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Originally published October 1, 2011 at 8:02 PM | Page modified October 1, 2011 at 9:46 PM

Eyman challenges state's route on tolls

Tim Eyman and state officials agree on one thing: His tolling initiative on the November ballot would upend state plans for reducing traffic congestion and financing costly highway construction.

Seattle Times Olympia bureau

Initiative 1125

Tim Eyman's Initiative 1125 would:

×Require the Legislature to approve tolls instead of the state Transportation Commission, which is appointed by the governor.

×Require any tolls lawmakers approve to be at a flat rate, and prohibit variable rates that increase during peak-hour traffic.

×Mandate that tolls only go toward work on the road being tolled. State law already requires that.

×Require that tolls expire once the debt for the project is paid off.

×Prevent light rail from running across the Interstate 90 bridge. It does so with a provision that says the state "may not transfer or use gas-tax funded ... lanes on state highways for non-highway purposes."

Tolling projects

The state plans to use tolls to help finance a few current projects and is considering tolls for other potential work.

Highway 520 bridge: The state plans to start tolling the existing 520 bridge this year to cover $820 million of the $4.65 billion project. Tolls also are being considered for the Interstate 90 floating bridge to help pay for the 520 project.

Alaskan Way Viaduct replacement: The state has approved using tolls to cover $400 million of the $3.1 billion project, which includes a waterfront tunnel.

I-5 Columbia River bridge (pictured): The state proposes using tolls to help pay for the $3.1 billion to $3.5 billion project between Washington and Oregon.

I-5 express lanes: The state is considering using variable tolls on the North Seattle express lanes to cut commute times and raise money to cover road repairs or expansion.

I-405 carpool lanes: The Legislature authorized express toll lanes from Bellevue to Lynnwood, but needs to fund tolling equipment. Studies are under way on the feasibility of converting carpool lanes into HOT lanes and ultimately constructing a toll corridor to Puyallup.

Total gas-tax collections (click on image for full PDF)

Gas-tax money graphic (click on image for full PDF)

quotes Let's have the public decide, shall we? Read more
quotes So let me get this straight. He doesn't trust the lawmakers but he wants to put them in... Read more
quotes This should not be a Republican or Democrat issue but its turning out that way. ... Read more

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OLYMPIA — Tim Eyman and state officials agree on one thing: His tolling initiative on the November ballot would upend state plans for reducing traffic congestion and financing costly highway construction, including the Highway 520 floating-bridge project.

Eyman says Initiative 1125 would make lawmakers more accountable for raising and spending billions of dollars in tolls, and would make tolling fairer by banning variable-rate tolls that he says hit the state's poorest residents the hardest.

But it also would undermine long-term efforts, state transportation officials say, to find an alternative to gas taxes to help finance highway construction. And it would make Washington the only state that requires legislators to set toll rates, in turn raising financing costs, according to analysts.

"We have a big backlog of transportation projects we need to get done. The gas tax is tapped out. Tolling is critical," said Steve Mullin, president of the Washington Roundtable, an association of corporate executives. I-1125 "takes a major tool away from the state in terms of building large transportation projects."

State officials are increasingly turning to tolls to help finance major transportation projects as gas-tax collections plateau due to more fuel-efficient cars and less driving. The initiative would make it more difficult — and opponents say far more expensive — to turn those tolls into a multibillion-dollar source of highway funding.

In addition to the Highway 520 work, I-1125 could jeopardize toll funding for other projects, including a new Interstate 5 bridge over the Columbia River, according to the state Treasurer's office. Congestion-relief plans to open more carpool lanes to solo drivers who pay variable-rate tolls would be scuttled.

I-1125 would dismantle the state's tolling proposals with a series of seemingly simple moves.

Among other provisions, it would require the Legislature to approve tolls instead of the state Transportation Commission; ban variable-rate tolls, which charge more during peak driving times, and mandate that tolls only go toward work on the road being tolled.

"What it boils down to is just not trusting them," Eyman said of state lawmakers. "I've never seen them be overly trustworthy when it comes to money."

I-1125 is backed by Bellevue developer Kemper Freeman, who has contributed more than $1 million to the campaign. Freeman says he worries that the state will start using tolls to pay for more than transportation projects, but he's also fought plans to run light rail over the Interstate 90 bridge. Eyman's initiative contains a provision that would block that light-rail route.

The state Republican Party also supports the measure.

It's opposed by a coalition of labor, business and civic organizations, including the Association of Washington Business, the Washington Roundtable and the League of Women Voters. The state Democratic Party also is against it.

State Attorney General Rob McKenna, the Republican candidate for governor in 2012, has to defend initiatives and can't comment about the issue, a spokesman said. Democratic U.S. Rep. Jay Inslee, who's also running for governor, opposes it, saying it "will damage our ability to grow our economy and create jobs."

A recent Elway Research poll shows the measure gaining ground, with 56 percent of voters surveyed supporting it, up from 49 percent a month ago.

Lawmakers decide

One of the biggest objections state officials have to I-1125 is the mandate that lawmakers set tolls instead of the state Transportation Commission. The commission has seven members appointed by the governor, and sets toll rates.

Eyman argues the current system allows the Legislature to duck responsibility.

"Because (commission members) are not elected, they're not accountable to the people. Because they're not accountable, there's no reason for them to be influenced in any way by what the citizens think. When you're talking about billions of dollars being taken from the taxpayers ... you need the accountability," he said.

I-1125 opponents say having lawmakers set tolls would politicize the process and make it difficult, if not impossible, to sell bonds backed solely by tolls. That's because investors would run the risk of political gridlock and lawmakers being unable to increase tolls if needed.

State Treasurer Jim McIntire, a Democrat, had a Los Angeles consulting firm, Public Resources Advisory Group, look into the matter. The firm concluded that requiring the Legislature to set tolls "would be unprecedented nationally" and "result in increased interest costs" to the state, as investors would demand more of a return to take on higher risk.

"We don't think that we could sell the bonds if the Legislature was in charge," McIntire said. "We think it would be prohibitively expensive."

The advisory group estimated an 18 percent rise in interest costs if lawmakers were required to set tolls.

Research by the National Conference of State Legislatures confirms that no state Legislature sets tolls directly. In seven states, including Washington, the Legislature must authorize using tolls to help pay for projects.

Ed Regan, a senior vice president at the transportation-consulting firm Wilbur Smith Associates, agreed that having the Legislature set tolls could create a problem. "Bondholders would be much less willing to take the risk and invest in the project," said Regan, whose South Carolina-based company has done consulting work for Washington.

"Triple-backed bonds"

Eyman maintains the state could always issue "triple-backed" bonds, where payments are backed first by tolls, then by the state gas tax, and then by the state general fund.

Bonds secured in that fashion typically get better interest rates than ones paid for only by tolls.

The state treasurer's office said it's not that simple.

While the state has some capacity to issue those bonds, it's not unlimited. There's no way the state could issue the billions of dollars in triple-backed bonds that would be needed to complete megaprojects across the state, McIntire said.

Why?

The state gas tax is already largely tapped out.

Most of the state's share of the 37.5-cent gas tax is committed to pay off billions of dollars in debt for projects completed or under way.

The remaining 8 cents to the state goes to operating costs, highway preservation and the state ferry system — and falls short of those needs as it is, according the state Department of Transportation.

Also, political leaders say it's unlikely voters would agree to increase gas taxes statewide to pay for projects that primarily benefit one region. The Legislature is in no position to increase taxes on its own because state law requires a two-thirds vote in the state House and Senate — a near impossibility.

And no one wants to tap the state general fund to pay for roads. The Legislature has already slashed state spending in recent years, and more cuts are coming.

Variable tolls

I-1125's ban on variable-rate tolls also creates a headache for transportation planners.

The state wants the ability to charge drivers less when there's little highway congestion and more during peak commute times, both to manage traffic and to raise more money.

Eyman characterizes the policy as discrimination. The rich, he says, can drive when they want while the poor get stuck with either driving in the off hours, or making longer trips to avoid the tolls.

Variable tolls bring in more money than flat tolls because they limit diversion during off hours when prices are low, said Mark Hallenbeck, director of the Washington State Transportation Center. If the toll never changes, a lot of those drivers will simply take an alternate route, he said.

Hallenbeck said variable-rate tolls work best in places where drivers have alternate routes. They are planned for the 520 bridge and the Highway 99 tunnel. Flat-rate tolls make more sense where there are not good alternative routes, Hallenbeck said.

State officials say the initiative would eliminate using "high-occupancy or toll" (HOT) lanes because they depend on variable-rate tolls to ease traffic flow. Variable rates help manage congestion by allowing solo drivers to pay to use the HOT lane, freeing up room in other lanes.

Eyman said mandating that tolls only go toward work on the road being tolled is aimed at preventing the state from turning them into a tax that can be used for anything.

State law already requires that tolls be used on the roads being tolled, but Eyman said it can't hurt to say it again. State officials have discussed tolling the I-90 bridge and using the money to help pay for replacing the 520 bridge.

If the state takes that step, Eyman argues, lawmakers could be tempted to use tolls for mass transit and other purposes. Or the Legislature could raid tolling accounts to pay unrelated bills.

State officials, though, say toll money would be used to pay off bonds. And any money dedicated to paying off debt is protected by the state constitution, which means the Legislature could not divert it for other purposes.

Andrew Garber: 360-236-8266 or agarber@seattletimes.com

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