In one of the first sentences in the Governor’s policy brief on transportation revenue is the primary reason Olympia stays in a perpetual funding crisis:
Because no maintenance or preservation funds were provided for new lane miles created through these projects, deterioration will set in.
For every administration and for every legislator, the easiest way to pass a package that looks good to their constituents is to partially fund as many new projects as possible, and make them appear as cheap as possible. For a given dollar, it’s more politically viable to spend it on a new project – and be able to say to constituents that their needs are being met – than to spend it just to maintain an old project.
This is simply a reality of psychology, not meant to be an indictment of anyone, but it’s a real problem for legislators who only have so much power or political capital. King Street Station is a great example. The Amtrak Cascades station with the most use in the state is in disrepair, partially restored, and partially funded, after years of work. In the meantime, a barely used Stanwood station has been constructed from scratch – in the district of the chair of Senate Transportation.
Today, many of our highways are in the same boat. In 2003 and 2005, Olympia passed gas tax increases that finished some projects, but largely started new ones. A list of “Unfinished mega projects” in the brief speaks to these partial packages – full of new highway lanes, they were crafted to win public support through big-splash projects on I-405, I-90 and SR-99, largely ignoring the state’s maintenance needs – projects that aren’t exciting to voters.
Now, at the top of the priority list is a sudden need to do maintenance. We have roads and bridges crumbling! Only at the end of a road’s life, when it can be portrayed as a danger, can public opinion turn to new revenue to maintain it. But right below is a list of new highway expansions, with words like “economic development improvements”, “improved mobility” and “congestion relief”. But we know new lanes don’t improve congestion. More roads equal more traffic.
So the state’s task force has proposed “guiding principles” for a package. The middle of the three options (clearly the target, as it’s the only one anyone’s talked about), is $21 billion. Of that, after all that talk about how our maintenance needs are going through the roof, maintenance adds up to less than $6 billion – with $11 billion in “improvements in economic corridors”, also known as wider highways. $2 billion – less than a tenth! – is offered for transit, but given the state’s history of ‘transit funding’, that sounds a lot like vanpools.
Our economic centers don’t have room for wider highways. The task force is trying to do two things – frame low density, low productivity places as “economic corridors” (and say they’d be more productive with bigger highways!), and totally ignore the strong voter message they received when we shot down Roads and Transit in 2007.
If the state wants a transportation package to pass, they’ll have to work with us, not propose doing more of the same. We’re in a maintenance funding hole because of this kind of planning, and we need to get out.
How about an initiative that calls for a moratorium on any “new” road projects until all current projects are completed and deferred maintenance is achieved. And 2) removes the term “Highway purpose” and substitutes “transportation purpose” in the Gas Tax provision.
Allow me to quibble with the caption on your photo No plans to maintain this…. If the picture is seen as a shot of 40+ vehicles rolling in 8 or 9 general purpose lanes with only 4 cars in the single HOV lane, then I would argue that the legislature is planning to maintain exactly what the picture captures. But I get your point.
Let’s remember that members of the state legislature will simply say that capital budgets and maintenance/operations budgets are funded differently. Money for capital projects is easier to appropriate than raising taxes to fund maintenance. A large part of road building money has come from federal sources, but the maintenance budget is paid for by local sources. There’s nothing inherently wrong with that structure, except that the local governments have dropped their end of the bargain.
Good commentary, Ben. As Charles notes, one big challenge is that most transportation funding comes from the gas tax, and that revenue is restricted to highway uses. There are few revenue sources for transit and other non-highway transportation improvements, and those sources have to be increased dramatically to significantly increase non-highway revenue – a difficult political challenge. Or, again as Charles notes, the law can be changed to allow gas tax revenues to be spent on non-highway transportation facilities, but that seems politically impossible.
Last point is that stakeholder in-fighting killed the most recent modest transportation investment legislative proposal. If stakeholders can’t reach early agreement in 2012, nothing will pass and no modes will see investment.
There are few revenue sources for transit and other non-highway transportation improvements
What about ST2? The new local regressive tax revenue just to service those bonds will be about $100 billion over the next 45 years. We all wish it were double that of course, but that’s a good-sized revenue source from every angle!
Got a link for that, Whelp? I didn’t think so . . ..
You’re off by a factor of 5.
I didn’t write that first comment. Never thought someone would pose as me.
Zed, do you have a link for your “off by a factor of 5” comment? My understanding is the tax costs of the bond security terms still have not been estimated.
http://future.soundtransit.org/documents/091008_107B_response.pdf
http://www.soundtransit.org/Documents/pdf/about/financial/2011/2011Financial_Plan.pdf
Do you really think they’re going to pay $93 billion in interest on ~$7 billion of debt?
Zed, your first link is to a 2008 document that says Sound Transit’s “forecasts project the full bond payoff to occur by 2036”. That was before the revised revenue forecasts came out in 2010. Now, with 25% less tax revenue, the bonds will be sold later and there will be no reserves that could pay off the debt by the mid-2030’s. That document is completely outdated. You can see how outdated it is by looking at what the second document you linked to says, on page 1:
“Due to the recession, Agency revenues are estimated to be $3.9 billion, or 25 percent, below the 15-year financial forecast included in the 2008 voter-approved plan. As a result, it is no longer possible to complete all ST2 programs by 2023, as was originally planned.”
That 2011 document (the second one you linked to) does not contain any estimate of the tax costs to secure all the bonds needed for ST2.
I’m afraid the $100 billion tax cost estimate of the security pledges for ST’s bonds may be correct. That’s mainly due to how the revenue shortfall means there will not be the reserves to pay off the earlier bonds by the mid-2030’s, there will be more bonds sold overall, and the bond sales will occur later (in the mid-2020’s). Nothing you’ve linked to suggests otherwise.
You’re going to believe what you want regardless of reality.
Their bonding capacity and the cost of the projects remains the same regardless of how much tax revenue is coming in. I don’t know why you believe that selling bonds a few years later than anticipated would result in an astronomical increase in financing costs. You do understand how interest works, don’t you?
Zed, you asserted that the following was “off by a factor of 5”:
The new local regressive tax revenue just to service those bonds will be about $100 billion over the next 45 years.
Neither of the two links you threw up support your claim, indeed they suggest that the bonds won’t be paid off until the early 2050’s. Given that the bond sale contracts require Sound Transit to collect the sales tax at or near the maximum rate while any of those bonds are outstanding, the lowered revenue forecasts and the delayed bond sales will have MASSIVE adverse tax costs to the public. It’s just like the abusive freakshow the monorail authority’s financing plan became due to the tax revenue being substantially less than anticipated.
Admit it . . . the tax costs to the public of securing those bonds could well exceed $100 billion. In fact, that’s a pretty solid estimate, wouldn’t you say?
No. Given current low interest rates (you clearly *don’t* understand interest rates, Gojirra), the interest paid on the $7 billion in debt is gonna be much, much lower than that. Maybe $30 billion in a worst-case scenario.
ST is having no problem selling 30 years bonds at ~5%. At that rate the total interest paid is about equal to the amount financed. Even at a moderate say 3% inflation rate the cost of money is pretty small. I’m not sure where the $7 billion figure came from. That sounds like the total construction costs. ST only bonds half of the capital cost paying the rest from cash on hand. That’s why construction is delayed; which actually saves money.
“There are few revenue sources for transit”
Dude . . . the bus and train services providers around here (Metro, SDOT, ST, CT, and PT) impose about $1.6 billion in general taxes every year. That’s sales tax, property tax, and car tab tax. That’s a heavy taxing schedule from multiple sources. What don’t you get about that?????
Dude, three revenue sources is a “few”. And Larry wasn’t talking about Community Transit OR Pierce Transit.
The context of the post is State Government funding for transit, which is basically nil in Washington State. The majority of states in the US provide direct funding for local transit agencies, particularly in states that have >50% urban population.
Now 51% of Washington State lives in the Seattle metro area (King, Pierce, Snohomish), not even counting the metro populations in Clark and Spokane Counties. Its time for Washington State to move beyond its frontier stage and begin supporting urban commute corridors that affect a majority of the state’s population. Since the 1990s, most growth in commute volumes has been on transit. But due to a few traditionalist legislative committee heads and executive officials, state policy hasn’t caught up to the present day. Eventually it will, but I fear the state will waste billions more dollars on “freeways” until it goes bankrupt on unpayable bonds.
Do you think the upcoming redistricting will help? Each time the state is redistricted, it ought to reflect the population patterns better.
Of course, there’s also gerrymandering to counteract that. :-P
The opening paragraph in the Gov’s statement says it all. “.., more than 90 percent of the proceeds from the last two revenue packages will cover just debt service on the 421 projects funded.” Oh, the state is broke?
And we’re digging billion dollar holes under Seattle, and floating bridges without a clue where the money is coming from.
I alluded to this a few days ago in a post, calling it the ‘Operating Revenue Abyss’, where all your funding starts getting eaten up by high cost services, debt and depreciation. Link operating cost through the 3rd Qtr of 2011 was 38.1 mil. Debt and depreciation was 45.2 mil. That ratio isn’t going to get better for decades, if ever.
This build anything NOW, no matter how big and expensive it is, and pay for it a long ways down the road would have even ‘New-Dealer’ FDR rolling over in his grave.
Actually, it wouldn’t have bothered FDR had it been done by the federal government, but that’s because FDR *had the power of the money-printing press*, a power exclusive to the federal government.
The state government doesn’t have the power to print money — if it did, all of this would be much less worrisome.
Maybe we can hope Tim Eyman does an initiative to eliminate the gas tax, and succeeds in convincing the electorate that taxing gas is like taxing water.
(I still can’t believe the state tried to tax bottled water. What were they thinking?)
They were thinking that it’s ludicrous to waste so much plastic and energy to bottle the same tap water you get out of your sink?
In other words, the tax was designed by city slickers who have never experienced the choice between digging wells and carting in water.
Did the tax apply to the kegs of water that people who have wells use or just the bottles? I don’t know anyone with well water that used the little bottles for regular drinking/cooking. We certainly don’t on our farm.
Not even in rural areas does everyone own a plot of land on which to sink a well. The homeless need access to water one way or another.
And…?
It’s even more important then that they be buying water by the jug or keg than individual bottles.
Did the tax apply to those things?
The tax would have applied to bottled water. Kyle is right, it was to reduce the amount of plastic in the environment. It wouldn’t have applied to water purchased in reusable containers. Many stores have a vending machine that you trade in or reused gallon jugs. You can also buy a filter if you’re worried about the quality of our tap water; which is bizarre since Seattle water is some of the best on the planet and most plastics leach nasty chemicals into the water.
How much of the state’s population is rural? Less than one-fifth. How did they get water before disposable plastic bottles were invented? If there is a rural-access problem to non-bottled water, why can’t the state help towns set up municipal water systems distributing reusable glass bottles, or the reusable jugs water-cooler companies use.
As far as the homeless argument goes: that’s just an argument in favor of a better social service network. Two wrongs don’t make a right.
“You can also buy a filter if you’re worried about the quality of our tap water; which is bizarre since Seattle water is some of the best on the planet and most plastics leach nasty chemicals into the water.”
Not bizarre at all. Seattle water tastes awful to me — it tastes like chlorine. Your mileage may vary, of course. Some people are, perhaps, more sensitive to that flavor than others are. I filter my tap water because otherwise I can’t bear to drink it.
I don’t think any of the filters remove chlorine. However, if you let a pitcher of water sit for a few hours it all evaporates away; a good idea for watering plants. I don’t think Seattle adds any more or less chlorine than what is federally mandated. Of course plumbing in your building can add a lot to the water. I’m also not looking forward to when Bellevue switches from Seattle water to Lake Tapps. We may reactivate our well when that happens.
littlnemo, Seattle probably doesn’t have an excess-chlorine removal step on its water purification system. I happen to live in a place with one of the best water systems in the country, so I learned about some of these little details.
You could campaign for a taxpayer-funded chlorine-removal stage to be added. :-)
Not even the Great Recession can stop Washington’s population growth. From April 2010 to July 2011 we were the 7th fastest growing State in the Nation, with the sixth largest population growth in raw numbers. We need to be doing everything we can to ensure that as much as this growth takes place in our urban core and not out in the mountains, forests, and farmlands that make this state such an awesome place to live. Having a comprehensive transit system in Seattle is a necessary step to accomplishing this goal.
Building more Highways is NOT what we need.
http://www.census.gov/newsroom/releases/archives/population/cb11-215.html
That’s because a bunch of people are fleeing California.
Which tried to build (and did build) all the roads it could.
And is so dependent on the automobile that the spikes in the price of gas impacted the “drive to qualify” crowd so much that they had to default on their (liar-loans)
And became a fiscally-unmanageable hellhole.
See a pattern here Washington State?
California had the second largest numeric increase in population; 4X that of Washington. There’s still more than one person moving in for every one that gets squeezed out.
Bernie:
Where is this population coming from?
What is their level of education?
I think the people moving to California are across the spectrum; from high tech professionals working at companies headquartered in the Bay area (like Apple and Google) to immigrant farm workers. Pretty much the same as Washington. One thing it’s not is a retirement home like Nevada and Florida.
They’re coming from everywhere. A higher percentage of immigrants entering America have degrees then Americans. There was recently a Seattle Times article about this. I will try to dig it up. From a personal experience this is true. A majority if my friends are foreign born almost all of them have some sort of degree. For my American friends like 2 of em have a defree.
Wes, the difference is that college is affordable in other countries, and completely prohibitively priced in the US. Therefore it is easier to get a degree in other countries.
Most Americans haven’t figured this out yet, hence a lack of American children learning foreign languages so they can go to college abroad.
More of the bankrupting social policy from Concrete Christine that the Copenhagenize blog calls “Ignoring the Bull (in the China Shop)”?
What a surprise. NOT.
Car use is down. Gas tax revenue will go further down as vehicles become more efficient or move to other fuels. (Notice all those Nissan Leafs on the road? How much tax per mile of asphalt worn down are they paying?)
And yet the ACG continues with its pave pave pave mentality as if it is 1950 again. Which it ain’t. And it never will be.
So, the state wants a specialty tax on electric vehicles to make up the difference. I’m okay with that *if* most of that tax is dedicated to building recharging stations and *not* to building more highways, for which battery-powered vehicles were not designed to travel on long distances.
The state is still in the process of making it feasible just to travel between Olympia and Bellingham via electric car. Most battery-powered cars that attempt to cross the Cascade divide won’t make it back without a tow.
I believe bio-diesel still faces a similar range problem.
But at least Bio-Diesel vehicles smell like French Fries!
The best user fee for paying for highways is tolls (if the state finds a way to keep bidding processes from undercutting the technology). The voters have now spoken: tolls can be used for traffic congestion pricing and for maintenance.
We now pay over 30% of the cost of the bus system in a user fee each time we board a Metro bus. I don’t see a toll designed to cover 30% of the maintenance and repair/replacement costs of a highway as being particularly outlandish.
To be fair, though, while gas taxes don’t cover anywhere near 100% of the cost of roads, I’m pretty sure they at least cover 30%.
Nevertheless, I like the idea of tolls in that they have the ability to charge more during more congested places at the most congested times – something you can’t do with a gas tax. I ride the bus across 520 to get to work each day and I’m looking forward to a faster ride once the tolling starts.
True—I recall that something like 80% of federal road costs are covered by the federal gas tax. Interestingly though, I suspect that most of the miles of road, and arguably the most important roads, are all local and therefore covered by property taxes.
Is that 80% of construction, maintenance, or both?
Yes, but congestion wastes a lot of gas when your engine is sitting idle in traffic. So in a sense, you do end up paying more gas tax, because you’re using more gas and not getting anywhere.
If it is “covering 80%” how come the Federal Highway Trust Fund is broke and needs annual bailouts?
I just did research on California’s gas tax and currently only 25% of the money used to maintain roads comes from gastax. I thought Wasington was somewhere in the 30% range but I haven’t checked it in a while.
“If it is “covering 80%” how come the Federal Highway Trust Fund is broke and needs annual bailouts?”
Because 80% ain’t 100%!
I randomly just came across a video about problems with foreign aid and maintenance of what aid organizations build. Their problems sound exactly like our transportation problems!
I appreciate your post Ben. I agree that the findings of the task force are troubling. How can we help our state come up with the right mix of transit and road investments? It seems WSDOT focuses on road congestion and does a poor job of moving people. In Vancouver, BC Canadians are constructing the Evergreen Line with a little over 1/3 of the funding coming from the province, 1/3 from the federal government, and less than 1/3 from TransLink, http://www.evergreenline.gov.bc.ca/faq.htm. Imagine how much more Sound Transit could accomplish if 1/3 of their funding camefrom the state! There’s a funding option for the Seattle Subway!
Based on the new Census data a whole lot of people should be thinking about…what happens when there is no more people. As in, everything that was put in place in the last years was premised on stratospheric growth. Didn’t happen. Isnt happening. Yet the Machine rolls on whistling in the dark.
So I guess you just my reply to your comment in the News Roundup open thread, or my POST ABOVE, showing that Washington has the 7th highest growth rate in the nation?
What about the severe backlog in transit implementation that has built up over the last five decades, where it didn’t keep pace with the existing population growth. We’re just catching up.
You make a good point overall, as global population *will* flatline after a while.
However, if you make your location the nicest, people will actually move from elsewhere. The Rust Belt is emptying out, and if Seattle remains pleasant (which means among other things… no giant freeway expansions) people and businesses will keep moving there, allowing local growth despite global population flatlining.
On the other hand, some cities in the Rust Belt are trying to make themselves attractive again and may actually succeed (Cincinnati might). So if you make Seattle UNpleasant, the flow can always go the other way.
This makes it important to build the right projects.
This problem is just as acute at the Federal level. That’s why spending billions on high speed rail instead of fixing bridges that are falling down made no sense.
HSR spending is a drop in the bucket. The Fed give out $50billion per year to State DOTs for highway expansion, far more than the federal gas tax brings in.
HSR is nothing. We’re spending more on a tunnel and a bridge in ONE city than the entire Federal Government spent on HSR in the last few years.
Same as above. If we’d built HSR when Europe and Japan did, we wouldn’t be having to pay billions now for it. Europe saw the gas price spike in the 1970s and decided not to be so dependent on cars and airplanes. The US didn’t, and it’s paying the price now, with no options from here to California or Chicago except a car, airplane, once-a-day Greyhound, or once-a-day slow Amtrak.
The distance London to Rome is the same as Seattle to Los Angeles. Guess what, the vast majority of Europeans fly when they want to make this trip.
But they have the option to take a high-speed train. And if the airlines stop flying sometime due to high fuel prices and carbon impacts, they can still take a train. While our slow train is already full and can’t absorb any increase. That leaves Greyhound or driving. If we can’t find money now to build a better train system (although that doesn’t seem to be a problem for highways and airports), it will be even harder if we have to do it in a rush when the airlines are going out of business.
Train from London to Rome is an option, but it takes more than one train:
http://www.seat61.com/Italy.htm#London to Bologna, Florence, Rome, Naples
Use this link. (why did they put spaces in their bookmark???)
There’s a reason nobody’s seriously proposed Seattle-LA high-speed rail in the near future; it’s too long and has too little traffic.
On the other hand, London-Paris, London-Brussels, Brussels-Paris, Paris-Berlin, Rome-Milan, St. Petersburg-Moscow, etc., are all now taken by high-speed train routinely. And HSR from LA to SF would take over its market; for Portland-Seattle, even lower-speed trains will take over the market quickly.
High-speed rail is *cheap* compared to expressways and airports, and it carries more people.
(Incidentally, there is no high-speed route from London to Rome yet, mainly because there is no suitable high-speed crossing of the Alps.)
aw, see if replacing the spaces with “%20” works.
That might work, but I know the anchor tag would work. I just didn’t notice the spaces in the URL when I posted.
SF is 4.3 million and LA is over 15 million. A rail route would be about 380 miles. That is a market that could definitely be well served by high speed rail. Even 120mph service would do the trick. But outside of the NE corridor there really isn’t the demographics for HSR like there is in Europe. Portland/Seattle (backwater hamlets on the world scene) should be competitive with air travel once WSDOT finishes planned improvements. Change some of the stupid regulations to run the Talgo trains at 100+ mph and turn it over to a private contractor to operate the service.
Ben, thanks for pointing out how useful construction of the Senator Haugen Legacy Memorial Stanwood Union Passenger Terminal Platform Project has been toward improving the state’s transportation network.
So what’s the ridership like from Stanwood. Do the fares collected cover the cost of stopping and bringing the train back up to speed?
ODOT has monthly reports through August posted:
http://www.oregon.gov/ODOT/RAIL/Passenger_Rail.shtml#Ridership
By-station on/off data is on the last page of each report. Stanwood is by far the worst-performing station in the entire network, with roughly half the monthly ridership of Oregon City.
Curious that ODOT has all that data readily available while WSDOT, which more or less drives the Cascades program, does not seem to.
C’mon everyone, Stanwood Vokzal is aimed at an extension of Sounder Service. And it allows access to Camano Island.
Yeah, more highways! Because what’s causing our collective modern weight problem has nothing to do with how little you need to move your body to get somewhere around here. Cars cars cars! War on people that add physical activity to their daily routine!
The Washington State Growth Management Act requires local governments to focus growth in specific areas order to protect our farms and forest from being destroyed. If we want our local governments to be able to follow through on this commitment then we must give them the tools they need in order to make sure growth is compact instead of sprawling. Our local governments can’t help the state protect our natural places if we’re spending massive amounts to pave them over; and they can’t focus growth if we don’t fund mass transit.