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Give Narrows tollpayers a break on project’s sales tax

Post by TNT Editorial Board / The News Tribune on March 8, 2012 at 5:45 pm |
March 9, 2012 8:54 am

UPDATE: The Legislature passed SSB6073 Thursday night. It now goes to the governor for her signature.

This editorial will appear in Friday’s print edition.

Narrows Bridge commuters are footing the bill for building the second span and retrofitting the original one. But if state Sen. Derek Kilmer, D-Gig Harbor, has any say in it, they won’t also pay state sales tax on the project anytime soon.

Kilmer’s Substitute Senate Bill 6073, which passed the Senate on Monday, is now in the House and of this writing is still technically alive. It would further delay payment of the sales taxes involved with the bridge project. The first payment on those taxes – about $5.75 million a year over 10 years – comes due this year. With SSB 6073, Kilmer hopes to push that out another six years – at least.

The best-case scenario is for the state to forgive the tax bill entirely, but that’s unlikely. According to the state Department of Revenue, the federal government might then seek to get a similar exemption for the sales taxes paid on any of its projects in the state. But even a delay of six years would benefit tollpayers because payment would kick in after the debt service bill has flattened out.

Delaying the tax bill means the current toll – $2.75 for those using Good to Go transponders, $4 for those who stop at toll booths and $5.50 for everyone else – won’t have to rise as much as it otherwise would, perhaps mitigating the increase by about 20 percent.

Unfortunately, there’s no way to avoid a toll increase, because the debt payment costs on the bridge are outpacing revenue. In the economic downturn, fewer people are driving across the bridge for work – either because they don’t have a job to go to or because they’re taking the bus. Drivers are making fewer optional crossings, and the openings of a hospital and new stores mean fewer people have to cross the bridge for health care and shopping. So a heavier burden falls on those who have no choice but to pay the toll.

Kilmer’s bill is one that Seattle-area lawmakers also should support, if only out of fairness: Their constituents won’t be asked to shoulder as much of the burden of big transportation projects.

For instance, now that the state Department of Transportation has determined that tolls will fall about $200 million short in paying for the new state Route 99 tunnel, the shortfall will be made up from leftover state gas tax money, not by boosting the toll.  Narrows commuters could justifiably wonder why some of that money couldn’t go toward paying down the bridge sales tax.

As a matter of geographical reality, tolls must be kept low on the SR 99 tunnel and the state Route 520 bridge: Drivers there have alternatives, even if it is to crowd onto surface streets or the Interstate 90 bridge. No such option exists for Narrows commuters: Driving the long way around through Olympia costs about as much in gas –  and a lot more in time – than taking the bridge.

The state’s contribution to the Narrows Bridge project was only $49 million. Yet tollpayers are on the hook for about $58 million in sales tax. If the Legislature fails to delay the sales tax bill for six years, next year it should at least agree to spread that bill out over a longer period – say, 20 years instead of 10. It’s only fair.

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