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The flaw in state treasurer’s advice on bridge tolls

Post by Kim Bradford on Feb. 9, 2010 at 1:55 pm with No Comments »
February 11, 2010 4:47 pm

Tacoma Narrows commuters will get their chance tonight to comment on the state Transportation Commission’s proposed bridge toll hikes.

Tolls were bound to go up by some amount this year, but the commission’s proposed rates have been especially controversial owing to the state treasurer’s involvement. Treasurer Jim McIntire is looking at having to sell bonds on the Highway 520 bridge in a few short years, and he says driving a good bargain will depend in part on the fiscal health of the Narrows toll account.

He has asked the Transportation Commission to set toll rates that generate enough revenue to cover 110 percent of the bridge’s debt costs. That advice helped persuade the commission to recommend higher tolls than the community advisory committee had favored.

Narrows bridge users are predictably miffed about being asked to pay more to assist a project benefiting Seattle-area commuters, who will only end up paying a fraction of their bridge’s costs. But there is something more troubling here, something we didn’t quite understand the last time we wrote about the proposed tolls. We might have objected even more strenuously if we had.

The formula for figuring McIntire’s 110 percent target doesn’t consider how much money is already in the toll account. A 10 percent cushion this year essentially becomes a 21 percent cushion next year, a 33 percent cushion the following year and so on and so on. Soon, toll payers are paying higher tolls to feed the savings account rather than pay off the bridge debt.

In the case of the Narrows account, the growth of the reserve is checked – at least in the short term – by a repayment of deferred sales tax on bridge construction and a state loan for bridge startup costs. But Sen. Derek Kilmer, D-Gig Harbor, is trying to get both forgiven. If he was to succeed, following McIntire’s advice wcould result in compounding reserves – and unnecessary expense for Narrows commuters.

UPDATE: The state treasurer’s office strongly disputes that conclusion and called the state Department of Transportation. Lloyd Brown and Jeff Caldwell from WSDOT confirmed that existing fund balances are not considered in calculating the 110 percent target. But they added that the bridge’s ongoing maintenance and preservation costs also help check the growth of reserves. Caldwell has not run an analysis of what effect they alone would have on reserves over the long term.

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