Startling facts in DOT's 2003-05 budget
No funds available to manage "largest infrastructure project in the nation"

In its 2003-05 budget released August 14, the Washington State Department of Transportation (DOT) identifies some startling problems with the state's transportation funding.

• DOT does not have the funds to manage and complete current projects
"Available resources . . . do not even provide adequate funding to sustain the current levels of services for all transportation system maintenance and preservation." (p. 3) "Fifty projects deferred in 2001-03 are not programmed under this budget, and are on hold indefinitely." (p. 23)

• DOT does not have the funds to maintain highways
"This low level of investment [2003-05 DOT budget] will result in a backlog of paving, bridge preservation, and other facilities preservation needs that will cost substantially more to preserve or rebuild in future biennia." (p. 23)

• DOT will make mass transit a priority
DOT will continue to focus on mass transit, despite the shortfalls in road management funds. "...Public transportation will continue its efforts to develop and implement strategies and initiatives that encourage alternatives to the single occupant vehicle and that support public transportation programs." (p. 12)

• DOT will make public relations a priority
Again, despite limited resources, DOT will be reducing ". . . funding for planning, business, administrative, and management support activities while augmenting the resources that are necessary to better inform the public about the state's expectations and achievements in delivering transportation systems." (p. 6)

Will R-51 solve these problems?
DOT analyzed expenditures based on two scenarios: with Referendum 51 and without it. As the facts show, R-51 (the proposed $7.7 billion transportation spending package) will have some dubious consequences for the transportation budget.

• DOT does not have the funds to operate and maintain R-51 projects
R-51 will allow DOT to undertake "potentially the largest infrastructure-building program in the nation. However, the department notes that "the referendum does not provide additional funding for any other operating services or activities, so the department will be challenged to meet its other program objectives with increasingly constrained financial resources." (p. 2)

• R-51 projects will cost $500 million more than expected revenue
This shortage is reconciled as "Debt service, revenue and cash flow uncertainty." An additional 1.5-cent gas tax increase would be needed to cover this deficit. (p. 84)

• 35 cents of every gas tax dollar in 2003 will go to interest payments on bonds
Currently, DOT spends 31 cents of every gas tax dollar on interest for past bond payments. That will rise to 35 cents next year. As recently as August 1996 it was 24 cents. This does not take into account the $8.46 billion debt service taxpayers will owe during the next 25 years for R-51's $4.6 billion bonds. In ten years, the outstanding bond balance will be $4.1 billion. (p. 78)

R-51 is a tax increase proposal. If approved, it is clear that immediate additional tax increases will be required to enable DOT to manage the projects included in the referendum. DOT has also stated on its website that the total cost to complete the projects will be $35-38 billion. R-51 provides $7.7 billion through a 9-cent gas tax increase and 25 year bonds. The source of the additional $28-31 billion necessary has yet to be identified. Unfortunately, the referendum will do little, if anything, to reduce congestion over the next ten years.

The state has many options to consider when it comes to funding transportation and reducing congestion. Congestion relief is needed now, not in ten or twenty years.

Prepared by Jason Mercier, Budget Research Analyst, (360) 956-3482 or jmercier@effwa.org

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org