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Transportation Commission recommends raising tolls

Post by John Henrikson / The News Tribune on Jan. 21, 2010 at 1:42 pm with 12 Comments »
January 21, 2010 2:30 pm

From Maks Goldenshteyn in our Olympia bureau:

Toll rates on the Tacoma Narrows Bridge would be upped to $3.25 for drivers with transponders and $5 for drivers who pay cash under a recommendation made Thursday by the Washington State Transportation Commission.

The commission passed the recommendation by a vote of 4-3.

The proposed rate hikes fell in line with the wishes of State Treasurer James McIntire, who wants toll rates to eventually generate revenue equaling 110 percent of the bridge’s debt costs as a way to guard against events that might impact traffic volumes, and thus toll revenue.

The Citizens Advisory Committee has 20 days to respond to the Transportation Commission’s findings and to hold public hearings. The commission will release its official toll proposal for public review this spring, with public meetings to follow. Whatever changes are made won’t take effect until July 1.

“This is not a final decision,” said Commission chair Carol Moser Thursday.

McIntire has softened his stance a tad after his Jan. 8 op-ed in the The News Tribune upset some folks on the Gig Harbor side of the bridge who are concerned about cost increases. He’s now recommending a coverage ratio of 105 percent for 2011 and 110 percent the year after.

Current toll rates cover only 101 percent of the debt, and that figure would fall to 69 percent if toll fees were to go unchanged.

But the commission’s proposed fee increase for transponder users are still higher than the $2.75 the citizens committee thinks Good to Go! users should pay. Both the Commission and the citizens board agree on the $5 cost for cash payers.

Leave a comment Comments → 12
  1. derekyoung says:

    It’s important to note there is no legal or financial obligation to do this. None. The bonds are sold and have no requirement for a minimum debt coverage ratio.

    The ONLY people this conceivably benefits are future toll-payers in King County through potentially reduced interest rates. The theory being that better debt coverage ratios in prior toll financed bonds will demonstrate greater creditworthiness to bond investors. We’ve already made large contributions to King County megaprojects through the Transportation budget. Conversely, the state made no such down payment on the Narrows bridge.

    Basically it’s like a bank turning your 30 year note into a 20 year note without your permission so your neighbor can get a better interest rate on their mortgage.

  2. Pat_riot says:

    What’s so hard about coming up with a predetermined scale (as they did) for toll rates and increases, and then keeping that scale until the bridge is paid for and the toll is disbanded. Did they get a variable interest rate on the loan for the bridge, and need to raise tolls to pay for that exponential increase in interest? No. So what’s so hard about keeping with the plan people? Greedy politicians and they’re lust for our money… some things never change.

  3. killemallletgodsortemout says:

    this is the problem with tolls – like taxes, they always go up, never down, and are permanent.

  4. Another reason not to got to Gig Harbor

  5. Along with Senator Derek Kilmer and Representative Jan Angel, I will continue to oppose this recommendation. I believe that the recommendations of our CAC and the CAC’s excellent track record show that our current process for setting bond payment reserves are fully adequate.

    I will continue to press the Transportation Commission to host an immediate series of community information meetings so that everyone can get a chance to hear the Treasurer’s and the Transportation Commission’s ideas before our CAC meets to decide how they will respond to today’s decision by the Commission.

    Your thoughts welcome here and directly to seaquist.larry@leg.wa.gov.
    Thank you,

  6. randyboss says:

    Can any none of you please explain why the people in Gig Harbor are paying $4.00 currently for a $700,000 ,000 Toll Bridge across the Narrows and the the people in Seattle will be paying a $4.00 toll for a deep-bore tunnel that will cost $3 BILLION and/or the SR 520 which will cost $4 BILLION? Where’s the equity required under the law?

    ESSHB 1773 New Section 2
    (2) When to use tolling. Tolling should be used when it can be

    24 demonstrated to contribute a significant portion of the cost of a

    25 project that cannot be funded solely with existing sources or optimize

    26 the performance of the transportation system. Such tolling should, in

    27 all cases, be fairly and equitably applied in the context of the

    28 statewide transportation system and not have significant adverse

    29 impacts through the diversion of traffic to other routes that cannot

    30 otherwise be reasonably mitigated. Such tolling should also consider

    31 relevant social equity, environmental, and economic issues, and should

    32 be directed at making progress toward the state’s greenhouse gas

    33 reduction goals.

    WHERE IS THE 50% CONTRIBUTION TO THE TACOMA NARROWS BRIDGE PROJECT? Why are we forced to contribute our tax dollars to these mega projects in Seattle to buy down their toll obligations when we are not being treated equally? By my calculations the cost of the Tacoma Narrows Bridge project was just over $700 MILLION (Not BILLION). That means the state will need to contribute about $350 MILLION to the Tacoma Narrows Toll Account in order to comply with the law that requires the state to insure that “…tolling should, in all cases, be fairly and equitably applied in the context of the statewide transportation system.” and to insure that “…tolling should also consider relevant social equity, environmental and economic issue…” like a fairly applied toll policy that charges everyone equally based on the cost of the project.

    Parity and equality in these cases was originally established by charging the users of the first toll project (of the modern age)100% of the construction cost of the facility to be repaid by the collection of tolls over a 25 year payback period. Using that formula the 520 and the Tunnel should also pay 100% of the cost of their project through tolls. But the state (in both cases) has created a new paradigm by contributing 50% of the construction cost to buy down the tolls and thereby has created a new “equality” and “parity”.

    When will the users of the Tacoma Narrows Bridge be treated equally with the users of the 520 and the tunnel?

    Randy Boss (253) 279-8877

  7. randyboss says:

    My comments to the Transportation Commission were as follows:
    were as follows:
    (1) A couple (going to work everyday) using transponders who receive a $0.50 toll increase will pay (together) an extra $1.00 per day, 5 days a week or $240 a year while a casual user who decides that they don’t need a transponder because of the infrequent use of the facility, traveling onto the Peninsula once a month would incur a $1.00 per month increase or a $12.00 annual increase. The Commission seems to think the CAC toll recommendation is “UNFAIR” to the casual user but if they (the cash payer) believe they are being unfairly treated then they can (and should) go get a transponder. In fact, the toll booth will soon be eliminated on the Narrows and this could be a help in making the transition from toll booth cash payments to electronic transactions.This example should explain to the Commission the inequity of even a small increase in the transponder rate.
    (2) Artificially setting a standard called “debt coverage ratio” only addresses the bond debt and not the maintenance and operation of the facility which is also a responsibility of the toll payers. The Citizen Advisory Committee has annually reviewed ALL costs associated with the overall operation of the facility and have established a reserve fund to address any unforeseen happenings in an amount to cover all cost – NOT JUST DEBT SERVICE. That “standard” is not standard at all and is, on its face, illegal!
    Please read the law – read RCW 47.46 and RCW 47.56 – follow the law – let the legal toll setting process work as it was originally designed. It’s not broken and needs no fix………


  8. johnearl says:

    The State Treasurer does not appear to grasp the financing structure of the TNB project. For good or ill, each day we cross the bridge we are required to contribute to the fund used to pay off the bridge debt. On days when we don’t cross the bridge, we are not obligated to pay the debt. Most of us who cross the bridge daily don’t like the way the financing was structured, but those are the rules of the game and we play by them.

    Now the Treasurer has proposed to change the rules of the game – he wants to charge today’s users for tomorrow’s payments. That way if daily use of the bridge declines, the State will have a large reserve fund to pay off the debt. But the only way he can get this large reserve fund is to over-charge bridge users – essentially to charge today’s users for tomorrow’s payments. That’s not right, and it’s not inline with the original plan (as crappy as that was).

    I think the Treasurer also forgets that the TNB is a cash cow. Every day it generates cold hard cash, and should there be a sudden drop in revenue the commission can raise tolls as needed to cover debt obligations. Will it be painful on (then current) users? You bet, but that is the way the State set up the game, and if the State wants to change the rules, rest assured there are numerous other points of contention that bridge users would like to re-negotiate as well.

  9. Raise it to $20.00 each way. I would love that. Do it now while the economy is “coming back”.

  10. You voted for it. This should surprise no one. It’ll be $10 by 2015.

  11. teammojjo says:

    Can’t be surprised at this. Didn’t we vote in to have a vote anytime a new tax is instituted? Now we just get them shoved down our throat at will. Seattle voted down a tunnel numerous times, then had it shoved down their throat. Same goes for the Safe. If the great moron collective wouldn’t have let the alien governor in office after she lost 2 out of 3 times, we may not be in this mess. Raise tolls to cover what? More pot hole repair in Seattle? This state is the laughing stock of the country when it comes to fraud, waste, and abuse of collected taxes. Anyone remember the claim that Lotto money was going to go to education? What does education see? Pretty much nothing percentage wise based on Lotto intake. Now we get the powerball coming in. Where will that money go? My best guess is more wasted projects. Maybe they can earmark money for focus groups to determine if we are tired of hearing about focus groups.

  12. Good insights. People need to make sure they dont get ripped off by different debt settlement and negotiation companies. I found http://howigotmyselfoutofdebt.org they cover different companies and methods. Knowledge is power. I like that site because they don’t try to sell or promote anything.

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