520 Mega-Snag: This Far Along, And Still No Money To Finish It
Construction of the new state Route 520 bridge is about halfway along now. But just as our tunnel mega-project has a major complication, SR 520 has its own mega-snag: we lack the minimum $1.6 billion to complete it.
The state’s highway department is also not clear on the final design of the "Rest of the West," as this embattled section of the 520 bridge is called.
And the lack of a solid funding source for the final chunk of a mega-project is still a major stumbling block.
Jim McIntire, Washington’s treasurer, said the decision to cross the funding bridge when we come to it represents "the new normal" for the state.
“We have a number of large projects that we have to step up to,” he said.
The list includes three mega-projects: SR 520, the Alaskan Way tunnel and the partially-complete Sound Transit Light Rail system.
Our state has been on a transportation spending binge, particularly since the recession. A lot of that money has come from borrowing.
The state borrowed against tolls it believes it can collect from the 520 bridge, even though many cars switched to crossing Lake Washington on Interstate 90 when 520 tolling began.
The state borrowed against federal transportation money it believes it will receive, though federal payments have been in decline for years now.
And the state has borrowed against revenue expected from the state’s gas tax. That too is falling, because even gas-drinking cars are more fuel-efficient than they used to be.
Now the treasurer says there’s not a lot more borrowing the state can safely do. In a letter to legislators last December, he warned about the state’s habit of borrowing against gas tax revenues. McIntire said if legislators borrow against increasing portions of future gas tax revenues – say, 80 percent as opposed to 50 percent – it could hurt the state’s capacity to borrow in the future.
In the letter he urges legislators to find a new funding source. Among his suggestions is a toll on the I-90 bridge to pay for the lion’s share of 520’s Rest of the West. But that has little traction in Olympia, in part because many residents of Mercer Island object to the idea of tolling I-90 to pay for a nearby bridge.
There are proposals on the table, but the way is not yet clear. The governor, Jay Inslee, has his own transportation funding proposal that promises to pay for the entire 520 project.
Recently a group of state Senate Republicans proposed a transportation funding package that included 520 and would raise the gas tax. The Treasurer's preliminary analysis of the Senate proposal is that it would over-leverage state revenues.
“Financially, this is an irresponsible disaster,” said Fran Conley, whose home is close to the current 520 bridge.
“It is irresponsible of our state legislators to use up all of the state's credit before we know what the true cost of 520 going to be because we have precise plans for it. This is a deliberate refusal to look at reality.”
Conley doesn’t like 520 as it currently is. She opposes a wider version of a 520 because she believes it will further damage quality of life for residents and wildlife. But she’s also a retired corporate turnaround expert who said, “A business would never ever embark upon a project like this without knowing where the money was going to come from.”
But the treasurer McIntire said we’re in a state that realized that we couldn’t wait any longer to address our transportation needs and that the risk of earthquake was real. And that, he said, is the problem with not completing 520.
If it doesn't get connected all the way to Interstate 5, then the old part "will still be vulnerable to earthquake or some sort of catastrophe."
It could break up in earthquake. We’d lose a valued connection to the east side. And then, he said, we would have to pay the bonds we placed on tolling it, when it couldn't be tolled.
