borrowing costs […]

    Ping from Morning Rundown for August 12th, 2011 :: August 12th, 2011 at 9:33 AM