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Narrows Bridge fare hikes are simply inevitable
As discussions and questions grow around 2009 toll-setting for the Tacoma Narrows Bridge (TNB), it is apparent there is a need for better information on how the tolls are set and the state of Washington’s obligations to pay for the TNB.
It cost $737 million to build the bridge. It cost another $400 million to reconfigure and improve the approaches and make necessary State Route 16 corridor improvements on both sides of the bridge to ensure efficient traffic flows between Gig Harbor and Interstate 5.
It should be noted that the $400 million investment is not being paid for with toll revenue but rather, is funded with gas taxes collected statewide. The state Legislature determined that only the bridge would be paid for through tolls.
Washington state issued bonds to obtain the funds necessary to pay for the construction of the new bridge. That is typical of most major construction projects in the United States.
The state is legally required to pay the bondholders on a timely basis.
The payment schedule is a matter of public information and has been well-publicized (and is posted on the WSDOT Web site at www.wsdot.wa.gov).
Current state law requires that toll revenues pay the principle and interest on the bonds, and pay for the maintenance and operation of the bridge. In order for that to occur, tolls must be set at levels to ensure enough revenue is generated to cover those costs.
The payment schedule could have been set up like a fixed-rate home mortgage, whereby the same amount is paid by the homeowner every month over 15 to 30 years.
In the case of the TNB, the Legislature desired to lessen the immediate impact on the tollpayers. To accomplish that, the State Treasurer set up a debt repayment schedule that started out low early on, and then rises gradually over time.
For that reason, initial tolls could be and were set at a relatively low level the first year, i.e.: $1.75 for transponder users and $3 for cash payers.
But the payments will keep going up, which means tolls must do the same.
Here are some examples of the required debt payments for the TNB:
• for the 2007-09 state budget period (which ends on June 30, 2009), the state will pay a total of $41 million in debt payments;
• in the 2009-11 budget period (starts on July 1, 2009), the state will pay nearly $80 million in debt payments;
• looking ahead to the 2015-17 budget period, the state payments will rise to $133 million; and,
• they keep increasing until they max out at $174 million in 2029.
However, as expensive as the tolls appear today, it is instructive to note that the tolls on the original Tacoma Narrows Bridge exceeded $17, when inflated to today’s dollars.
Even the highest tolls over the entire period of the debt schedule for this bridge will not approach that number.
The biggest unknown factor in toll-setting is the amount of traffic that will cross the bridge.
Traffic volumes dictate how much toll revenue is collected and thus are also a big determinant of what toll rates need to be to ensure we collect enough revenue to cover costs.
Because predicting traffic is like predicting the weather, to suggest what future toll rates will be beyond one year, is no more than an educated guess.
But one thing seems certain – tolls will continue to go up, and this fact is not because the state is looking to make a profit or use the TNB toll revenue for other uses - neither of which can legally be done.
It is simply to meet the state’s fiscal and legal obligations that are simply unavoidable.
Dan O’Neal is chairman of
the Washington State