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The second span across the Tacoma Narrows, completed in 2007, works much like mega-projects of the past: The state charges a flat toll to drivers that goes to cover the cost of building the bridge, and the toll is expected to disappear when the money borrowed for the project is paid back. The state promises lenders it’s good for the money, even if tolls don’t pan out.
“These are the rules that we’ve had for 100 years. This is how we built the 520 bridge, the I-90 bridge, the Hood Canal bridge. These are the same rules they’re following right now with the Tacoma Narrows bridge,” Eyman said. “Now they’re suddenly saying, ‘No, we’re not going to use that approach, we’re going to use this brand new way of doing things which is just so much better.’”
What might this brave new world of tolling bring? A new way of borrowing money. A longer life for tolls. A new conception of tolls as a network, in which Interstate 90 drivers would help pay for the new state Route 520 bridge – and perhaps one day, drivers on Interstate 5 in Fife or South King County would help pay for expansions of state Routes 167 or 509.
Eyman’s latest measure would put roadblocks in front of every one of those changes.
And one more: Washington is moving toward joining states including California, Colorado, Texas, Illinois, New Jersey, Maryland and Minnesota in charging higher tolls at busy traffic times and lower or no tolls at other times. Washington drivers already know the concept if they opt to pay for a speedier trip on SR 167, and they can expect to see it a lot more – unless voters approve Initiative 1125 on Nov. 8.
Microsoft, other businesses, environmentalists, unions and several other major interests with a political voice in the state are trying to make sure that doesn’t happen.
They say Eyman is standing in the way of progress. One business group compares it to holding on to the horse and buggy.
“I want to know if he has a rotary dial on his cellphone,” said former Transportation Secretary Doug MacDonald. “We’re in a time when we can do things smarter.”
Opponents have raised more than $1.2 million, more than half of it from Microsoft. Supporters also lean heavily on a single donor: Bellevue developer Kemper Freeman Jr., who has waged a court fight against light rail on the I-90 bridge. I-1125 would scuttle the voter-approved rail line.
The rail provision is one of several parts of the initiative that could limit spending on mass transit as part of megaprojects – reflecting what MacDonald calls a misguided “‘just-pave-it’ mantra” and what Eyman says is merely what toll- and taxpayers expect.
FUNDING GAP
The measure would be no boon for paved roads, opponents argue.
The scenario that worries them, especially business interests, is the one painted by State Treasurer Jim McIntire.
The Democrat says I-1125 would blow a $250 million hole in the financial plan for the 520 bridge and cause similar problems for other potential future toll projects – the Alaskan Way Viaduct, the Columbia River crossing, and maybe the SR 167 and 509 projects.
That’s because McIntire expects the state to use a new financing method to pay for those projects.
Past bonds have been backed by tolls, gas tax revenue, and the state’s credit – including the first $500 million being issued this month for the 520 bridge.
But gas taxes are just about tapped out, McIntire says, mostly dedicated to other projects.
So the state is turning to a more expensive way of borrowing – selling bonds backed solely by toll revenue. The state expects to raise another $250 million for the 520 project by issuing toll-only bonds in late 2013 or 2014.
The interest rate is expected to top 7 percent, three percentage points higher than on this month’s bond sale.
I-1125 wouldn’t ban that kind of borrowing outright, but it would put a crimp in it by handing toll-setting authority to the Legislature, which no other state does. Tolls are set now by the Transportation Commission, the seven-member board appointed by the governor and subject to confirmation by the state Senate.
“The Legislature has a history of punting to other entities, and that’s wrong,” said Republican Sen. Pam Roach of Auburn, an advocate of lawmakers setting toll rates. “The constitution has given us the responsibility and, therefore, the accountability for major policies.”
But McIntire said bondholders would be worried about the risk of lending to Washington if tolls were seen as subject to political whims.
That would drive up the cost of borrowing by double-digits, he says, making it prohibitively expensive. Washington wouldn’t be able to pay for the projects without raising gas taxes.
What both sides tend to ignore in the debate is that state lawmakers could quickly step in and delegate their power back to the commission – just as they did this year.
After voters approved Eyman’s 2010 measure that included a similar provision, Attorney General Rob McKenna’s office said lawmakers could re-delegate their authority without changing the initiative. They did so without much dissent, and by huge majorities, though they presumably needed just a simple majority.
Eyman, though, predicted lawmakers wouldn’t dare go against voters if they approve I-1125 after a public debate about who should set tolls, something that didn’t happen in last year’s debate that mostly revolved around taxes.
But I-1125 sets yet another hurdle, McIntire said: It prohibits tolling the I-90 bridge as a way to help pay for the currently unfunded portion of the 520 bridge project. McIntire said that would leave a flaw in his financing plan for the first two legs of the project.
“If I don’t have a full financing plan in place for the whole bridge,” McIntire said, “I’m not going to be able to sell investors toll-revenue bonds for the eastern and central portion of the bridge. You wouldn’t buy a bond that’s guaranteed solely by the tolls on two-thirds of a bridge, would you?”
TOLL LIMITATIONS
There are other ways opponents say I-1125 would stymie road building.
Take the rules about how long tolls persist. I-1125 would end them after bonds are paid off. A 2008 law leaves that open-ended.
MacDonald said the needs of a road or bridge don’t end when the debt is paid off.
If a toll, even a low one, had been kept on the 1950 Narrows Bridge, he said, it could have saved up enough over half a century to pay for the second span.
Eyman said building up such a fund would just invite lawmakers to raid it. It would be like “leaving a wallet in a bad neighborhood,” he said.
Or take the tolls that change by time of day or traffic. It’s called variable pricing.
I-1125 would ban the practice for future rounds of toll setting but isn’t retroactive. Variable rates would continue on the state Route 167 car-pool lanes that drivers can pay to enter between Auburn and Renton. And they would start as scheduled on the 520 bridge – in December, barring further delays. Drivers with Good to Go accounts crossing Lake Washington will pay up to $3.50 at rush hour, but will cross for free at night.
The changing tolls are intended to manage traffic. Everyone’s drives will go faster if the higher prices encourage drivers to avoid the busiest times of day, transportation officials say.
Eyman argues that many working-class people can’t choose when to work, so they pay disproportionately. And it’s the principle, he said – the point of a toll is to pay for the project, not to change driving habits.
But transportation officials say they will raise more money through variable tolls.
One study predicted a drop in revenue of up to 11 percent, but more analysis is needed, the governor’s budget office says.
To make up for the decrease, Toll Division director Craig Stone said, the average toll would go up.
It’s one thing to have a flat toll on a bridge over the Narrows that many people are forced to cross, said Steve Mullin, president of the Washington Roundtable business group. It’s another thing on Lake Washington, where many people will simply refuse to pay an “unreasonably high toll” during slow traffic times.
“If you’re in a more complex urban environment like Seattle where you have a variety of alternate routes,” Mullin said, “… you’re going to take an alternate route.”
Jordan Schrader: 360-786-1826
jordan.schrader@thenewstribune.com
blog.thenewstribune.com/politics
Twitter: @Jordan_Schrader
